FINDING 2023-005 Subject: Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: U.S. Department of Treasury Assistance Listing Number: 21.027 Federal Award Number: WW21368901 and FY 2021 Pass-Through Entity: Indiana Finance Authority for WW21368901 and FY 2021 grant was direct Compliance Requirements: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Internal Controls Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR section 200.303 states in part: "The non-Federal entity must use one of the following methods of procurement… (b) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Condition: An effective internal control system was not in place at the Town in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Cause: Management had not established a system of internal control that would have ensured proper procurement procedures are followed. Context: For one procurement, we noted that the Town had one procured contract for $576,092 that met the simplified acquisition threshold and one contract for $35,880 that met the small purchase method threshold. The Town performed adequate procurement steps for the contract that met the simplified acquisition threshold but did not for the contract that met the small purchase method threshold. For the contract that fell under the small purchase method, management had support for one quote and noted that a second quote was obtained verbally. Management’s procurement policy states that three quotes must be obtained, and the contract must be awarded to the lowest bid. Management did not document the basis for purchasing from the vendor that was utilized. Additionally, for the contract that met the simplified acquisition threshold, management did not provide support indicating that the Town verified the vendor was not suspended or debarred. The Town verified that the vendor selected for the small purchase method was not suspended or debarred. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the simplified acquisition procurement method of the Procurement and Suspension and Debarment compliance requirement. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the Town’s management establish controls related to the grant agreement and the simplified acquisition purchase procurement method of the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-005 Subject: Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: U.S. Department of Treasury Assistance Listing Number: 21.027 Federal Award Number: WW21368901 and FY 2021 Pass-Through Entity: Indiana Finance Authority for WW21368901 and FY 2021 grant was direct Compliance Requirements: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Internal Controls Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR section 200.303 states in part: "The non-Federal entity must use one of the following methods of procurement… (b) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Condition: An effective internal control system was not in place at the Town in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Cause: Management had not established a system of internal control that would have ensured proper procurement procedures are followed. Context: For one procurement, we noted that the Town had one procured contract for $576,092 that met the simplified acquisition threshold and one contract for $35,880 that met the small purchase method threshold. The Town performed adequate procurement steps for the contract that met the simplified acquisition threshold but did not for the contract that met the small purchase method threshold. For the contract that fell under the small purchase method, management had support for one quote and noted that a second quote was obtained verbally. Management’s procurement policy states that three quotes must be obtained, and the contract must be awarded to the lowest bid. Management did not document the basis for purchasing from the vendor that was utilized. Additionally, for the contract that met the simplified acquisition threshold, management did not provide support indicating that the Town verified the vendor was not suspended or debarred. The Town verified that the vendor selected for the small purchase method was not suspended or debarred. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the simplified acquisition procurement method of the Procurement and Suspension and Debarment compliance requirement. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the Town’s management establish controls related to the grant agreement and the simplified acquisition purchase procurement method of the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-001; Lack of Written Policies and Procedures Condition: The Organization does not have written policies and procedures in place for the administration and management of federal awards, as required by the Uniform Guidance (2 CFR Part 200). Specifically, the organization lacks documented procedures for financial management, internal controls, allowable costs, procurement, and other key operational areas. Criteria: According to 2 CFR § 200.302(b)(7), non-federal entities must have written procedures to implement the requirements of § 200.305 (Payment) and must maintain written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the federal award. Additionally, 2 CFR § 200.303 requires non-federal entities to establish and maintain effective internal controls, including written policies and procedures, to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: The absence of written policies and procedures appears to be due to a lack of awareness of the specific requirements under the Uniform Guidance, coupled with insufficient resources allocated to the development of these necessary internal controls. Effect: Without written policies and procedures, the Organization is at risk of non-compliance with federal regulations, which could lead to unallowable costs being charged to federal awards, inefficient or improper use of federal funds, and potential disallowance of costs during audits. This deficiency could also reduce the Organization's ability to ensure consistency and accountability in the management of federal funds. Recommendation: The Organization should develop and implement comprehensive written policies and procedures in accordance with the requirements of the Uniform Guidance. These should include, but not be limited to, the following areas: 1. Financial management, including procedures for payments and cash management. 2. Internal controls to ensure compliance with federal requirements. 3. Determination of allowable costs in accordance with federal regulations and the terms and conditions of the award. 4. Procurement standards and conflict of interest policies. 5. Time and effort reporting and compensation. The Organization should also ensure that staff are adequately trained in these policies and procedures to enhance compliance and operational efficiency. Views of Responsible Officials of Auditee: In response to the finding, management and will take action to develop and implement the necessary written policies and procedures by December 31, 2024. Comprehensive training will be provided to all relevant staff to ensure compliance with federal requirements.
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): FY2022 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-006. Condition and Context Recipients are required to quarterly or annually submit 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. INDIANA STATE BOARD OF ACCOUNTS 17 PUTNAM COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The County was classified as a county with a population less than 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds award funds. As such, the County was required to submit an annual P&E report covering the period April 1, 2022 to March 31, 2023, during the audit period. The P&E report due by April 30, 2023, was submitted timely but the report was not accurate and complete. The report did not include any project descriptions, expenditure amounts, or obligation amounts despite the County having made several awards to different entities in support of various activities within the County. Total current period expenditures for the reporting period per the County's ledger were $5,502,689. In addition, there were nine projects, contracts, or awards exceeding $50,000 awarded during the reporting period that were not disclosed in the report. 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). . . ." 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 P&E report was not properly researched and reviewed by the County staff prior to submission. INDIANA STATE BOARD OF ACCOUNTS 18 PUTNAM COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 properly report project descriptions and amounts expended when filing the P&E report during the audit period. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to ensure appropriate reviews, approvals, and oversight are taking place of the work completed by the consultant. We also recommended the development of policies and procedures to ensure the County provides the County Treasury with complete and accurate information for the P&E reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 19
FINDING 2023-004 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): OMB Approval #1505-0271 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 19 FULTON 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 county with a population below 250,000 residents that received an allocation of less than $10 million in State and Local Fiscal Recovery Funds. As such, the P&E report, covering the period from March 3, 2022 to March 31, 2023, was required to be submitted to the Treasury by April 30, 2023. Though the P&E report was prepared by one employee and reviewed by another, the internal control was not effective did not detect and allow corrections of errors prior to submission. The County submitted the P&E report on June 16, 2023, which was 47 days after the due date. Additionally, the report was not mathematically accurate and complete. The key line items of "Total Cumulative Expenditures" and "Current Period Expenditures," as reported on the P&E report, did not agree to the County's ledger. Errors were as follows: The "Total Cumulative Expenditures" line item was understated by $16,071. The "Current Period Expenditures" line item was understated by $21,071. The lack of effective 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 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: INDIANA STATE BOARD OF ACCOUNTS 20 FULTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) ". . . 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 The County did not timely submit the P&E report or verify that the information contained within the report accurately reflected the County's expenditures. The expenditures were understated in the report due to not including all activity for the reporting period. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure that P&E reports are submitted timely and are materially accurate and correct. The reports contained the errors identified in the Condition and Context. In addition, not meeting the reporting requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of federal awards. 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 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 2023-005 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): OMB Approval #1505-0271 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 21 FULTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Procurement - Policy The County had not established a purchasing policy that would reflect applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items; procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured; and did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The County had one vendor that was identified as being less than the simplified acquisition threshold of $150,000 but exceeding the $50,000 micro-purchase threshold. The one vendor was selected for testing. For the one vendor, the County did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment 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 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. Upon inquiring of the County to determine its policies and procedures related to suspension and debarment requirements, the County stated procedures were not in place to ensure vendors were not suspended or debarred prior to entering into covered transactions. One covered transaction paid with SLFRF grant funds was identified during the audit period. The covered transaction totaled $66,000 with $46,752 paid in the audit period. The identified transaction was examined to determine if the County verified the suspension and debarment status of the vendor prior to payment. Upon review, the County had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified, from participation in federal assistance programs or activities at any time during the audit period. INDIANA STATE BOARD OF ACCOUNTS 22 FULTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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). . . ." 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. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity." INDIANA STATE BOARD OF ACCOUNTS 23 FULTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.214 states: "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are de-barred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 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." Part 4 of the Treasury's Compliance and Reporting Guidance states: ". . . recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance . . ." Cause The County participated in a joint project with the City of Rochester (City) in which the City handled the procurement process. However, the County did not request copies of the quotes or bids obtained by the city, nor did the County document a sole source vendor situation. In addition, the County was unable to provide documentation to demonstrate they checked the vendor was not suspended or debarred prior to entering into the contract. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure that services obtained provided full and open competition or the basis of the price. In addition, the County cannot ensure the vendors paid were eligible to participate in federal programs. Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. 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. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 FULTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended the County establish documented procurement procedures consistent with state and local laws for the acquisition of property or services required under a federal award or subaward as outlined in the code of federal regulations. In addition, we recommended the County adhere to the procurement policies and obtain required quotes and bids or adequately document a sole source situation. Finally, we recommended that the County strengthen its system of internal controls to ensure that all vendors 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 any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding Number 2023-001 Internal Controls over Allowable Activities and Costs Criteria: 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The nonFederal” 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 terms and conditions of the Federal award. Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity…; (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: As per the grant agreement and the approved budget, there are no approved costs for occupancy and indirect costs. However, we noted during our testing there were a few expenditures related to the allocation of occupancy and national support (indirect costs) which are not allowed per the grant agreement. Additionally, management is charging salary expenses to the grant based on the estimated percentage on a monthly basis. The allocation methodology currently utilized is not supported with proper time and effort records. Cause: Certain controls related to the oversight of compliance are designed and implemented but are not effectively working. Also, evidence of time and effort is not properly documented. Effect: The lack of effective control over compliance resulted in an instance of noncompliance identified. In addition, not maintaining adequate supporting documentation for personnel cost is a violation of federal regulations which could result in unallowed payroll costs being charged to the federally funded program. Questioned Cost: Total expenditure of $13,960.20 did not comply with the compliance requirements. Context: During our review of 12 expenditures, 4 instances were identified where the costs did not meet the eligibility and allowability compliance requirements. During our review of 29 payroll expense items, we noted that payroll expenses charged to the program were based on estimates instead of actual time and effort.
Finding Number 2023-001 Internal Controls over Allowable Activities and Costs Criteria: 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The nonFederal” 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 terms and conditions of the Federal award. Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity…; (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: As per the grant agreement and the approved budget, there are no approved costs for occupancy and indirect costs. However, we noted during our testing there were a few expenditures related to the allocation of occupancy and national support (indirect costs) which are not allowed per the grant agreement. Additionally, management is charging salary expenses to the grant based on the estimated percentage on a monthly basis. The allocation methodology currently utilized is not supported with proper time and effort records. Cause: Certain controls related to the oversight of compliance are designed and implemented but are not effectively working. Also, evidence of time and effort is not properly documented. Effect: The lack of effective control over compliance resulted in an instance of noncompliance identified. In addition, not maintaining adequate supporting documentation for personnel cost is a violation of federal regulations which could result in unallowed payroll costs being charged to the federally funded program. Questioned Cost: Total expenditure of $13,960.20 did not comply with the compliance requirements. Context: During our review of 12 expenditures, 4 instances were identified where the costs did not meet the eligibility and allowability compliance requirements. During our review of 29 payroll expense items, we noted that payroll expenses charged to the program were based on estimates instead of actual time and effort.
2023-002 - Allowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of federal expenditures, we noted that certain expenses were submitted twice for reimbursement. Cause: Internal controls surrounding the review and submission of reimbursement requests are not properly implemented to detect and correct errors. Effect: The Organization submitted duplicate expenditures in two instances. Questioned Costs: $83,718 Statistical Sampling: Statistical sampling was not used in making sample selections. Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003: Allowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing, we noted that expenses submitted on forms for reimbursement were allocated to the wrong budget category line items and did not agree to the underlying accounting records. Cause: Internal controls surrounding the review and submission of reimbursement requests are not properly implemented to detect and correct errors. Effect: The costs submitted and reimbursed by the grantors did not agree to the budget categories set forth in the grant agreement, therefore the underlying accounting records were not consistent with what was being reported to the grantors. Questioned Costs: N/A Statistical Sampling: Statistical sampling was not used in making sample selections. Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-002 - Allowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of federal expenditures, we noted that certain expenses were submitted twice for reimbursement. Cause: Internal controls surrounding the review and submission of reimbursement requests are not properly implemented to detect and correct errors. Effect: The Organization submitted duplicate expenditures in two instances. Questioned Costs: $83,718 Statistical Sampling: Statistical sampling was not used in making sample selections. Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003: Allowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing, we noted that expenses submitted on forms for reimbursement were allocated to the wrong budget category line items and did not agree to the underlying accounting records. Cause: Internal controls surrounding the review and submission of reimbursement requests are not properly implemented to detect and correct errors. Effect: The costs submitted and reimbursed by the grantors did not agree to the budget categories set forth in the grant agreement, therefore the underlying accounting records were not consistent with what was being reported to the grantors. Questioned Costs: N/A Statistical Sampling: Statistical sampling was not used in making sample selections. Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
FINDING 2023-004 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): FY2021 Pass-Through Entity: Indiana Department of Health Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-005. Condition and Context Recipients are required quarterly or annually to submit 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 are allocated more than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, the P&E quarterly reports were to cover one calendar quarter and must be submitted to the Treasury by the last day of the month following the end of the period covered. The Couty's current policy and procedure for complying with reporting requirements is to have the Director of Operations prepare the P&E reports with assistance from his Administrative Assistant, and then the President of the Board of County Commissioners certifies the reports. The current internal control has been determined to be ineffective since the P&E reports do not agree with the County's financial records. The County submitted four P&E reports during the audit period; however, the errors, as identified below, were noted on all four reports. Quarterly Report: October 1, 2022 to December 31, 2022 Current period expenditures reported 7 projects with errors totaling $77,234. Cumulative expenditures reported 22 projects with errors totaling $3,955,669. Quarterly Report: January 1, 2023 to March 31, 2023 Current period expenditures reported 7 projects with errors totaling $173,169. Cumulative expenditures reported 25 projects with errors totaling $2,633,217. Quarterly Report: April 1, 2023 to June 30, 2023 Current period expenditures reported 2 projects with errors totaling $0, since expenditures were posted to the incorrect project. Cumulative expenditures reported 24 projects with errors totaling $2,372,744. Quarterly Report: July 1, 2023 to September 30, 2023 Current period expenditures reported 3 projects with errors totaling $13,412. Cumulative expenditures reported 26 projects with errors totaling $2,273,749. The lack of effective internal controls and noncompliance were systemic issues throughout the entire 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 use 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, compliance financial data, in accordance with appropriate accounting standards and principles. . . ." Cause The County's oversight process for filing the P&E reports did not detect errors. The errors were the result of including expenditures from the incorrect time periods. 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 report cumulative expenditures and current period expenditures properly when filing the P&E reports during the audit period. 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. In addition, not meeting the SLFRF reporting requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of federal awards. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to provide for a segregation of duties in the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight 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 reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring 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): FY2021 Pass-Through Entity: Indiana Department of Health Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Other Matters Condition and Context The County expended $4,727,927 in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) during the audit period. Of that amount, $939,554 was passed through to two subrecipients. As a pass-through entity, the County was required to identify the award and applicable requirements and monitor the subrecipients. Procedures to monitor its subrecipients included reviewing the quarterly financial and performance reports as required by the County through the Subrecipient Agreements. Both subrecipients submitted quarterly reports for Quarter 2 of 2023, covering the time period from April 1 through June 30. No other quarterly financial and performance reports were submitted to the County during the fiscal year. As part of the monitoring the County performed on the subrecipients in March 2023, it noted the subrecipients had been missing quarterly reports. Despite communications made by the County to obtain the missing quarterly reports, no other quarterly reports were submitted by the subrecipients. The lack of effective 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). . . ." 2 CFR 200.332(d) states in part: "Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing the financial and performance reports required by the pass-through entity. . . ." Cause The County's agreements with the subrecipients included reporting requirements, but no procedures were in place to ensure timely and appropriate reporting occurred. The County's oversight process for monitoring subrecipient financial and performance reporting for the audit period did not include adequate follow-up procedures to ensure that required reports were submitted. Subrecipients did not submit the quarterly reports as requested by the County. 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. The lack of sufficient internal controls resulted in the County only receiving one of the required quarterly financial and performance reports from its subrecipients during the year. 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. In addition, not meeting the SLFRF subrecipient monitoring requirements increases the likelihood that County officials and the public will not have access to transparent and accurate information regarding expenditures of federal awards. 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 subrecipients are submitting their financial and performance reports timely and accurately, so that the County can comply with the Subrecipient Monitoring compliance requirement. 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 - 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): FY 2023 Pass-Through Entity: Indiana State Department of Health Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Procurement The Indiana State Department of Health created the Health Issues and Challenges Grant Program to provide funding to local and statewide service providers and planning organizations through the American Rescue Plan Act. The funds were to be used to prevent or reduce the prevalence of health issues or improve the health and behavioral health of Indiana residents. The City applied for and was awarded the Health Issues and Challenges grant in the amount of $447,112. INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF NEW CASTLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Four vendors fell within the small purchase threshold. Two of the four small purchases were selected for testing. For the two vendors tested, totaling $71,889, the City did not obtain price or rate quotes. The micro-purchase threshold may be increased, but the City did not provide documentation that the threshold had been increased. Documentation detailing the history of procurement, which must include the rationale for the procurement method used, was not available for audit. The lack of internal controls and noncompliance were systemic 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 20 CITY OF NEW CASTLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Part 4 of the Treasury's Compliance and Reporting Guidance states: ". . . recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance . . ." Cause A proper system of internal controls was not designed by management of the City. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City'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 implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, proper procurement procedures were not adhered to for all vendors. 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 City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City establish documented procedures consistent with state and local laws for the acquisition of property or services required under a federal award or subaward as outlined in the code of federal regulations. In additions, we recommended the City adhere to the procurement policies. INDIANA STATE BOARD OF ACCOUNTS 21 CITY OF NEW CASTLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 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): FY 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Suspension and Debarment The City elected to receive the standard revenue loss allowance, allowing them to claim their total COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation from the U.S. Department of the Treasury (Treasury) of $3,870,958 as revenue loss to use for government services. As such, all SLFRF program funds were expended under the revenue loss eligible use category. The 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 adding a clause or condition to the covered transaction with that person. Due to the Treasury's determination that the revenue loss eligible use category does not give rise to subawards and the fact the City did not subgrant any of its SWIF award, the City was only required to comply with suspension and debarment requirements related to covered transactions. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF NEW CASTLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the City in order 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 City divulged that it was unaware of the suspension and debarment requirements related to the SLFRF awards. There were 11 covered transactions that equaled or exceeded $25,000 that were identified. All 11 transactions, totaling $3,696,810, were selected for testing. The City did not verify the vendors' suspension and debarment status prior to payment on any of the covered transactions due to the City 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 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." Part 4 of the Treasury's Compliance and Reporting Guidance states: ". . . recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance . . ." Cause A proper system of internal controls was not designed by management of the City. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF NEW CASTLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure the contractors paid with federal funds are eligible to participate in federal programs. Any program funds the City used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recovery them. Furthermore, 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 City. Questioned Costs There were no questioned costs identified. Recommendation We recommend that the City 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 or debarred from participations in federal programs before 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 2023-005 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): FY 2023 Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context Recipients of State and Local Fiscal Recovery Funds (SLFRF) grants 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 City was classified as a metropolitan city with a population below 250,000 residents that received an allocation of less than $10 million in SLFRF award funds. As such, the initial P&E report covering the period from April 1, 2022 to March 31, 2023, 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. INDIANA STATE BOARD OF ACCOUNTS 24 CITY OF NEW CASTLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The City submitted one P&E report during the audit period; however, there was no documented internal control in place over the report to ensure it was complete and accurate. 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 A proper system of internal controls was not designed by management of the City, to ensure that policies and procedures were in place related to reporting. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City'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 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls and develop policies and procedures over the preparation and review of federal reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development, Department of Health and Human Services Federal Assistance Listing Numbers: 14.241, 93.224 & 93.527 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: 558951, 570094, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development, Department of Health and Human Services Federal Assistance Listing Numbers: 14.241, 93.224 & 93.527 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: 558951, 570094, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development, Department of Health and Human Services Federal Assistance Listing Numbers: 14.241, 93.224 & 93.527 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: 558951, 570094, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development, Department of Health and Human Services Federal Assistance Listing Numbers: 14.241, 93.224 & 93.527 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: 558951, 570094, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development, Department of Health and Human Services Federal Assistance Listing Numbers: 14.241, 93.224 & 93.527 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: 558951, 570094, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development, Department of Health and Human Services Federal Assistance Listing Numbers: 14.241, 93.224 & 93.527 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: 558951, 570094, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development, Department of Health and Human Services Federal Assistance Listing Numbers: 14.241, 93.224 & 93.527 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: 558951, 570094, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development, Department of Health and Human Services Federal Assistance Listing Numbers: 14.241, 93.224 & 93.527 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: 558951, 570094, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 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. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.