Federal Agencies: U.S. Department of Treasury and Department of Transportation Federal Program Titles: COVID-19 Coronavirus State and Local Fiscal Recovery Funds and Highway Planning and Construction Cluster Assistance Listing Numbers: 21.027 and 20.205 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agencies: Indiana Finance Authority and Indiana Department of Transportation Pass-Through Numbers: 21.027: Unknown, 20.205: Des. 1593056, Des. 1400296, Des. 1900448, Des. 1702832, Des. 1400638, Des. 1400639, Des. 2100024, and Des. 2101602 Type of Finding: • Significant Deficiency Criteria or Specific Requirement – Procurement, Suspension, and Debarment: Pursuant to 31 CFR § 19.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended and debarred or whose principals are suspended or debarred. The non-Federal entity must verify that the contracted entity is not suspended or debarred or otherwise excluded. In addition, pursuant to 2 CFR § 200.303, which states in part, the non-Federal entity must establish and maintain an effective internal control over the Federal awards 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. Condition: The County could not provide support that it had reviewed the “List of Parties Excluded from Federal Procurement and Nonprocurement Programs” during their procurement procedures on a consistent basis. The County had not properly designed or implemented a system of internal controls, that would likely be effective in preventing, detecting and correcting, noncompliance. Questioned Costs: None Context: It was noted that for ALN 21.027, three files selected for testing from a population of twenty-six files, and for ALN 20.205, one file selected for testing from a population of six, did not have documented evidence supporting that the County had determined that the contracted parties were not suspended or debarred. Our sample was not intended to be statistically valid. Effect: The County was unable to support vendors were not suspended or debarred. Cause: Failure to maintain sufficient procurement records. Identification as a Repeat Finding: Yes, 2022-002 Recommendation: We recommend that the County maintain adequate documentation to ensure compliance with the suspension and debarment requirement. This documentation could include a print out from the Excluded Parties List System maintained by the General Services Administration, collection of a certification from the contracted party, or adding a clause or condition to the covered transaction with the contracted party. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agencies: U.S. Department of Treasury and Department of Transportation Federal Program Titles: COVID-19 Coronavirus State and Local Fiscal Recovery Funds and Highway Planning and Construction Cluster Assistance Listing Numbers: 21.027 and 20.205 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agencies: Indiana Finance Authority and Indiana Department of Transportation Pass-Through Numbers: 21.027: Unknown, 20.205: Des. 1593056, Des. 1400296, Des. 1900448, Des. 1702832, Des. 1400638, Des. 1400639, Des. 2100024, and Des. 2101602 Type of Finding: • Significant Deficiency Criteria or Specific Requirement – Procurement, Suspension, and Debarment: Pursuant to 31 CFR § 19.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended and debarred or whose principals are suspended or debarred. The non-Federal entity must verify that the contracted entity is not suspended or debarred or otherwise excluded. In addition, pursuant to 2 CFR § 200.303, which states in part, the non-Federal entity must establish and maintain an effective internal control over the Federal awards 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. Condition: The County could not provide support that it had reviewed the “List of Parties Excluded from Federal Procurement and Nonprocurement Programs” during their procurement procedures on a consistent basis. The County had not properly designed or implemented a system of internal controls, that would likely be effective in preventing, detecting and correcting, noncompliance. Questioned Costs: None Context: It was noted that for ALN 21.027, three files selected for testing from a population of twenty-six files, and for ALN 20.205, one file selected for testing from a population of six, did not have documented evidence supporting that the County had determined that the contracted parties were not suspended or debarred. Our sample was not intended to be statistically valid. Effect: The County was unable to support vendors were not suspended or debarred. Cause: Failure to maintain sufficient procurement records. Identification as a Repeat Finding: Yes, 2022-002 Recommendation: We recommend that the County maintain adequate documentation to ensure compliance with the suspension and debarment requirement. This documentation could include a print out from the Excluded Parties List System maintained by the General Services Administration, collection of a certification from the contracted party, or adding a clause or condition to the covered transaction with the contracted party. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agencies: U.S. Department of Treasury and Department of Transportation Federal Program Titles: COVID-19 Coronavirus State and Local Fiscal Recovery Funds and Highway Planning and Construction Cluster Assistance Listing Numbers: 21.027 and 20.205 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agencies: Indiana Finance Authority and Indiana Department of Transportation Pass-Through Numbers: 21.027: Unknown, 20.205: Des. 1593056, Des. 1400296, Des. 1900448, Des. 1702832, Des. 1400638, Des. 1400639, Des. 2100024, and Des. 2101602 Type of Finding: • Significant Deficiency Criteria or Specific Requirement – Procurement, Suspension, and Debarment: Pursuant to 31 CFR § 19.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended and debarred or whose principals are suspended or debarred. The non-Federal entity must verify that the contracted entity is not suspended or debarred or otherwise excluded. In addition, pursuant to 2 CFR § 200.303, which states in part, the non-Federal entity must establish and maintain an effective internal control over the Federal awards 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. Condition: The County could not provide support that it had reviewed the “List of Parties Excluded from Federal Procurement and Nonprocurement Programs” during their procurement procedures on a consistent basis. The County had not properly designed or implemented a system of internal controls, that would likely be effective in preventing, detecting and correcting, noncompliance. Questioned Costs: None Context: It was noted that for ALN 21.027, three files selected for testing from a population of twenty-six files, and for ALN 20.205, one file selected for testing from a population of six, did not have documented evidence supporting that the County had determined that the contracted parties were not suspended or debarred. Our sample was not intended to be statistically valid. Effect: The County was unable to support vendors were not suspended or debarred. Cause: Failure to maintain sufficient procurement records. Identification as a Repeat Finding: Yes, 2022-002 Recommendation: We recommend that the County maintain adequate documentation to ensure compliance with the suspension and debarment requirement. This documentation could include a print out from the Excluded Parties List System maintained by the General Services Administration, collection of a certification from the contracted party, or adding a clause or condition to the covered transaction with the contracted party. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agencies: U.S. Department of Treasury and Department of Transportation Federal Program Titles: COVID-19 Coronavirus State and Local Fiscal Recovery Funds and Highway Planning and Construction Cluster Assistance Listing Numbers: 21.027 and 20.205 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agencies: Indiana Finance Authority and Indiana Department of Transportation Pass-Through Numbers: 21.027: Unknown, 20.205: Des. 1593056, Des. 1400296, Des. 1900448, Des. 1702832, Des. 1400638, Des. 1400639, Des. 2100024, and Des. 2101602 Type of Finding: • Significant Deficiency Criteria or Specific Requirement – Procurement, Suspension, and Debarment: Pursuant to 31 CFR § 19.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended and debarred or whose principals are suspended or debarred. The non-Federal entity must verify that the contracted entity is not suspended or debarred or otherwise excluded. In addition, pursuant to 2 CFR § 200.303, which states in part, the non-Federal entity must establish and maintain an effective internal control over the Federal awards 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. Condition: The County could not provide support that it had reviewed the “List of Parties Excluded from Federal Procurement and Nonprocurement Programs” during their procurement procedures on a consistent basis. The County had not properly designed or implemented a system of internal controls, that would likely be effective in preventing, detecting and correcting, noncompliance. Questioned Costs: None Context: It was noted that for ALN 21.027, three files selected for testing from a population of twenty-six files, and for ALN 20.205, one file selected for testing from a population of six, did not have documented evidence supporting that the County had determined that the contracted parties were not suspended or debarred. Our sample was not intended to be statistically valid. Effect: The County was unable to support vendors were not suspended or debarred. Cause: Failure to maintain sufficient procurement records. Identification as a Repeat Finding: Yes, 2022-002 Recommendation: We recommend that the County maintain adequate documentation to ensure compliance with the suspension and debarment requirement. This documentation could include a print out from the Excluded Parties List System maintained by the General Services Administration, collection of a certification from the contracted party, or adding a clause or condition to the covered transaction with the contracted party. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agencies: U.S. Department of Treasury and Department of Transportation Federal Program Titles: COVID-19 Coronavirus State and Local Fiscal Recovery Funds and Highway Planning and Construction Cluster Assistance Listing Numbers: 21.027 and 20.205 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agencies: Indiana Finance Authority and Indiana Department of Transportation Pass-Through Numbers: 21.027: Unknown, 20.205: Des. 1593056, Des. 1400296, Des. 1900448, Des. 1702832, Des. 1400638, Des. 1400639, Des. 2100024, and Des. 2101602 Type of Finding: • Significant Deficiency Criteria or Specific Requirement – Procurement, Suspension, and Debarment: Pursuant to 31 CFR § 19.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended and debarred or whose principals are suspended or debarred. The non-Federal entity must verify that the contracted entity is not suspended or debarred or otherwise excluded. In addition, pursuant to 2 CFR § 200.303, which states in part, the non-Federal entity must establish and maintain an effective internal control over the Federal awards 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. Condition: The County could not provide support that it had reviewed the “List of Parties Excluded from Federal Procurement and Nonprocurement Programs” during their procurement procedures on a consistent basis. The County had not properly designed or implemented a system of internal controls, that would likely be effective in preventing, detecting and correcting, noncompliance. Questioned Costs: None Context: It was noted that for ALN 21.027, three files selected for testing from a population of twenty-six files, and for ALN 20.205, one file selected for testing from a population of six, did not have documented evidence supporting that the County had determined that the contracted parties were not suspended or debarred. Our sample was not intended to be statistically valid. Effect: The County was unable to support vendors were not suspended or debarred. Cause: Failure to maintain sufficient procurement records. Identification as a Repeat Finding: Yes, 2022-002 Recommendation: We recommend that the County maintain adequate documentation to ensure compliance with the suspension and debarment requirement. This documentation could include a print out from the Excluded Parties List System maintained by the General Services Administration, collection of a certification from the contracted party, or adding a clause or condition to the covered transaction with the contracted party. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agencies: U.S. Department of Treasury and Department of Transportation Federal Program Titles: COVID-19 Coronavirus State and Local Fiscal Recovery Funds and Highway Planning and Construction Cluster Assistance Listing Numbers: 21.027 and 20.205 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agencies: Indiana Finance Authority and Indiana Department of Transportation Pass-Through Numbers: 21.027: Unknown, 20.205: Des. 1593056, Des. 1400296, Des. 1900448, Des. 1702832, Des. 1400638, Des. 1400639, Des. 2100024, and Des. 2101602 Type of Finding: • Significant Deficiency Criteria or Specific Requirement – Procurement, Suspension, and Debarment: Pursuant to 31 CFR § 19.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended and debarred or whose principals are suspended or debarred. The non-Federal entity must verify that the contracted entity is not suspended or debarred or otherwise excluded. In addition, pursuant to 2 CFR § 200.303, which states in part, the non-Federal entity must establish and maintain an effective internal control over the Federal awards 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. Condition: The County could not provide support that it had reviewed the “List of Parties Excluded from Federal Procurement and Nonprocurement Programs” during their procurement procedures on a consistent basis. The County had not properly designed or implemented a system of internal controls, that would likely be effective in preventing, detecting and correcting, noncompliance. Questioned Costs: None Context: It was noted that for ALN 21.027, three files selected for testing from a population of twenty-six files, and for ALN 20.205, one file selected for testing from a population of six, did not have documented evidence supporting that the County had determined that the contracted parties were not suspended or debarred. Our sample was not intended to be statistically valid. Effect: The County was unable to support vendors were not suspended or debarred. Cause: Failure to maintain sufficient procurement records. Identification as a Repeat Finding: Yes, 2022-002 Recommendation: We recommend that the County maintain adequate documentation to ensure compliance with the suspension and debarment requirement. This documentation could include a print out from the Excluded Parties List System maintained by the General Services Administration, collection of a certification from the contracted party, or adding a clause or condition to the covered transaction with the contracted party. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agencies: U.S. Department of Treasury and Department of Transportation Federal Program Titles: COVID-19 Coronavirus State and Local Fiscal Recovery Funds and Highway Planning and Construction Cluster Assistance Listing Numbers: 21.027 and 20.205 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agencies: Indiana Finance Authority and Indiana Department of Transportation Pass-Through Numbers: 21.027: Unknown, 20.205: Des. 1593056, Des. 1400296, Des. 1900448, Des. 1702832, Des. 1400638, Des. 1400639, Des. 2100024, and Des. 2101602 Type of Finding: • Significant Deficiency Criteria or Specific Requirement – Procurement, Suspension, and Debarment: Pursuant to 31 CFR § 19.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended and debarred or whose principals are suspended or debarred. The non-Federal entity must verify that the contracted entity is not suspended or debarred or otherwise excluded. In addition, pursuant to 2 CFR § 200.303, which states in part, the non-Federal entity must establish and maintain an effective internal control over the Federal awards 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. Condition: The County could not provide support that it had reviewed the “List of Parties Excluded from Federal Procurement and Nonprocurement Programs” during their procurement procedures on a consistent basis. The County had not properly designed or implemented a system of internal controls, that would likely be effective in preventing, detecting and correcting, noncompliance. Questioned Costs: None Context: It was noted that for ALN 21.027, three files selected for testing from a population of twenty-six files, and for ALN 20.205, one file selected for testing from a population of six, did not have documented evidence supporting that the County had determined that the contracted parties were not suspended or debarred. Our sample was not intended to be statistically valid. Effect: The County was unable to support vendors were not suspended or debarred. Cause: Failure to maintain sufficient procurement records. Identification as a Repeat Finding: Yes, 2022-002 Recommendation: We recommend that the County maintain adequate documentation to ensure compliance with the suspension and debarment requirement. This documentation could include a print out from the Excluded Parties List System maintained by the General Services Administration, collection of a certification from the contracted party, or adding a clause or condition to the covered transaction with the contracted party. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal Agencies: U.S. Department of Treasury and Department of Transportation Federal Program Titles: COVID-19 Coronavirus State and Local Fiscal Recovery Funds and Highway Planning and Construction Cluster Assistance Listing Numbers: 21.027 and 20.205 Federal Award Program Year: January 1, 2023 – December 31, 2023 Pass-Through Agencies: Indiana Finance Authority and Indiana Department of Transportation Pass-Through Numbers: 21.027: Unknown, 20.205: Des. 1593056, Des. 1400296, Des. 1900448, Des. 1702832, Des. 1400638, Des. 1400639, Des. 2100024, and Des. 2101602 Type of Finding: • Significant Deficiency Criteria or Specific Requirement – Procurement, Suspension, and Debarment: Pursuant to 31 CFR § 19.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended and debarred or whose principals are suspended or debarred. The non-Federal entity must verify that the contracted entity is not suspended or debarred or otherwise excluded. In addition, pursuant to 2 CFR § 200.303, which states in part, the non-Federal entity must establish and maintain an effective internal control over the Federal awards 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. Condition: The County could not provide support that it had reviewed the “List of Parties Excluded from Federal Procurement and Nonprocurement Programs” during their procurement procedures on a consistent basis. The County had not properly designed or implemented a system of internal controls, that would likely be effective in preventing, detecting and correcting, noncompliance. Questioned Costs: None Context: It was noted that for ALN 21.027, three files selected for testing from a population of twenty-six files, and for ALN 20.205, one file selected for testing from a population of six, did not have documented evidence supporting that the County had determined that the contracted parties were not suspended or debarred. Our sample was not intended to be statistically valid. Effect: The County was unable to support vendors were not suspended or debarred. Cause: Failure to maintain sufficient procurement records. Identification as a Repeat Finding: Yes, 2022-002 Recommendation: We recommend that the County maintain adequate documentation to ensure compliance with the suspension and debarment requirement. This documentation could include a print out from the Excluded Parties List System maintained by the General Services Administration, collection of a certification from the contracted party, or adding a clause or condition to the covered transaction with the contracted party. Views of Responsible Officials and Planned Corrective Action: The County is aware of the compliance requirement and has implemented additional procedures, including certain of those identified in the recommendation above, to be able to support suspension and debarment processes are in place. Persons responsible for implementing: Abby Doyle, Chief Deputy Auditor Anticipated completion date: Completed.
Federal agency: Neighborhood Reinvestment Corporation (Pass-Through Grantor) Federal program title: Housing Stability Counseling Program Assistance Listing Number: 99.U19 Award Period: September 8, 2021 – April 30, 2024 • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: Uniform Grant Guidance requires compliance with the provisions of internal controls. 2 CFR Part 200.303 states that recipients of federal funds are required to establish and maintain effective internal control over the federal awards to provide reasonable assurance that the recipient of federal funds is in compliance with federal statutes, regulations and the terms and conditions of the federal award. The Foundation should have internal controls designed and effectively operating to ensure compliance with those provisions. Condition: The Foundation was not able to produce audit evidence of the review and approval of its financial and quarterly performance reports. Two out of two financial reports and three out of three quarterly performance reports did not have adequate evidence to show the reports were reviewed and approved. Questioned costs: None. Cause: The Foundation does not have policies and procedures in place to ensure formal documentation of review and approval of the financial and quarterly performance reports. Effect: The lack of effective internal controls over reporting compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend that the Foundation update its policies and procedures to ensure formal documented review and approval over financial and performance reports. Procedures must include documentation and proper sign offs from preparer and reviewer of the reports. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
2023-005 Reporting – Federal Funding Accountability and Transparency Act (FFATA) Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Housing and Urban Development Program: 14.218 Community Development Block Grants/Entitlement Grants Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 Code of Federal Regulations, 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). Condition: Anoka County has not submitted subaward information in the FSRS as required by the FFATA for the Community Development Block Grant. Questioned Costs: None. Context: A subaward is any award provided by a pass-through entity to a subrecipient for the subrecipient to administer part of a federal award received by the pass-through entity. This issue was noted during the audit of the Community Development Block Grant; however, it impacts federal programs County-wide. Effect: Anoka County is not in compliance with FFATA reporting. Cause: The County missed HUD notifications that FFATA needed to be implemented. Recommendation: We recommend Anoka County implement procedures to complete reports required by FFATA. In addition, we recommend Anoka County work with the federal government on how best to correct reporting. View of Responsible Official: Concur
2023-005 Reporting – Federal Funding Accountability and Transparency Act (FFATA) Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Housing and Urban Development Program: 14.218 Community Development Block Grants/Entitlement Grants Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 Code of Federal Regulations, 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). Condition: Anoka County has not submitted subaward information in the FSRS as required by the FFATA for the Community Development Block Grant. Questioned Costs: None. Context: A subaward is any award provided by a pass-through entity to a subrecipient for the subrecipient to administer part of a federal award received by the pass-through entity. This issue was noted during the audit of the Community Development Block Grant; however, it impacts federal programs County-wide. Effect: Anoka County is not in compliance with FFATA reporting. Cause: The County missed HUD notifications that FFATA needed to be implemented. Recommendation: We recommend Anoka County implement procedures to complete reports required by FFATA. In addition, we recommend Anoka County work with the federal government on how best to correct reporting. View of Responsible Official: Concur
2023-004 Special Tests and Provisions – Review of Prevailing Wage Reports Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Transportation Program: 20.205 Highway Planning and Construction Award Number and Year: 00002; 2023 Pass-Through Agency: Minnesota Department of Transportation Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Davis-Bacon Act (23 U.S.C. § 113) and 29 CFR part 5 requires that contractors and subcontractors performing work on federal contracts in excess of $2,000 pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits listed in the contract’s wage determination class. Each covered contractor and subcontractor must, on a weekly basis, provide a copy of the payroll reports including the information listed under the records and certified payrolls section of 29 CFR part 5. Condition: The County is not obtaining assurance that the requirements of the Davis-Bacon Act are being performed for one of two federal projects selected for testing. Questioned Costs: None. Context: The project is a joint project with the Minnesota Department of Transportation (MnDOT). The County informed us MnDOT accepted responsibility for ensuring compliance with federal prevailing wage rate standards. Currently, there is no formal agreement in place between MnDOT and Anoka County that establishes or supports who is responsible for the requirements of the program. In addition, the County is not obtaining evidence or performing a review of the prevailing wage rate work performed by MnDOT to ensure compliance with the standards. Effect: Not reviewing payroll reports submitted by contractors or subcontractors or performing other procedures to verify compliance increases the risk that inappropriate wage rates are paid. Cause: The County believes that MnDOT is obtaining and reviewing certified payroll information from contractors. Recommendation: We recommend the County begin performing a review of the prevailing wage rate requirements or obtain evidence of the work performed by MnDOT. View of Responsible Official: Concur
Finding 2023-002 (L. Reporting) Identification of the federal program: Federal Agency: United States Department of Housing and Urban Development Assistance Listing No.: 14.241 – Housing Opportunities for Persons with AIDS (HOPWA) Pass-through Entities and Award Periods: Indiana Housing and Community Development Authority (IHCDA) – July 1, 2022 through June 30, 2023 and July 1, 2023 through June 30, 2024 and City of Indianapolis – April 1, 2022 through March 31, 2023 and April 1, 2024 through March 31, 2024 Criteria or specific requirement (Including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Under the grant agreements, HOPWA grantees are required to submit performance reporting, specifically a HUD-40-110-D, HOPWA Consolidated Annual Performance and Evaluation Report (CAPER), no later than 90 days after the close of the program or operating year, as required per 24 CFR section 574.520. Condition: The CAPER submission submitted by Indiana University Health, Inc. and Subsidiaries for the IHCDA grant for the period July 1, 2022 through June 30, 2023, incorrectly excluded $3,600 in funds expended on eligible activities (specifically, support services). For both the HOPWA CAPER submissions, the documentation retained did not support the extent of the review procedures performed prior to the CAPER submissions. Cause: Indiana University Health, Inc. and Subsidiaries’ internal control over the CAPER reporting process was not operating effectively during the year ended December 31, 2023. Effect or potential effect: Incorrect CAPER submissions were filed with HUD as a result of the control not operating effectively. Questioned costs: None. Context: Indiana University Health, Inc. and Subsidiaries submitted two CAPER reports during the year ended December 31, 2023. EY tested both CAPER reports for testing of internal controls over compliance and compliance for HOPWA reporting. The CAPER submission for the IHCDA grant for the period July 1, 2022 through June 30, 2023, incorrectly excluded $3,600 in funds expended on eligible activities. The documentation retained for both reports filed did not support the extent of the review procedures performed prior to the CAPER submissions. Total federal expenditures for Assistance Listing No. 14.241 totaled $1,201,378 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: Indiana University Health, Inc. and Subsidiaries should ensure the completed CAPER and underlying support are sufficiently reviewed to identify discrepancies and documentation of those review procedures are maintained prior to submitting the CAPER. Views of responsible officials: Indiana University Health, Inc. and Subsidiaries believes it appropriately designed procedures and internal controls over the HOPWA reporting requirements. Indiana University Health, Inc. and Subsidiaries agrees that the CAPER submission for the IHCDA grant for the period of July 1, 2022 through June 30, 2023, contained incomplete and inaccurate information. Indiana University Health, Inc. has revisited the internal control over HOPWA performance reporting
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLFRP2971 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 RIPLEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2022-001. Condition and Context Prior to entering into subawards and covered transactions with State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such beneficiaries are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the County to review the procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the County divulged that it had none. A population of eight covered transactions, totaling $2,425,309, that equaled or exceeded $25,000 paid from SLFRF funds during the audit period was identified. For each of the eight transactions, the County did not verify the suspension and debarment status prior to payment due to the County not having any policies or procedures in place to verify that beneficiaries were neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 14 RIPLEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The County had not designed or implemented policies and procedures to verify that beneficiaries were not suspended or debarred or otherwise excluded from participating in federal programs prior to entering into covered transactions using SLFRF funds. Effect The County cannot ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover the funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure beneficiaries that are paid $25,000 or more, all or in part with federal funds, are not suspended, debarred, or otherwise excluded prior to entering into any contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLFRP2971 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a county with a population below 250,000 residents that was allocated less than $10 million in State and Local Fiscal Recovery Funds funding. As such, the P&E report, covering the period April 1, 2022 to March 31, 2023, was required to be submitted to the Treasury by April 30, 2023. The subsequent annual reports are to cover one year from April 1 to March 31 and must be submitted to the Treasury by April 30 of each year. INDIANA STATE BOARD OF ACCOUNTS 15 RIPLEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The County submitted the P&E report by April 30, 2023, as required; however, a single employee prepared and submitted the P&E report without a review or oversight process in place to prevent, or detect and correct, errors. As a result, the report included projects with current period obligations and cumulative obligations totaling $3,319,955 that had not yet been obligated by the end of the reporting period. The lack of internal controls and noncompliance was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds. . . ." Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10 states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." Cause A proper system of internal controls, including policies and procedures, was not designed or implemented by management of the County to prevent and detect errors on the P&E report prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the County did not accurately report current period obligations and cumulative obligations when filing the P&E report for the period April 1, 2022 to March 31, 2023. Noncompliance with the provisions of federal regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. INDIANA STATE BOARD OF ACCOUNTS 16 RIPLEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight of federal reports are taking place. We also recommended the development of policies and procedures to ensure the County provides the Treasury with complete and accurate information for the P&E report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-002 Timesheet Review Information on the Federal Program: Assistance Listing Number 21.027—U.S Department of Treasury, Coronavirus State and Local Fiscal Recovery Funds. Compliance Requirements: Allowable Cost and Activities Type of Finding: Significant Deficiency. Criteria: 2 CFR 200.303 requires all non-federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: In our testing of 25 time cards, we noted that there is no documented evidence that time cards are being reviewed prior to being submitted for reimbursement. No instances of non-compliance, or errors, were noted in this testing. Cause: Colorado Poverty Law doesn’t have policies that require timecards be reviewed prior to submission. Effect or Potential Effect: Time submitted for reimbursement could be inaccurate. Questioned Costs: None. Context: We tested 25 time cards to ensure amounts charged to the grant were adequately supported. This covered $61,206 of the $1,315,667 of salaries submitted for reimbursement. In all 25 instances, the time card allocations supported the amount charged to the grant, but none of these instances contained any evidence the time card was reviewed. Recommendation: We recommend that Colorado Poverty Law adopt a policy to review timesheets prior to submission for reimbursement. Views of Responsible Official: We agree with this finding, and corrective action was taken in May 2024. The Executive Director along with the Operations Manager review all time entries at each month-end to ensure staff time is accurately recorded and appropriately allocated to each funding source prior to submitting to the grantor for reimbursement.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Internal Controls Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): YR 2023; CONTRACT 64511; FR-2023-ILBC-00020 Pass-Through Entities: Indiana State Department of Health, Indiana Department of Homeland Security Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Finding: Material Weakness Condition and Context Prior to receipt of direct State and Local Fiscal Recovery Funds (SLFRF) award funds, all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the County was responsible for the effective administration of the federal award, as well as the application of sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet local needs within four separate eligible use categories. Recipients may use SLFRF funds to: Respond to the COVID-19 public health emergency and its negative economic impacts; Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; and Make necessary investments in water, sewer, or broadband infrastructure. Pursuant to the Agreement, the period of performance for the award began on the date the funds were disbursed to the County and ends on December 31, 2026. Recipients may only use funds to cover costs incurred during the period that began on June 7, 2021, and ends on December 31, 2024. Recipients must liquidate all obligations incurred by December 31, 2024, under the award no later than December 31, 2026, which is the end of the period of performance. In addition, prior to receipt of SLFRF award funds passed through from other entities, the County was required to execute a subrecipient agreement which included terms and conditions that recipients must comply with in carrying out the objectives of its award. Recipients were to use SLFRF funds to develop and improve health outcomes and acquire body cameras for law enforcement. Furthermore, pursuant to the subrecipient agreements, the period of performance for the award began on 8/1/22 and 1/1/23 and ends on 6/30/24 and 12/31/23, respectively. INDIANA STATE BOARD OF ACCOUNTS 16 KNOX COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Accounts payable vouchers paid from the SLFRF fund were processed by one County employee. The employee reviewed and approved the accounts payable voucher to ensure all expenditures were for allowable activities, allowable costs, and were within the period of performance prior to issuing payment from the SLFRF fund. Of the 60 accounts payable vouchers tested during the audit period, 4 were not properly reviewed or approved by the employee responsible for ensuring compliance. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 Accounts payable vouchers were not approved when the employee that ensured compliance was on vacation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls to ensure appropriate reviews, approvals, and oversight are taking place prior to payment on a regular basis and when individuals are absent. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Internal Controls Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): YR 2023; CONTRACT 64511; FR-2023-ILBC-00020 Pass-Through Entities: Indiana State Department of Health, Indiana Department of Homeland Security Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Finding: Material Weakness Condition and Context Prior to receipt of direct State and Local Fiscal Recovery Funds (SLFRF) award funds, all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the County was responsible for the effective administration of the federal award, as well as the application of sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet local needs within four separate eligible use categories. Recipients may use SLFRF funds to: Respond to the COVID-19 public health emergency and its negative economic impacts; Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; and Make necessary investments in water, sewer, or broadband infrastructure. Pursuant to the Agreement, the period of performance for the award began on the date the funds were disbursed to the County and ends on December 31, 2026. Recipients may only use funds to cover costs incurred during the period that began on June 7, 2021, and ends on December 31, 2024. Recipients must liquidate all obligations incurred by December 31, 2024, under the award no later than December 31, 2026, which is the end of the period of performance. In addition, prior to receipt of SLFRF award funds passed through from other entities, the County was required to execute a subrecipient agreement which included terms and conditions that recipients must comply with in carrying out the objectives of its award. Recipients were to use SLFRF funds to develop and improve health outcomes and acquire body cameras for law enforcement. Furthermore, pursuant to the subrecipient agreements, the period of performance for the award began on 8/1/22 and 1/1/23 and ends on 6/30/24 and 12/31/23, respectively. INDIANA STATE BOARD OF ACCOUNTS 16 KNOX COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Accounts payable vouchers paid from the SLFRF fund were processed by one County employee. The employee reviewed and approved the accounts payable voucher to ensure all expenditures were for allowable activities, allowable costs, and were within the period of performance prior to issuing payment from the SLFRF fund. Of the 60 accounts payable vouchers tested during the audit period, 4 were not properly reviewed or approved by the employee responsible for ensuring compliance. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 Accounts payable vouchers were not approved when the employee that ensured compliance was on vacation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls to ensure appropriate reviews, approvals, and oversight are taking place prior to payment on a regular basis and when individuals are absent. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Internal Controls Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): YR 2023; CONTRACT 64511; FR-2023-ILBC-00020 Pass-Through Entities: Indiana State Department of Health, Indiana Department of Homeland Security Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Finding: Material Weakness Condition and Context Prior to receipt of direct State and Local Fiscal Recovery Funds (SLFRF) award funds, all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the County was responsible for the effective administration of the federal award, as well as the application of sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet local needs within four separate eligible use categories. Recipients may use SLFRF funds to: Respond to the COVID-19 public health emergency and its negative economic impacts; Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; and Make necessary investments in water, sewer, or broadband infrastructure. Pursuant to the Agreement, the period of performance for the award began on the date the funds were disbursed to the County and ends on December 31, 2026. Recipients may only use funds to cover costs incurred during the period that began on June 7, 2021, and ends on December 31, 2024. Recipients must liquidate all obligations incurred by December 31, 2024, under the award no later than December 31, 2026, which is the end of the period of performance. In addition, prior to receipt of SLFRF award funds passed through from other entities, the County was required to execute a subrecipient agreement which included terms and conditions that recipients must comply with in carrying out the objectives of its award. Recipients were to use SLFRF funds to develop and improve health outcomes and acquire body cameras for law enforcement. Furthermore, pursuant to the subrecipient agreements, the period of performance for the award began on 8/1/22 and 1/1/23 and ends on 6/30/24 and 12/31/23, respectively. INDIANA STATE BOARD OF ACCOUNTS 16 KNOX COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Accounts payable vouchers paid from the SLFRF fund were processed by one County employee. The employee reviewed and approved the accounts payable voucher to ensure all expenditures were for allowable activities, allowable costs, and were within the period of performance prior to issuing payment from the SLFRF fund. Of the 60 accounts payable vouchers tested during the audit period, 4 were not properly reviewed or approved by the employee responsible for ensuring compliance. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 Accounts payable vouchers were not approved when the employee that ensured compliance was on vacation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls to ensure appropriate reviews, approvals, and oversight are taking place prior to payment on a regular basis and when individuals are absent. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Cluster: Research and Development Supporting Agency: Department of Commerce, Department of Energy, and Department of Human and Health Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing, Accelerating Commercial Maritime Demonstration Projects for Advanced Nuclear Reactor Technologies, Safety and Health Risks in Energy Transition for the Commercial Fishing Industry, The NASA Floater: 15MW Ultra-lightweight Concrete Hull with Sea-Water Ballast Tuned Mass Dampers, Scale model Experiments for Co-Designed FOWTs Supporting A High-Capacity (15 MW) Turbine, Demonstrating a Reduced-Footprint Synthetic Rope Mooring System that Minimizes Fishing Impacts and Costs for a 10MW+ Floating Wind Turbine Award Numbers: 70NANB21H038, DE-NE0009226, U01OH012502, UMS-1258, ABS-061720, and FOA- 2236 Assistance Listing Title: National Institute of Standards and Technology, Office of Nuclear Energy, Advanced Research Projects Agency, Office of Energy Efficiency and Renewable Energy, Center for Disease Control and Prevention (CDC) Assistance Listing Number: 11.609, 81.121, 81.135, 81.087, 93.262 Award Year: FY 2023 Criteria 2 CFR 200.303 notes that a non-Federal entity must: 1. 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). 2.Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards. We note that with regards to the Company’s internal controls over Federal awards, a monthly budget to actual review is to be performed and review evidenced for each grant to monitor grant activity, including allowability. Condition We selected 6 quarters out of a population of 61 quarters across the Research and Development Cluster awards for testing to evidence that a budget to actual review was being performed, as required by Company policy. Through our testing, we noted 6 instances where appropriate supporting documentation was not maintained to support that the budget to actual review was performed. We noted through inquiry of management that for each selection, a review of expenses was performed but evidence was not formally maintained of the budget to actual review. However, when reviewing the award budget and cumulative expenses incurred on the award for each selection, it was noted that each quarter selected was within budget. Cause The Company indicated budget to actual monitoring and reviews were not consistently performed due to a lack of clarity in the Company policy. The Company policy did not clearly articulate the process owners by activity and was updated in Q4 2023, therefore responsible parties were not aware of this required activity. Effect Lack of executing this control could result in ineligible costs being submitted for payment and jobs going above the agreed upon budget. Questioned Costs None noted. Recommendation We recommend the Company review their policies and ensure appropriate communication and coordination amongst relevant parties to ensure the budget to actual review is performed according to policy and appropriate documentation is maintained. This is a repeat finding of 2022-002, which continued to remain open during FY2023. Management’ Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report.
Cluster: Research and Development Supporting Agency: Department of Commerce, Department of Energy, and Department of Human and Health Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing, Accelerating Commercial Maritime Demonstration Projects for Advanced Nuclear Reactor Technologies, Safety and Health Risks in Energy Transition for the Commercial Fishing Industry, The NASA Floater: 15MW Ultra-lightweight Concrete Hull with Sea-Water Ballast Tuned Mass Dampers, Scale model Experiments for Co-Designed FOWTs Supporting A High-Capacity (15 MW) Turbine, Demonstrating a Reduced-Footprint Synthetic Rope Mooring System that Minimizes Fishing Impacts and Costs for a 10MW+ Floating Wind Turbine Award Numbers: 70NANB21H038, DE-NE0009226, U01OH012502, UMS-1258, ABS-061720, and FOA- 2236 Assistance Listing Title: National Institute of Standards and Technology, Office of Nuclear Energy, Advanced Research Projects Agency, Office of Energy Efficiency and Renewable Energy, Center for Disease Control and Prevention (CDC) Assistance Listing Number: 11.609, 81.121, 81.135, 81.087, 93.262 Award Year: FY 2023 Criteria 2 CFR 200.303 notes that a non-Federal entity must: 1. 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). 2.Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards. We note that with regards to the Company’s internal controls over Federal awards, a monthly budget to actual review is to be performed and review evidenced for each grant to monitor grant activity, including allowability. Condition We selected 6 quarters out of a population of 61 quarters across the Research and Development Cluster awards for testing to evidence that a budget to actual review was being performed, as required by Company policy. Through our testing, we noted 6 instances where appropriate supporting documentation was not maintained to support that the budget to actual review was performed. We noted through inquiry of management that for each selection, a review of expenses was performed but evidence was not formally maintained of the budget to actual review. However, when reviewing the award budget and cumulative expenses incurred on the award for each selection, it was noted that each quarter selected was within budget. Cause The Company indicated budget to actual monitoring and reviews were not consistently performed due to a lack of clarity in the Company policy. The Company policy did not clearly articulate the process owners by activity and was updated in Q4 2023, therefore responsible parties were not aware of this required activity. Effect Lack of executing this control could result in ineligible costs being submitted for payment and jobs going above the agreed upon budget. Questioned Costs None noted. Recommendation We recommend the Company review their policies and ensure appropriate communication and coordination amongst relevant parties to ensure the budget to actual review is performed according to policy and appropriate documentation is maintained. This is a repeat finding of 2022-002, which continued to remain open during FY2023. Management’ Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report.
Cluster: Research and Development Supporting Agency: Department of Commerce, Department of Energy, and Department of Human and Health Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing, Accelerating Commercial Maritime Demonstration Projects for Advanced Nuclear Reactor Technologies, Safety and Health Risks in Energy Transition for the Commercial Fishing Industry, The NASA Floater: 15MW Ultra-lightweight Concrete Hull with Sea-Water Ballast Tuned Mass Dampers, Scale model Experiments for Co-Designed FOWTs Supporting A High-Capacity (15 MW) Turbine, Demonstrating a Reduced-Footprint Synthetic Rope Mooring System that Minimizes Fishing Impacts and Costs for a 10MW+ Floating Wind Turbine Award Numbers: 70NANB21H038, DE-NE0009226, U01OH012502, UMS-1258, ABS-061720, and FOA- 2236 Assistance Listing Title: National Institute of Standards and Technology, Office of Nuclear Energy, Advanced Research Projects Agency, Office of Energy Efficiency and Renewable Energy, Center for Disease Control and Prevention (CDC) Assistance Listing Number: 11.609, 81.121, 81.135, 81.087, 93.262 Award Year: FY 2023 Criteria 2 CFR 200.303 notes that a non-Federal entity must: 1. 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). 2.Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards. We note that with regards to the Company’s internal controls over Federal awards, a monthly budget to actual review is to be performed and review evidenced for each grant to monitor grant activity, including allowability. Condition We selected 6 quarters out of a population of 61 quarters across the Research and Development Cluster awards for testing to evidence that a budget to actual review was being performed, as required by Company policy. Through our testing, we noted 6 instances where appropriate supporting documentation was not maintained to support that the budget to actual review was performed. We noted through inquiry of management that for each selection, a review of expenses was performed but evidence was not formally maintained of the budget to actual review. However, when reviewing the award budget and cumulative expenses incurred on the award for each selection, it was noted that each quarter selected was within budget. Cause The Company indicated budget to actual monitoring and reviews were not consistently performed due to a lack of clarity in the Company policy. The Company policy did not clearly articulate the process owners by activity and was updated in Q4 2023, therefore responsible parties were not aware of this required activity. Effect Lack of executing this control could result in ineligible costs being submitted for payment and jobs going above the agreed upon budget. Questioned Costs None noted. Recommendation We recommend the Company review their policies and ensure appropriate communication and coordination amongst relevant parties to ensure the budget to actual review is performed according to policy and appropriate documentation is maintained. This is a repeat finding of 2022-002, which continued to remain open during FY2023. Management’ Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report.
Cluster: Research and Development Supporting Agency: Department of Commerce, Department of Energy, and Department of Human and Health Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing, Accelerating Commercial Maritime Demonstration Projects for Advanced Nuclear Reactor Technologies, Safety and Health Risks in Energy Transition for the Commercial Fishing Industry, The NASA Floater: 15MW Ultra-lightweight Concrete Hull with Sea-Water Ballast Tuned Mass Dampers, Scale model Experiments for Co-Designed FOWTs Supporting A High-Capacity (15 MW) Turbine, Demonstrating a Reduced-Footprint Synthetic Rope Mooring System that Minimizes Fishing Impacts and Costs for a 10MW+ Floating Wind Turbine Award Numbers: 70NANB21H038, DE-NE0009226, U01OH012502, UMS-1258, ABS-061720, and FOA- 2236 Assistance Listing Title: National Institute of Standards and Technology, Office of Nuclear Energy, Advanced Research Projects Agency, Office of Energy Efficiency and Renewable Energy, Center for Disease Control and Prevention (CDC) Assistance Listing Number: 11.609, 81.121, 81.135, 81.087, 93.262 Award Year: FY 2023 Criteria 2 CFR 200.303 notes that a non-Federal entity must: 1. 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). 2.Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards. We note that with regards to the Company’s internal controls over Federal awards, a monthly budget to actual review is to be performed and review evidenced for each grant to monitor grant activity, including allowability. Condition We selected 6 quarters out of a population of 61 quarters across the Research and Development Cluster awards for testing to evidence that a budget to actual review was being performed, as required by Company policy. Through our testing, we noted 6 instances where appropriate supporting documentation was not maintained to support that the budget to actual review was performed. We noted through inquiry of management that for each selection, a review of expenses was performed but evidence was not formally maintained of the budget to actual review. However, when reviewing the award budget and cumulative expenses incurred on the award for each selection, it was noted that each quarter selected was within budget. Cause The Company indicated budget to actual monitoring and reviews were not consistently performed due to a lack of clarity in the Company policy. The Company policy did not clearly articulate the process owners by activity and was updated in Q4 2023, therefore responsible parties were not aware of this required activity. Effect Lack of executing this control could result in ineligible costs being submitted for payment and jobs going above the agreed upon budget. Questioned Costs None noted. Recommendation We recommend the Company review their policies and ensure appropriate communication and coordination amongst relevant parties to ensure the budget to actual review is performed according to policy and appropriate documentation is maintained. This is a repeat finding of 2022-002, which continued to remain open during FY2023. Management’ Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report.
Cluster: Research and Development Supporting Agency: Department of Commerce, Department of Energy, and Department of Human and Health Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing, Accelerating Commercial Maritime Demonstration Projects for Advanced Nuclear Reactor Technologies, Safety and Health Risks in Energy Transition for the Commercial Fishing Industry, The NASA Floater: 15MW Ultra-lightweight Concrete Hull with Sea-Water Ballast Tuned Mass Dampers, Scale model Experiments for Co-Designed FOWTs Supporting A High-Capacity (15 MW) Turbine, Demonstrating a Reduced-Footprint Synthetic Rope Mooring System that Minimizes Fishing Impacts and Costs for a 10MW+ Floating Wind Turbine Award Numbers: 70NANB21H038, DE-NE0009226, U01OH012502, UMS-1258, ABS-061720, and FOA- 2236 Assistance Listing Title: National Institute of Standards and Technology, Office of Nuclear Energy, Advanced Research Projects Agency, Office of Energy Efficiency and Renewable Energy, Center for Disease Control and Prevention (CDC) Assistance Listing Number: 11.609, 81.121, 81.135, 81.087, 93.262 Award Year: FY 2023 Criteria 2 CFR 200.303 notes that a non-Federal entity must: 1. 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). 2.Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards. We note that with regards to the Company’s internal controls over Federal awards, a monthly budget to actual review is to be performed and review evidenced for each grant to monitor grant activity, including allowability. Condition We selected 6 quarters out of a population of 61 quarters across the Research and Development Cluster awards for testing to evidence that a budget to actual review was being performed, as required by Company policy. Through our testing, we noted 6 instances where appropriate supporting documentation was not maintained to support that the budget to actual review was performed. We noted through inquiry of management that for each selection, a review of expenses was performed but evidence was not formally maintained of the budget to actual review. However, when reviewing the award budget and cumulative expenses incurred on the award for each selection, it was noted that each quarter selected was within budget. Cause The Company indicated budget to actual monitoring and reviews were not consistently performed due to a lack of clarity in the Company policy. The Company policy did not clearly articulate the process owners by activity and was updated in Q4 2023, therefore responsible parties were not aware of this required activity. Effect Lack of executing this control could result in ineligible costs being submitted for payment and jobs going above the agreed upon budget. Questioned Costs None noted. Recommendation We recommend the Company review their policies and ensure appropriate communication and coordination amongst relevant parties to ensure the budget to actual review is performed according to policy and appropriate documentation is maintained. This is a repeat finding of 2022-002, which continued to remain open during FY2023. Management’ Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report.
Cluster: Research and Development Supporting Agency: Department of Commerce, Department of Energy, and Department of Human and Health Services Award Names: Standards/Guidance for Rapid Qualification of Metal-Based Additive Manufacturing, Accelerating Commercial Maritime Demonstration Projects for Advanced Nuclear Reactor Technologies, Safety and Health Risks in Energy Transition for the Commercial Fishing Industry, The NASA Floater: 15MW Ultra-lightweight Concrete Hull with Sea-Water Ballast Tuned Mass Dampers, Scale model Experiments for Co-Designed FOWTs Supporting A High-Capacity (15 MW) Turbine, Demonstrating a Reduced-Footprint Synthetic Rope Mooring System that Minimizes Fishing Impacts and Costs for a 10MW+ Floating Wind Turbine Award Numbers: 70NANB21H038, DE-NE0009226, U01OH012502, UMS-1258, ABS-061720, and FOA- 2236 Assistance Listing Title: National Institute of Standards and Technology, Office of Nuclear Energy, Advanced Research Projects Agency, Office of Energy Efficiency and Renewable Energy, Center for Disease Control and Prevention (CDC) Assistance Listing Number: 11.609, 81.121, 81.135, 81.087, 93.262 Award Year: FY 2023 Criteria 2 CFR 200.303 notes that a non-Federal entity must: 1. 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). 2.Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards. We note that with regards to the Company’s internal controls over Federal awards, a monthly budget to actual review is to be performed and review evidenced for each grant to monitor grant activity, including allowability. Condition We selected 6 quarters out of a population of 61 quarters across the Research and Development Cluster awards for testing to evidence that a budget to actual review was being performed, as required by Company policy. Through our testing, we noted 6 instances where appropriate supporting documentation was not maintained to support that the budget to actual review was performed. We noted through inquiry of management that for each selection, a review of expenses was performed but evidence was not formally maintained of the budget to actual review. However, when reviewing the award budget and cumulative expenses incurred on the award for each selection, it was noted that each quarter selected was within budget. Cause The Company indicated budget to actual monitoring and reviews were not consistently performed due to a lack of clarity in the Company policy. The Company policy did not clearly articulate the process owners by activity and was updated in Q4 2023, therefore responsible parties were not aware of this required activity. Effect Lack of executing this control could result in ineligible costs being submitted for payment and jobs going above the agreed upon budget. Questioned Costs None noted. Recommendation We recommend the Company review their policies and ensure appropriate communication and coordination amongst relevant parties to ensure the budget to actual review is performed according to policy and appropriate documentation is maintained. This is a repeat finding of 2022-002, which continued to remain open during FY2023. Management’ Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLFRP 3041 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 VERMILLION COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Nonfederal entities and contractors are subject to nonprocurement suspension and debarment regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in federal assistance programs or activities. This is done by checking the Excluded Parties List System, collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor. There were two vendors subject to suspension and debarment requirements during the audit period. Both vendors were selected for testing. The County did not perform procedures to ensure either vendor was not suspended, debarred, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Additionally, the County did not have a formalized procurement policy outlining its processes and procedures with regards to the procurement of goods and services using federal grant funds. The policy must conform to the procurement standards identified in 2 CFR 200.317 through 200.327 and should address ensuring vendors are not suspended or debarred prior to entering into covered transactions if the contract is expected to equal or exceed $25,000. The lack of internal controls was a systemic issue throughout the audit period and enabled material noncompliance to occur and remain undetected. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 14 VERMILLION COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.318(a) states: "The 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. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." Cause A proper system of internal controls was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design and implementation of an effectively designed system of internal controls, the County cannot ensure the vendors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Furthermore, with adequately designed and implemented policies that reflect the federal regulations as required, the County cannot ensure that goods and services paid with federal funds are properly procured. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a system of internal controls to ensure that verifications are performed to determine whether each contractor has been suspended or debarred from participating in federal contracts prior to making payment. In addition, we recommended the County develop a procurement policy that addresses and adheres to the federal requirements outlined in regulations. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLFRP 3041 Compliance Requirement: Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 15 VERMILLION COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a metropolitan county with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds funding. As such, the initial P&E report, covering the period from March 3, 2021 to March 31, 2022, was required to be submitted to the Treasury by April 30, 2022. The subsequent annual reports are to cover one calendar year and must be submitted to the Treasury by April 30 each year. The County had not designed or implemented a system of internal controls to ensure the annual P&E report due April 30, 2023, was complete and accurate prior to submission. One County official prepared and submitted the annual P&E report to the Treasury without a documented oversight, review, or approval process in place to ensure its accuracy. The lack of internal controls was isolated to the P&E report due April 30, 2023, for the fiscal reporting year ending March 31, 2023. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 A proper system of internal controls was not designed by management of the County, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. It also placed the County at risk of noncompliance with the grant agreement and could result in failure to file a report, filing late, or filing an inaccurate report with the grantor agency. INDIANA STATE BOARD OF ACCOUNTS 16 VERMILLION COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-002: U.S. Department of the Treasury Federal Financial Assistance Listing 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Controls over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The County’s reports submitted to the Department of Treasury were not reviewed and approved by a separate individual outside of the preparer. Cause: The County did not have an internal control process in place to ensure a secondary review and approval of the reports submitted to the Department of Treasury were performed by someone other than the preparer of the report. Effect: Without a secondary review and approval, there is a possibility that the report may not be accurately completed. Questioned Costs: None. Context / Sampling: For the Coronavirus State and Local Fiscal Recovery Funds, only one annual report was required to be filed. We tested the one annual report filed. Repeat Finding from Prior Year: No Recommendation: We recommend the County implement a control process which includes a secondary review and approval of the required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the noted finding. Refer to Corrective Action Plan.
Finding 2023-003: U.S. Department of the Treasury Federal Financial Assistance Listing 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Procurement Suspension and Debarment Type of Finding: Significant Deficiency in Internal Controls over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Per 31 CFR 19.300, prior to enter in subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 31 CFR § 19.300. Condition: The County did not review one vendor to determine that it was not suspended, debarred, or otherwise excluded prior to entering into a transaction with them. Cause: Adequate controls are not in place to require verification of suspension or debarment prior to entering into a contract. Effect: The County could enter into a contract with a suspended or debarred vendor. Questioned Costs: None Context / Sampling: We tested 9 of 28 transactions subject to suspension and debarment in the SLFRF program. Repeat Finding from Prior Year: No Recommendation: The County should review all vendors for suspension and debarment. Views of Responsible Officials: Management agrees with the noted finding. Refer to Corrective Action Plan.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): IN0086, 220410, 72270 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 TOWN OF CLARKSVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with the State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The Town did not have any policies or procedures in place related to the suspension and debarment requirements. A population of four covered transactions, totaling $2,359,400, that equaled or exceeded $25,000 paid from SLFRF funds were identified. All four covered transactions were selected for testing. For each of the four transactions, the Town did not verify the vendors' suspension or debarment status prior to payment due to the Town not having any policies or procedures in place to verify that contractors were neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Town's purchasing policy does not include procedures to verify the suspension and debarment status of vendors or subrecipients with whom the Town is entering into a covered transaction. In addition, the Town was not aware of the suspension and debarment requirements at the time the covered transactions were entered into. INDIANA STATE BOARD OF ACCOUNTS 14 TOWN OF CLARKSVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The Town cannot ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the Town used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town design and implement a system of internal controls to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): IN0086, 220410, 72270 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 TOWN OF CLARKSVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with the State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The Town did not have any policies or procedures in place related to the suspension and debarment requirements. A population of four covered transactions, totaling $2,359,400, that equaled or exceeded $25,000 paid from SLFRF funds were identified. All four covered transactions were selected for testing. For each of the four transactions, the Town did not verify the vendors' suspension or debarment status prior to payment due to the Town not having any policies or procedures in place to verify that contractors were neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Town's purchasing policy does not include procedures to verify the suspension and debarment status of vendors or subrecipients with whom the Town is entering into a covered transaction. In addition, the Town was not aware of the suspension and debarment requirements at the time the covered transactions were entered into. INDIANA STATE BOARD OF ACCOUNTS 14 TOWN OF CLARKSVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The Town cannot ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the Town used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town design and implement a system of internal controls to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): IN0086, 220410, 72270 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 TOWN OF CLARKSVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with the State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The Town did not have any policies or procedures in place related to the suspension and debarment requirements. A population of four covered transactions, totaling $2,359,400, that equaled or exceeded $25,000 paid from SLFRF funds were identified. All four covered transactions were selected for testing. For each of the four transactions, the Town did not verify the vendors' suspension or debarment status prior to payment due to the Town not having any policies or procedures in place to verify that contractors were neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Town's purchasing policy does not include procedures to verify the suspension and debarment status of vendors or subrecipients with whom the Town is entering into a covered transaction. In addition, the Town was not aware of the suspension and debarment requirements at the time the covered transactions were entered into. INDIANA STATE BOARD OF ACCOUNTS 14 TOWN OF CLARKSVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The Town cannot ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the Town used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town design and implement a system of internal controls to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
U.S. Department of Transportation Federal Audit Cluster 20.507 Federal Transit Formula Grant (applies to all grants) 2023-004 Procurement and Suspension and Debarment Criteria: The Uniform Guidance regulations (2 CFR section 200.320) require, among other things, that procurement for purchases of goods and services follow certain procedures related to obtaining and awarding of contracts based on sealed bid, competitive-, and non-competitive proposals. Additionally, 2 CFR Section 200.318(d) provides that written policies and procedures must document the avoidance of the acquisition of unnecessary or duplicative items and 2 CFR section 200.303(a) regulations require the entity to establish and maintain effective internal control over compliance with Federal statues, regulations, and the terms and conditions of grant awards. In addition, non-federal entities are prohibited from contracting with parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. 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. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: The portion related to procurement is a repeated finding from 2019, 2020, 2021, and 2022. During our testing of purchases under the procurement regulations, for 3 out of 8 vendors selected for testing, the System was unable to provide supporting documentation that these vendor services or supplies were procured in accordance with the standards in 2 CFR section 200.320. Additionally, while the System does maintain written policies and procedures related to procurement standards, these procedures were followed for items procured directly through the procurement department, however, FTA expenditures procured by the maintenance department did not follow the approved procedures and internal controls in accordance with the regulations referenced in the criteria above. During our testing of compliance with the suspension and debarment regulations, for 3 out of 8 vendors selected for testing (same vendors selected for procurement testing above), the System was unable to provide documentation of its conclusions that these vendors were not suspended or debarred. Based on a review of SAM.gov, none of these vendors were suspended or debarred. Questioned Costs: Known - $214,478, Likely - $561,548 for Procurement but not Suspension and Debarment. Cause: A significant deficiency exists in the internal controls over procurement and suspension and debarment for expenditures procured outside the normal processes of the procurement department. The System does not have adequate controls in place to ensure that appropriate supporting documentation is maintained for purchases made under the procurement standards to support the System’s consideration and/or conclusion for obtaining and awarding of contracts based on sealed bid, competitive, and non-competitive proposals or its determination of whether the vendor is suspended or debarred, when procured outside of the procurement department. Effect: The System may not be receiving the overall lowest cost for services and supplies procured by the agency. Without ensuring documentation is maintained over whether a vendor is suspended or debarred, the System may enter into contracts with unauthorized parties. Recommendation: We recommend the System implement internal controls to ensure that supporting documentation is maintained for the procurement of goods and services in accordance with 2 CFR Section 200.320. Additionally, we recommend that the System enhance its written policies and procedures to ensure that documentation is included regarding the avoidance of the acquisition of unnecessary or duplicative items. Documentation and policies should include procedures for the competitive bidding of bus parts on a annual basis and evidence that purchases are from these bid responses and from the lowest qualified vendor. A review of all contracts to ensure the appropriate language exists regarding suspension and debarment regulations or the System should consider an annual review of SAM.gov for all vendors. View of Responsible Official: The Agency will implement internal controls to ensure that supporting documentation is maintained for the procurement of goods and services in accordance with 2 CFR Section 200.320. The Agency will update our written policies and procedures to ensure that documentation is included regarding the avoidance of the acquisition of unnecessary or duplicative items. Documentation and policies will include procedures for the competitive bidding of bus parts on a quarterly basis and evidence that purchases are from these bid responses and from the lowest qualified vendor. Procurement will perform an annual review of SAM.gov for all vendors.
Suspension and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. The County’s procurement policy requires verification that vendors are not suspended or debarred. Condition: For both covered transactions tested, the County did not verify for suspended or debarred vendors, in accordance with its policy, prior to entering into the covered transaction. Additionally, for one of the transactions tested, the County did not have a contract on file that included a suspension and debarment clause. Questioned Costs: None Context: The suspension and debarment threshold is $25,000. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services. Cause: The County did not realize that consideration for suspension and debarment should be made for all federal contracts, including purchases made through state contracts. Recommendation: We recommend the County maintain documentation to demonstrate that vendors are not suspended, debarred, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Acknowledge
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 64313 Pass-Through Entity: Indiana State Department of Health Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context Recipients are required to submit program invoices to the Indiana Department of Health (IDOH) via email. Information to be reported includes, but is not limited to, the number of cases performed during the grant's period of performance. The County submitted the program invoices as required; however, there were no internal controls in place that would likely be effective in preventing, or detecting and correcting, noncompliance related to the reporting requirements. The program invoices were prepared and submitted by one employee without an oversight, review, or approval process to ensure accuracy and completeness. INDIANA STATE BOARD OF ACCOUNTS 16 WHITLEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls over program invoices was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 A proper system of internal controls was not designed and implemented by management of the County, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the County cannot ensure that the reports submitted are materially accurate and correct. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls, including policies and procedures, to ensure that the County provides the IDOH with complete and accurate information for the program invoices. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 17 WHITLEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context The County elected to receive the revenue loss allowance, allowing the County to claim its total State and Local Fiscal Recovery Funds (SLFRF) allocation of $6,597,109 as revenue loss to use for government services. As such, all SLFRF program funds were expended under the revenue loss eligible use category. The U.S. Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category, and that recipients' use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Due to the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the County was only required to comply with suspension and debarment requirements related to covered transactions. Upon inquiry of the County's policies and procedures related to suspension and debarment requirements, the County disclosed its process for the County Auditor to ensure that the agreements or contracts include language related to suspension and debarment. Two covered transactions for goods or services that equaled or exceeded $25,000 that were paid from SLFRF funds during the audit period were selected for testing. Each transaction was examined to determine whether the County verified the suspension and debarment status of the vendor prior to payment. The first covered transaction, in the amount of $25,428, was made to a contractor for the preparation of the County's SLFRF financial plan. The contract, as provided by the contractor, included a clause stating they were neither excluded nor disqualified from participating in federal assistance programs or activities. The second covered transaction, in the amount of $28,730, was made for excavation services. There was no suspension or debarment clause present in the contract. As such, the County did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 18 WHITLEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause After the last audit, the County established procedures to include a suspension and debarment clause in agreements or contracts. However, the County did not amend agreements or contracts entered into prior to the implementation of this policy. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure the contractors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended, debarred, or otherwise excluded from participating in federal programs prior to entering into any contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations require formal procurement methods when the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), which is set at $250,000 unless a lower more restrictive threshold is set by a nonfederal entity. As Indiana Code has a more restrictive threshold of $150,000, this threshold and formal procurement methods must be used when procuring goods and services in excess of $150,000. Formal procurement methods require following documented procedures and obtaining sealed bids or proposals. The Town had a documented procurement policy; however, the Town did not follow its policy for one of the two vendors that exceeded the simplified acquisition threshold. The vendor, paid $2,419,821, was chosen without obtaining sealed bids or proposals, nor was a formal contract entered into with the vendor. Furthermore, there was no documentation detailing the history of the procurement or the Town's justification for limiting competition. The lack of effective internal controls and noncompliance were isolated to the one vendor noted above. INDIANA STATE BOARD OF ACCOUNTS 15 TOWN OF BROWNSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with the State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is done by checking the Excluded Parties List System (EPLS), collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The Town's policies related to the SLFRF suspension and debarment requirements included a clause or condition added to covered transactions expected to equal or exceed $25,000 with that vendor. Three vendors were identified as having transactions that equaled or exceeded $25,000. All three vendors were selected for testing. The three vendors, with total expenditures of $4,333,484, were reviewed. For all three vendors, the Town did not have documented evidence that the clause was included in the contract with the vendor nor that any other methods were employed to verify the vendor was not suspended, debarred, or other excluded prior to entering into the transactions. The lack of internal controls and noncompliance were systematic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). . . ." 2 CFR 200.318 states in part: "(a) The 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. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." INDIANA STATE BOARD OF ACCOUNTS 16 TOWN OF BROWNSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.324(a) states: "The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals." 2 CFR 200.320 states in part: ". . . (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance awards exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. (i) In order for sealed bidding to be feasible, the following conditions should be present: (A) A complete, adequate, and realistic specification or purchase description is available; (B) Two or more responsible bidders are willing and able to compete effectively for the business; and (C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. (ii) If sealed bids are used, the following requirements apply: (A) Bids must be solicited from an adequate number of qualified sources, providing them sufficient response time prior to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicly advertised; (B) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond; (C) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly; INDIANA STATE BOARD OF ACCOUNTS 17 TOWN OF BROWNSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (D) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (E) Any or all bids may be rejected if there is a sound documented reason. (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. They are awarded in accordance with the following requirements: (i) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical; (ii) The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and making selections; (iii) Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the non-Federal entity, with price and other factors considered; and (iv) The non-Federal entity may use competitive proposal procedures for qualifications based procurement of architectural/engineering (A/E) professional services whereby offeror's qualifications are evaluated and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate." INDIANA STATE BOARD OF ACCOUNTS 18 TOWN OF BROWNSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS, or (b) Collecting a certification from that person if allowed by this rule, or (c) Adding a clause or condition to the covered transaction with that person." Cause The Town did not adhere to its procurement policy as written. Instead, a vendor was selected based on factors other than solicited bids. In addition, the Town was unable to provide documentation to demonstrate they included a clause in contracts or otherwise verified contractors were not suspended, debarred, or otherwise excluded prior to entering into the transaction as a direct result of the Town's policy not addressing those vendors not requiring a contract and not following the policy for those vendors who had a contract. Effect Without the proper implementation of an effectively designed system of internal controls, the Town cannot ensure goods and services were properly procured. As a result, one vendor paid did not have adequate documentation to support that the appropriate bid process was followed or that nonprocurement procedures were permissible. Furthermore, without the proper implementation of an effectively designed system of internal controls, the Town cannot ensure the vendors paid with federal funds are eligible to participate in federal programs. Any program funds the Town used to pay vendors that have been suspended or debarred would be unallowable. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommend that management of the Town establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering contracts or subawards, and document reasons for vendors that are chosen without adhering to formal procurement methods. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2023 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Condition and Context Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The Town was classified as a metropolitan town with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, the initial P&E report, covering the period from March 3, 2021 to March 31, 2022, was required to be submitted to the Treasury by April 30, 2022. The subsequent annual reports are to cover one calendar year and must be submitted to the Treasury by April 30 each year. The Town submitted one P&E report during the audit period as required; however, there were no internal controls in place that would likely be effective in preventing, or detecting and correcting, noncompliance related to the P&E report. The Clerk-Treasurer prepared and submitted the report without an oversight or review process. The lack of internal controls and noncompliance were systematic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 TOWN OF BROWNSBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Cause The Town did not implement an effectively designed system of internal controls over reporting. There was no indication of internal controls in place over Reporting. Effect Without the proper implementation of an effectively designed system of internal controls over Reporting, the Town cannot ensure that the reports submitted are materially accurate and correct. If there was a proper implementation of an effectively designed system of internal controls over Reporting, the Town would be able to detect any errors prior to submission. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town design and implement a proper system of internal controls, including policies and procedures to ensure that the Town provides the Treasury with complete and accurate information for the P&E report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
SPECIAL TESTS AND PROVISIONS- OBLIGATION, EXPENDITURE AND PAYMENT REQUIREMENTS Significant Deficiency in Internal Control Over Compliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-22-MC-08-0005 Award Year: 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR section 576.203(a)(2) states – Within 180 days after the date that HUD signs the grant agreement (or a grant amendment for reallocation of funds) with the metropolitan city, urban county, or territory, the recipient must obligate all the grant amount, except the amount for its administrative costs. This requirement is met by an agreement with, or a letter of award requiring payment to, a subrecipient; a procurement contract; or a written designation of a department within the government of the recipient to directly carry out an eligible activity. Condition: The City’s Department of Housing Stability (HOST) did not have controls in place to ensure funds were obligated within the required obligation period. Cause: Controls were not implemented to ensure funds received under the grant were obligated within the required time frame. Effect or Potential Effect: Funds could be obligated outside of the defined time limit per 24 CFR section 576.203(a)(2). Questioned Costs: Not applicable Context: The control finding was remediated in 2023. However, the control was not present when the City entered into the grant agreement prior to 2023. No control testing was performed because no controls were in operation at the time of the award. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-005 in the 2022 report. Recommendation: HOST has developed controls over the timely obligation of Emergency Solutions Grant Program funds. HOST should ensure implementation of such developed controls upon entering into a new signed agreement with HUD. Views of Responsible Officials: The City agrees with the finding. This has been remediated. For additional information, see the City’s separate report for planned corrective actions.
SPECIAL TESTS AND PROVISIONS- OBLIGATION, EXPENDITURE AND PAYMENT REQUIREMENTS Significant Deficiency in Internal Control Over Compliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-22-MC-08-0005 Award Year: 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR section 576.203(a)(2) states – Within 180 days after the date that HUD signs the grant agreement (or a grant amendment for reallocation of funds) with the metropolitan city, urban county, or territory, the recipient must obligate all the grant amount, except the amount for its administrative costs. This requirement is met by an agreement with, or a letter of award requiring payment to, a subrecipient; a procurement contract; or a written designation of a department within the government of the recipient to directly carry out an eligible activity. Condition: The City’s Department of Housing Stability (HOST) did not have controls in place to ensure funds were obligated within the required obligation period. Cause: Controls were not implemented to ensure funds received under the grant were obligated within the required time frame. Effect or Potential Effect: Funds could be obligated outside of the defined time limit per 24 CFR section 576.203(a)(2). Questioned Costs: Not applicable Context: The control finding was remediated in 2023. However, the control was not present when the City entered into the grant agreement prior to 2023. No control testing was performed because no controls were in operation at the time of the award. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-005 in the 2022 report. Recommendation: HOST has developed controls over the timely obligation of Emergency Solutions Grant Program funds. HOST should ensure implementation of such developed controls upon entering into a new signed agreement with HUD. Views of Responsible Officials: The City agrees with the finding. This has been remediated. For additional information, see the City’s separate report for planned corrective actions.
PROCUREMENT AND SUSPENSION AND DEBARMENT (FOR SUBRECIPIENTS) Significant Deficiency in Internal Control Over Compliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-20-MW-08-0005, E-20-MC-08-0005, E-21-MC-08-0005, E-22-MC-08-0005 Award Year: 2020, 2021, 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The City department of HOST did not have effectively operating controls in place to ensure policies and procedures were followed with respect to suspension and debarment. HOST did have a compensating control in place pertaining to review of contracts to ensure suspension and debarment certifications were present. This was a finding carried over from the prior period. There were no new contracts entered into with subrecipients during 2023. Cause: The department’s review control was not operating effectively to ensure suspension and debarment searches were being performed. No documentation was retained to support such review took place. Effect or Potential Effect: The Department could potentially enter into contracts with subrecipients or vendors who were included on the suspension and debarment listing at SAM.gov. Questioned Costs: Not applicable Context: The control finding was remediated in 2023. However, the control was not present at the time the City entered into agreements with its subrecipients prior to 2023. No control testing was performed because no controls were in operation at the time of award. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-008 in the 2022 report. Recommendation: HOST should follow their documented internal control procedures to ensure the SAM.gov search is performed, and documentation is retained to support compliance with internal policies and procedures related to suspension and debarment. A checklist or other tool should be developed to ensure this has been performed prior to contracting. Views of Responsible Officials: The City agrees with the finding. This has been remediated. For additional information, see the City’s separate report for planned corrective actions.
PROCUREMENT AND SUSPENSION AND DEBARMENT (FOR SUBRECIPIENTS) Significant Deficiency in Internal Control Over Compliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-20-MW-08-0005, E-20-MC-08-0005, E-21-MC-08-0005, E-22-MC-08-0005 Award Year: 2020, 2021, 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The City department of HOST did not have effectively operating controls in place to ensure policies and procedures were followed with respect to suspension and debarment. HOST did have a compensating control in place pertaining to review of contracts to ensure suspension and debarment certifications were present. This was a finding carried over from the prior period. There were no new contracts entered into with subrecipients during 2023. Cause: The department’s review control was not operating effectively to ensure suspension and debarment searches were being performed. No documentation was retained to support such review took place. Effect or Potential Effect: The Department could potentially enter into contracts with subrecipients or vendors who were included on the suspension and debarment listing at SAM.gov. Questioned Costs: Not applicable Context: The control finding was remediated in 2023. However, the control was not present at the time the City entered into agreements with its subrecipients prior to 2023. No control testing was performed because no controls were in operation at the time of award. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-008 in the 2022 report. Recommendation: HOST should follow their documented internal control procedures to ensure the SAM.gov search is performed, and documentation is retained to support compliance with internal policies and procedures related to suspension and debarment. A checklist or other tool should be developed to ensure this has been performed prior to contracting. Views of Responsible Officials: The City agrees with the finding. This has been remediated. For additional information, see the City’s separate report for planned corrective actions.
TESTS AND PROVISIONS- OBLIGATION, EXPENDITURE AND PAYMENT REQUIREMENTS Material Weakness in Internal Control Over Compliance and Material Noncompliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-20-MW-08-0005, E-20-MC-08-0005, E-21-MC-08-0005, E-22-MC-08-0005 Award Year: 2020, 2021, 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR 576.203(c) states – The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient's complete payment request. Condition: HOST did not have adequate controls in place to ensure subrecipients were timely paid after receiving complete payment requests. HOST did not make payments to its subrecipients within 30 days after receiving complete payment requests. Cause: HOST did not have adequate internal controls in place to ensure payments were made timely to subrecipients. All four of the exceptions had to do with pending budget amendments needing to be made prior to payment, which resulted in payment delays. One exception was submitted to the Controller’s Office for payment prior to the 30-day requirement. However, the payment was still made past the deadline. Effect or Potential Effect: HOST is out of compliance with 24 CFR 576.203(c) regarding payments to subrecipients. Questioned Costs: None reported Context: BDO selected a sample of 13 payments to subrecipients totaling to $383,191 from a population of 101 payments totaling to $1,706,909. There were two payments totaling to $4,015 in which the invoice was not paid within 30 days of receipt of a complete payment request. The compliance sample was expanded and another 11 payments to subrecipients were selected totaling to $176,478. There were an additional two compliance deviations totaling to $24,937. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-006 in the 2022 report. Recommendation: HOST should improve upon its implemented controls to ensure subrecipients who submit complete invoices for payment are paid within 30 days. Improvements should include documenting when complete subrecipient pay requests have been received and the subsequent 30-day deadline. Steps should be taken to reduce the frequency and time associated with budget modifications to ensure payments are made timely. Finally, communication should take place between HOST and the Controller’s Office to expedite payments to subrecipients and prevent unnecessary delays. Views of Responsible Officials: The City agrees with the finding and internal policies have been updated to require finance budget review prior to contract execution to avoid budget modifications during the payment process. HOST is also engaged in an application upgrade that is in the final user acceptance phase to incorporate changes that now include status tracking for vendor invoice submissions and reimbursement payments. For additional information, see the City’s separate report for planned corrective actions.
TESTS AND PROVISIONS- OBLIGATION, EXPENDITURE AND PAYMENT REQUIREMENTS Material Weakness in Internal Control Over Compliance and Material Noncompliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-20-MW-08-0005, E-20-MC-08-0005, E-21-MC-08-0005, E-22-MC-08-0005 Award Year: 2020, 2021, 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR 576.203(c) states – The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient's complete payment request. Condition: HOST did not have adequate controls in place to ensure subrecipients were timely paid after receiving complete payment requests. HOST did not make payments to its subrecipients within 30 days after receiving complete payment requests. Cause: HOST did not have adequate internal controls in place to ensure payments were made timely to subrecipients. All four of the exceptions had to do with pending budget amendments needing to be made prior to payment, which resulted in payment delays. One exception was submitted to the Controller’s Office for payment prior to the 30-day requirement. However, the payment was still made past the deadline. Effect or Potential Effect: HOST is out of compliance with 24 CFR 576.203(c) regarding payments to subrecipients. Questioned Costs: None reported Context: BDO selected a sample of 13 payments to subrecipients totaling to $383,191 from a population of 101 payments totaling to $1,706,909. There were two payments totaling to $4,015 in which the invoice was not paid within 30 days of receipt of a complete payment request. The compliance sample was expanded and another 11 payments to subrecipients were selected totaling to $176,478. There were an additional two compliance deviations totaling to $24,937. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-006 in the 2022 report. Recommendation: HOST should improve upon its implemented controls to ensure subrecipients who submit complete invoices for payment are paid within 30 days. Improvements should include documenting when complete subrecipient pay requests have been received and the subsequent 30-day deadline. Steps should be taken to reduce the frequency and time associated with budget modifications to ensure payments are made timely. Finally, communication should take place between HOST and the Controller’s Office to expedite payments to subrecipients and prevent unnecessary delays. Views of Responsible Officials: The City agrees with the finding and internal policies have been updated to require finance budget review prior to contract execution to avoid budget modifications during the payment process. HOST is also engaged in an application upgrade that is in the final user acceptance phase to incorporate changes that now include status tracking for vendor invoice submissions and reimbursement payments. For additional information, see the City’s separate report for planned corrective actions.
MONITORING Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 93.391 – Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Department of Health and Human Services Award Number: NH75OT0000010 Award Year: 2021 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.332 states- All pass-through entities must ensure that every subaward is clearly identified to the subrecipient and includes the following information at the time of the subaward as follows: (1) Federal award identification, (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports, (4) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (5) Appropriate terms and conditions concerning the closeout of the subaward. Condition: For all four subrecipients tested, subaward agreements did not include the award information required under 2 CFR 200.332. This was a finding carried over from the prior period. There were no new contracts entered into with subrecipients during 2023. Cause: Subaward agreements were not properly written and appropriately reviewed to ensure all required award information was included. Effect or Potential Effect: Denver Department of Public Health and Environment (DDPHE) was not in compliance with subrecipient requirements outlined in 2 CFR Section 200.332. Furthermore, not communicating proper compliance requirements and other information may increase the likelihood of noncompliance on the part of the subrecipient and non-fulfillment of program goals and objectives. In addition, this also increases the risk the subrecipient may not understand they are receiving Federal funds, which could result in subrecipients failing to comply with the Uniform Guidance or pass-through entity requirements for the award. Questioned Costs: Not applicable Context: The control finding was remediated in 2023. However, the control was not present when DDPHE entered into agreements with its subrecipients. These were the same contracts in existence in the prior period. The grant ended on May 31, 2023, and was closed out. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-007 in the 2022 report. Recommendation: DDPHE should revise future subaward agreements to include specific Federal award identification information and language clearly stating applicable audit requirements subrecipients must comply with to ensure all agreements comply with the requirements in 2 CFR Section 200.332. Views of Responsible Officials: This has been remediated. For additional information, see the City’s separate report for planned corrective actions.
SPECIAL TESTS AND PROVISIONS- OBLIGATION, EXPENDITURE AND PAYMENT REQUIREMENTS Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-22-MC-08-0005 Award Year: 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR 576.203(b) states - All of the recipient’s grant must be expended for eligible activity costs within 24 months after HUD signs the grant agreement with the recipient. Condition: Controls in place at the City’s Department of Housing Stability (HOST) were not effective in preventing expenditures from being incurred outside of the 24-month requirement. There was one instance where the existence of a control failed to prevent grant charges being made to the grant outside of the 24-month period. Cause: Personnel reviewing expenditures did not adequately review to ensure expenditures for the Emergency Solutions Grant Program were incurred within the 24-month period. Effect or Potential Effect: Funds were expended outside of the 24-month time limit outlined per 24 CFR section 576.203(b). Questioned Costs: $2,427 Context: BDO selected a sample of seven expenditures totaling to $74,735 from a population of 19 expenditures totaling to $128,803. There was one expenditure in the amount of $2,427 that was incurred outside of the 24-month period. The compliance sample was expanded, and another three expenditures were selected totaling to $17,060. There were no additional compliance deviations noted. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: N/A Recommendation: HOST should improve existing review controls to ensure Emergency Solutions Grant Program annual grants expiring are monitored to ensure expenditures are not charged to grants outside of the 24-month period. Grants should be monitored, and prior to grant expiration, special instructions should be distributed to personnel reviewing expenses informing them of the grant cutoff and items potentially charged outside of the period of performance. Views of Responsible Officials: The City agrees with the finding. The Division of Operations and Impact has established policies and procedures that seek to ensure internal controls are in place to ensure that eligible expenditures are within a grant’s period of performance. For additional information, see the City’s separate report for planned corrective actions.
SPECIAL TESTS AND PROVISIONS- OBLIGATION, EXPENDITURE AND PAYMENT REQUIREMENTS Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-22-MC-08-0005 Award Year: 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR 576.203(b) states - All of the recipient’s grant must be expended for eligible activity costs within 24 months after HUD signs the grant agreement with the recipient. Condition: Controls in place at the City’s Department of Housing Stability (HOST) were not effective in preventing expenditures from being incurred outside of the 24-month requirement. There was one instance where the existence of a control failed to prevent grant charges being made to the grant outside of the 24-month period. Cause: Personnel reviewing expenditures did not adequately review to ensure expenditures for the Emergency Solutions Grant Program were incurred within the 24-month period. Effect or Potential Effect: Funds were expended outside of the 24-month time limit outlined per 24 CFR section 576.203(b). Questioned Costs: $2,427 Context: BDO selected a sample of seven expenditures totaling to $74,735 from a population of 19 expenditures totaling to $128,803. There was one expenditure in the amount of $2,427 that was incurred outside of the 24-month period. The compliance sample was expanded, and another three expenditures were selected totaling to $17,060. There were no additional compliance deviations noted. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: N/A Recommendation: HOST should improve existing review controls to ensure Emergency Solutions Grant Program annual grants expiring are monitored to ensure expenditures are not charged to grants outside of the 24-month period. Grants should be monitored, and prior to grant expiration, special instructions should be distributed to personnel reviewing expenses informing them of the grant cutoff and items potentially charged outside of the period of performance. Views of Responsible Officials: The City agrees with the finding. The Division of Operations and Impact has established policies and procedures that seek to ensure internal controls are in place to ensure that eligible expenditures are within a grant’s period of performance. For additional information, see the City’s separate report for planned corrective actions.
ACTIVITIES ALLOWED OR UNALLOWED AND ALLOWABLE COSTS/COST PRINCIPLES Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 93.391 – Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Department of Health and Human Services Award Number: NH75OT0000010 Award Year: 2021 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented. Condition: Controls in place at the City’s Department of Public Health and Environment (DDPHE) were not effective in preventing incorrect expenditures from being charged to the grant. There was one instance where the existence of a control failed to detect an error within an invoice selected, which resulted in an overpayment to the subrecipient. Cause: Personnel reviewing expenditures did not adequately review to ensure invoices were correct prior to payment. Effect or Potential Effect: An invoice to a subrecipient was overpaid. Questioned Costs: $431 Context: BDO selected a sample of 20 expenditures totaling to $216,560 from a population of 162 expenditures totaling to $625,782. There was one expenditure in the amount of $4,101 that was overpaid. The compliance sample was expanded, and another 12 expenditures were selected totaling to $29,975. There were no additional compliance deviations noted. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: N/A Recommendation: DDPHE should improve existing review controls to ensure the mathematical accuracy of invoices has been checked, especially with respect to payments to subrecipients. Payroll and other costs reported on the face of the invoice should agree to supporting payroll documentation received. Views of Responsible Officials: The City agrees with the finding. DDPHE will implement additional trainings and is encouraging a standard template in Excel to avoid calculation errors. For additional information, see the City’s separate report for planned corrective actions.
REPORTING Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 21.023 – Emergency Rental Assistance Program Department of the Treasury Award Number: ERAE0436; ERAE0437 Award Year: 2021 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. ERA Reporting Guidance v 3.4 identifies quarterly reports required to be submitted for the Emergency Rental Assistance Program (ERAP). Key line items for these reports are outlined within the Compliance Supplement and include (1) administrative costs ratio, (2) housing stability services ratio, (3) system for prioritizing assistance, and (4) participant households at certain income levels of eligibility. Condition: Controls over reviews of quarterly reports in place at the City’s Department of Housing Stability (HOST) were not effective in detecting an error in expenditures reported on a quarterly report. Cause: The Department’s supervisory and review control was not operating effectively to ensure that all key line items reported in the quarterly reports were properly supported. Effect or Potential Effect: The quarterly report for the fourth quarter contained an error pertaining to total expenditures. Ineffective controls could result in ratios such as the administrative costs and housing stability services to be incorrect. Questioned Costs: Not applicable Context: We tested a sample of three reports from a population of four. We identified exceptions in one of the reports tested. The exception was as follows: ERA2 Quarter 4 Report- Total expenditures reported for the period differed from what was reported on HOST supporting spreadsheets. This difference was between housing stability services expenditures, which were reported as $52,154 as opposed to $40,484, which was a difference of $11,659. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-011 in the 2022 report. Recommendation: Reviews of reports should be more thorough, which will increase the probability that such reporting errors are detected. The reviews can be improved by implementing a reporting checklist, which contains steps outlined in reviewing a report, including determining whether the report is mathematically accurate and agrees to underlying documentation. Underlying documentation should also be reviewed to determine if any errors exist within that documentation that could cause errors within the report. Views of Responsible Officials: The City disagrees with the finding. Review of the ERA2 administration costs did not consider the timing of the static report submission. The report was prior to monthly close/reconciliation, which occurred the following month. For additional information, see the City’s separate report for planned corrective actions.
REPORTING Material Weakness in Internal Control Over Compliance and Noncompliance ALN 93.600 – Head Start Program Administration for Children and Families Award Number: 08CH010552; 08HE000797 Award Year: 2021; 2022; 2023 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Federal Funding Accountability and Transparency Act (FFATA), codified under 2 CFR Part 170, requires recipients of grants or cooperative agreements to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Recipients must report each first-tier subaward or subaward amendment that results in an obligation of $30,000 or more in Federal funds. These actions must be reported in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made. Condition: Testing of FFATA reporting indicated all reports submitted had the incorrect obligation amounts reported. Reports to FSRS were also not submitted timely and in some cases no report was submitted. Cause: Personnel administering the grant had an incorrect understanding of the reporting requirements under FFATA. Effect or Potential Effect: The Federal government is not receiving accurate and up to date information on subawards and changes in subaward obligations made to first-tier subrecipients by the City. Questioned Costs: Not applicable Context: BDO selected a sample of three subrecipients with nine contracts and related amendments totaling to $16,650,842. There were nine instances of noncompliance in which the obligations/modifications totaling $16,650,842 were either not reported or reported incorrectly. There were three instances of noncompliance in which required key data elements for contracts totaling $958,676 were not reported or were reported incorrectly. There were nine instances of noncompliance where the reporting to FSRS was not submitted timely. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: N/A Recommendation: An understanding of FFATA reporting requirements should be obtained through training and continuing education. This will enable more effective controls to be implemented to ensure such reporting requirements are followed. Views of Responsible Officials: The City agrees with the finding. The department is updating internal procedures for reporting for FFATA amounts in the period of obligation rather than when the expense was incurred. For additional information, see the City’s separate report for planned corrective actions.