ELIGIBILITY Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5MAP and 2305MN5ADM, 2023 Pass-Through Agency: Minnesota Department of Human Services and Meeker-McLeod-Sibley Community Health Services Pass-Through Number: 2305MN5MAP and 2305MN5ADM Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition and Context During eligibility testing, it was noted that casefile review was not performed for quarters one and two. Questioned Costs: Not applicable. The County administers the program, but benefits to participants are paid by the State of Minnesota. Cause: Lack of supervisory review of case files. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005. Recommendation: We recommend the County implement additional procedures to ensure case file reviews are being performed on a regular basis. Views of responsible officials: There is no disagreement with the audit finding.
ELIGIBILITY Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5MAP and 2305MN5ADM, 2023 Pass-Through Agency: Minnesota Department of Human Services and Meeker-McLeod-Sibley Community Health Services Pass-Through Number: 2305MN5MAP and 2305MN5ADM Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition and Context During eligibility testing, it was noted that casefile review was not performed for quarters one and two. Questioned Costs: Not applicable. The County administers the program, but benefits to participants are paid by the State of Minnesota. Cause: Lack of supervisory review of case files. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005. Recommendation: We recommend the County implement additional procedures to ensure case file reviews are being performed on a regular basis. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2023-001 Information on the federal program: Subject: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Procurement and Suspension and Debarment Federal Agency: Department of Treasury Federal Program: COVID 19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): 65851, CY2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Qualified Opinion 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 200.318 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. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders… (h) 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 section 200.320 states in part: (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate:… (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: The City contracted a vendor utilizing federal funds without performing a formal bid process for a project exceeding the simplified acquisition threshold of $150,000 no did the City provide documentation supporting a noncompetitive procurement. There was available history of the procurement process, including a lack of documented City Council approval for the contract. The contract entered into also did not include the required Buy America Build America Provisions. Cause: The City’s management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Also, the City does not have written Procurement Policies that comply with the Federal Uniform Guidance requirements for non-Federal entities. The City’s current policy does not address the following requirements: • Written standards of conduct for employees involved in contracting. • Written standards for solicitations to foster full and open competition. • Micro-purchase threshold of $10,000 (listed at $25k) • No formal written or documented City policy or ordinance regarding the City’s procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Effect: The failure to establish an effective internal control system placed the City at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: During the procurement contract testing, the City was unable to provide any procurement history for a selected vendor contract funded through the Coronavirus State and Local Fiscal Recovery Funds grant. The City had entered into the vendor contract based on previous experience with the vendor. Upon inquiry of the City on their purchasing policies and procedures, it was verify the City does not have procurement policies for purchases that conform to the requirements of the Uniform Guidance. Identification as a repeat finding: See Finding 2022-001 Recommendation: We recommend that management of the City establish a proper system of internal controls and develop and implement procurement policies and procedures that adheres of the procurement requirements for purchases with federal awards as required by the 2 CFR 200 Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Procurement and Suspension and Debarment Federal Agency: Department of Treasury Federal Program: COVID 19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): 65851, CY2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Qualified Opinion 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 200.318 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. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders… (h) 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 section 200.320 states in part: (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate:… (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: The City contracted a vendor utilizing federal funds without performing a formal bid process for a project exceeding the simplified acquisition threshold of $150,000 no did the City provide documentation supporting a noncompetitive procurement. There was available history of the procurement process, including a lack of documented City Council approval for the contract. The contract entered into also did not include the required Buy America Build America Provisions. Cause: The City’s management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Also, the City does not have written Procurement Policies that comply with the Federal Uniform Guidance requirements for non-Federal entities. The City’s current policy does not address the following requirements: • Written standards of conduct for employees involved in contracting. • Written standards for solicitations to foster full and open competition. • Micro-purchase threshold of $10,000 (listed at $25k) • No formal written or documented City policy or ordinance regarding the City’s procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Effect: The failure to establish an effective internal control system placed the City at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: During the procurement contract testing, the City was unable to provide any procurement history for a selected vendor contract funded through the Coronavirus State and Local Fiscal Recovery Funds grant. The City had entered into the vendor contract based on previous experience with the vendor. Upon inquiry of the City on their purchasing policies and procedures, it was verify the City does not have procurement policies for purchases that conform to the requirements of the Uniform Guidance. Identification as a repeat finding: See Finding 2022-001 Recommendation: We recommend that management of the City establish a proper system of internal controls and develop and implement procurement policies and procedures that adheres of the procurement requirements for purchases with federal awards as required by the 2 CFR 200 Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023‐001: Information on the Federal Program: Assistance Listing Number 81.086— Upper Midwest Inter‐Tribal EV Charging Community Network. Compliance Requirement: Allowable Costs and Cost Principles, Activities Allowed or Unallowed Type of Finding: Significant deficiency in internal control over compliance. Criteria: 2 CFR 200.303 of Subpart D, "Post Federal Award Requirements Standards for Financial and Program Management," of the Uniform Guidance requires a nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, including Activities Allowed or Unallowed, Allowable Costs and Cost Principles. Condition: Controls were not operating as designed to ensure that all travel reimbursements and payroll expenditures were reviewed and approved prior to payment. Causes: SDK notes that for the two reimbursement draw down dates selected for testing, pay for one of the three workers in each draw down request lacked proper review and approval of hours allocated to the grant. There was not adequate documentation of hours charged to the grant for the executive director as of the date of audit requests. For one of seven remaining non‐payroll transactions tested for allowability, approval documentation did not exist. Effect or Potential Effect: Unallowable costs or activities could be charged to the grant. Questioned Costs: None Context: There was not sufficient documentation available upon request to support a review and approval process of the Executive Director’s pay allocated to the grant nor for a travel reimbursement. Repeat Finding: No Recommendation: We recommend that a process for board review and approval of the executive director’s hours be implemented and performed on a regular (at least quarterly) basis. We additionally recommend approval be documented for all expenditures prior to charging to a federal grant. Views of Responsible Officials: Agree.
Finding 2023‐002: Information on the Federal Program: Assistance Listing Number 81.086— Upper Midwest Inter‐Tribal EV Charging Community Network. Compliance Requirement: Matching Type of Finding: Significant deficiency in internal control over compliance. Criteria: 2 CFR 200.303 of Subpart D, "Post Federal Award Requirements Standards for Financial and Program Management," of the Uniform Guidance requires a nonfederal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, including Cost Match principles. Condition: Controls were not implemented to monitor cost match partners’ activities to ensure their expenditures comply with allowable cost activities. Causes: For one of three cost matching amounts recorded in 2023, detail of amounts reported as cost match was not available upon request by auditors, and therefore the detail had not been obtained by the Organization. Effect or Potential Effect: Unallowable costs or activities could be counted for cost match by match partners causing Native Sun to fall short of cost match requirements. Questioned Costs: None Context: The Organization did not initially have documentation with sufficient detail for $756,108 of expenses reported by a cost match partner during 2023. Repeat Finding: No Recommendation: We recommend a control be implemented to monitor cost match partners including obtaining, reviewing and retaining support for reported cost match amounts. Views of Responsible Officials: Agree.
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness) Federal Programs: All programs Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed. Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities. Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements. Questioned Costs: Questioned costs totaling $29,598 are comprised of the following: • $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics) • $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice) • $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs)) Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. Anticipated Completion Date: December 1, 2024 Responsible Official: Michael Brosnan, Chief Financial Officer
Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Association must, among other things, “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”. Condition and Context: We noted that a formal tracking and review process did not exist for earmarking of administrative costs relating to ESES-CV-020-0038 and ESRR-CV-020-0014. However, no noncompliance with the earmarking for either award was noted during testing. The Association did not spend funds under the other awards under this assistance listing number which would require tracking, review and approval procedures to be implemented during 2023. Cause and Effect: The lack of adequate documentation to support earmarking for the federal award could have resulted in material noncompliance to the referenced compliance requirement and to the program as a whole. Recommendation: We recommend the Association implement formal tracking, review and approval procedures over earmarking levels for federal awards ESES-CV-020-0038 and ESRR-CV-020-0014. Views of Responsible Officials and Planned Corrective Actions: The Association agrees with the finding and plans to implement their corrective action during October 2024.
Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Association must, among other things, “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”. Condition and Context: We noted a formal review and approval process did not exist for monthly payment vouchers submitted to The Department of Housing and Urban Development (HUD) under federal awards IN0193L5H022105 and IN0193L5H022206. However, no noncompliance with the period of performance for either award was noted in items selected for testing. An appropriately designed formal review and approval process was implemented and operating effectively for the Association's other awards under this assistance listing number. Cause and Effect: The deficiency noted above could result in inaccurate claims being submitted under federal awards IN0193L5H022105 and IN0193L5H022206. Recommendation: We recommend the Association implement a formal review and approval process over monthly payment vouchers submitted to HUD for federal awards IN0193L5H022105 and IN0193L5H022206 similar to the processes and procedures implemented for the other awards under this assistance listing number. Views of Responsible Officials and Planned Corrective Actions: The Association agrees with the finding and plans to implement their corrective action during October 2024.
Finding 2023–001: Reporting – Recordkeeping Federal Department: U.S. Department of Agriculture Federal Award Identification Numbers and Year: 23N1199 and 2023 Pass-through Agency: Illinois State Board of Education (ISBE) Child Nutrition Cluster: Summer Food Service Program for Children (SFSPC), Federal Assistance Listing Number 10.559 Criteria Federal regulations (7 CFR 225.15(d)) state (1) each sponsor shall hold Program training sessions for its administrative and site personnel and shall allow no site to operate until personnel have attended at least one of these training sessions. Each site shall have present at each meal service at least one person who has received this training. (2) Sponsors shall visit each of their sites at least once during the first week of operation under the Program and shall promptly take such actions as are necessary to correct any deficiencies. (3) Sponsors shall review food service operations at each site at least once during the first four weeks of Program operations, and thereafter shall maintain a reasonable level of site monitoring. Sponsors shall complete a monitoring form developed by the State agency during the conduct of these reviews. The United States Department of Agriculture, Food and Nutrition Service, The Summer Food Service Program (SFSP), 2016 Administration Guide, Chapter 7, Staff Duties and Training, states “It is critical that site personnel and monitors understand the importance of accurate point of service meal counts. Only complete meals served to eligible children can be claimed for reimbursement. Therefore, meals must be counted at the actual point of service (i.e., meals are counted as they are served, to ensure that an accurate count of meals served is obtained and reported). Counting meals at the point of service also allows site personnel to ensure that only complete meals are served.” Also, Chapter 10, Recordkeeping, states sponsors must be able to document that they have met their monitoring requirements. Monitors must submit a report for pre-operational site visits, site visits during the first week of program operations, and site visits throughout the summer. Chicago Park District’s (the District) Summer Food Program 2018 Monitor’s Orientation Handbook requires monitors checking site operations to make sure that the site maintains adequate records and that the program is operating in accordance with the requirement. To comply with this requirement, the District utilizes a monitoring checklist that is attached to each site file. The checklist requires documentation of ISBE approved application, ISBE participation detail, the District application, field trip data, authorized signature form, authorized signature form, training sign-in sheets, certificate of training, park enrollment roster and site responsibilities. Per the District’s Summer Food Program Management manual, the District replaced a series of paper forms with two online forms: Summer Food Weekly Summary and Summer Food Program Daily Timesheets. However, two paper documents will continue to exist, the daily receipts and the state mandated Daily Meal Count Form. 2 CFR Part 200, Subpart D – Post Federal Awards Requirements, Section 200.303 Internal controls states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. Condition During the current audit period, the District did not adequately document its compliance with the special tests and provisions requirements of the SFSPC. This included maintaining adequate controls over required monitoring and meal count forms to ensure forms were properly completed and approved by authorized personnel. Cause Per our discussions with management, the Summer Food Service Program was administered across 193 sites on a daily basis during the summer months. Specifically, in 2023, the program and the corrective actions planned were interrupted and significantly impacted due to a shortage of staff as positions were not filled successfully. Effect Failure to maintain supporting documentation of the required monitoring and meal count forms and ensure that the forms are properly completed and approved by authorized personnel is a violation of the program’s requirements and impairs the District’s ability to adequately monitor the federally funded program. This could also result in questioned and disallowed costs, which the District may need to reimburse to its grantor agency. Questioned Costs None. Context During our testing of monitoring at 25 sites (total sites operated under the program during 2023 was 195 sites), we noted the following: For four sites (16%), the monitoring site review form was not properly completed. The form was either missing the monitor departure time or monitor departed early (five minutes after the start of the approved mealtime). For two sites (8%), we were unable to properly identify who signed the site visit or the monitoring site review forms because of illegible signatures, without some assistance from the District’s personnel. For the 25 sites sampled, we tested a total of 10 days (July 17 through July 21 and through July 24 through July 28) from a population of 29 days (calculated based on the number of days meals were claimed for reimbursements during the program) to verify that the delivery ticket, daily meal count form, and the Summer Food Weekly Summary form were properly completed and reviewed by authorized personnel. We noted the following: For two (2) sites (8%), the delivery receipt form either was missing the signature or was not signed. Five sites (20%) over-claimed the number of meals served by $737. Three of these sites over-claimed 23 lunches and nine snacks served as part of its monthly claim reimbursement. For the remaining two sites, we noted the District was reimbursed for a total of 165 lunches instead of 165 snacks as reported per the daily meal count forms, which represented $615 of the total amount over-claimed. These amounts did not agree with the number of meals reported on the daily meal count forms. Two sites (8%) under-claimed the number of meals served by $119. The site under-claimed 21 lunches and 15 snacks served as part of its monthly claim reimbursement. These amounts did not agree with the number of meals reported on the daily meal count forms. For two sites (8%), we were unable to properly identify who signed the delivery ticket and/or daily meal count forms due to illegible signature, without some assistance from the District’s personnel. In addition, per our discussions with program personnel, we noted the District’s current practice is to follow ISBE’s regulations regarding site visits and reviews by completing the first week visit and reasonable monitoring as defined by completing at least two monitoring site reviews form during the program’s operation. However, we noted that the current policy manual does not include this practice nor define instances whereby more than two reviews would be completed. Identification of Repeated Findings Repeated (Prior Finding No. 2022-001). Recommendation We recommend the District continue to implement internal controls to improve compliance with federal regulations over the SFSP. In addition, we recommend the District ensure adequate staff resources and training are in place to ensure accurate reporting of all meals served, as well as all required forms are properly completed. Also, we suggest the District update its policy manual to define “reasonable monitoring” of the SFSP program, including any deviations from its current practice of completing at least two monitoring site reviews forms. Lastly, we suggest the District update its required forms (daily meal count, site visit/monitoring site review) to have authorized personnel include a printed signature, which will assist in easily identifying and verifying that the person is authorized to sign the form(s). Views of Responsible Officials and Planned Corrective Action The District agrees with the finding and recommendation. The District’s corrective action plan is on page 15.
Criteria: 2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award: • Understand and comply with the federal statutes, regulations, and terms and conditions of the award; • Evaluate and monitor compliance; • Take prompt action when instances of noncompliance is identified. 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). Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas: 1. Cash Management 2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. 2. Allowability of Costs 2 CFR 200.302(b)(7) states that the financial management system of each non-Federal entity must provide for the 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. 3. Conflict of Interest 2 CFR 200.318(c)(1) states that the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the non-Federal entity may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. However, non-Federal entities may set standards for situations in which the financial interest is not substantial, or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the non-Federal entity. In addition, the organizations should ensure that existing written procedures are in compliance with: a. Equipment Management Requirements 2 CFR 200.313(b) states that “A state must use, manage and dispose of equipment acquired under a Federal award by the state in accordance with state laws and procedures b. General Procurement Standards 2 CFR 200.317 to 200.326 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services. Condition The Foundation does not have documented policies and procedures concerning the following key compliances areas which are required by the Uniform Guidance: • Cash Management • Allowability of Cost • Conflict of Interest • Equipment and Real Property Management • Procurement, Suspension & Debarment Cause This is attributed to the insufficient resources or staffing to develop and formalize the policies and procedures. Effect The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization. Questioned Costs None Recommendation The Foundation should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed. Views of Responsible Officials and Planned Corrective Action We understand how crucial it is to have strong policies and procedures in place. Here’s how we plan to move forward: 1. Review of Existing Policies and Procedures: We’re currently taking a close look at our existing policies and procedures to ensure they align with the Uniform Guidance. This will help us identify any gaps and make necessary updates so that we’re fully compliant. 2. Development of New Policies: Alongside this review, we will create clear and comprehensive written policies in key areas, such as: • Cash Management: Setting up procedures that comply with 2 CFR 200.305 to ensure timely payments. eCFR :: 2 CFR 200.305 -- Federal payment. • Allowability of Costs: Crafting guidelines that follow Subpart E—Cost Principles, so we can confidently determine which expenses are allowable. https://www.ecfr.gov/current/title-48/chapter-7/subchapter-E/part-731/subpart-731.7/section-731.770. • Conflict of Interest: Establishing standards of conduct that address potential conflicts and promote transparency. • Equipment and Real Property Management: Developing policies for managing equipment acquired under federal awards in line with 2 CFR 200.313(b). eCFR :: 2 CFR 200.313 -- Equipment. • Procurement Procedures: Creating clear procurement guidelines that align with 2 CFR 200.318 through 200.326 to ensure fairness and oversight. eCFR :: 2 CFR 200.318 -- General procurement standards. 3. Training and Communication: The Finance Department will be responsible for training all staff involved in managing federal awards. Training sessions will ensure that everyone understands the requirements and their roles in maintaining compliance. This training will be completed by December 31, 2024. Personnel responsible: Eduardo Cedeno, Director of Finance Anticipated completion date: December 31, 2024
Finding 2023-005: Cash Management and Reporting (Significant Deficiency) Information on the Federal Programs: Both Major Programs Criteria or Specific Requirement: 2 CFR Section 200.303 requires auditees to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: FCE did not maintain documentary evidence of the review and approval of either its requests for cash draw downs or its performance reports in accordance with the internal control requirements for the first three quarters in 2023. However, internal controls were implemented during the fourth quarter of 2023 and no issues were noted with approvals in the fourth quarter. In addition, the requests for cash draw downs were not submitted in a timely manner during the year ended December 31, 2023. Cause: Until the fourth quarter of 2023, the review and approval was performed verbally and was not documented. As a result, FCE was not able to provide adequate support to document the review and approval of either its requests for cash draw downs or its performance reports for the first three quarters of 2023. In addition, as FCE was experiencing transition in the finance team, the requests for cash draw downs were not submitted in a timely manner. Effect or Potential Effect: FCE was not able to provide evidence of the implementation of internal controls related to review and approval for cash draw downs and performance reports for the first three quarters of 2023 and FCE did not timely submit its requests for cash draw downs. Questioned Costs: None. Repeat Finding: See Finding 2022-005. Recommendation: FCE should retain documentary evidence of its review and approval process, which should occur prior to submission of the requests for cash draw downs and performance reports. FCE should endeavor to timely submit its requests for cash draw downs.
Finding 2023-005: Cash Management and Reporting (Significant Deficiency) Information on the Federal Programs: Both Major Programs Criteria or Specific Requirement: 2 CFR Section 200.303 requires auditees to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: FCE did not maintain documentary evidence of the review and approval of either its requests for cash draw downs or its performance reports in accordance with the internal control requirements for the first three quarters in 2023. However, internal controls were implemented during the fourth quarter of 2023 and no issues were noted with approvals in the fourth quarter. In addition, the requests for cash draw downs were not submitted in a timely manner during the year ended December 31, 2023. Cause: Until the fourth quarter of 2023, the review and approval was performed verbally and was not documented. As a result, FCE was not able to provide adequate support to document the review and approval of either its requests for cash draw downs or its performance reports for the first three quarters of 2023. In addition, as FCE was experiencing transition in the finance team, the requests for cash draw downs were not submitted in a timely manner. Effect or Potential Effect: FCE was not able to provide evidence of the implementation of internal controls related to review and approval for cash draw downs and performance reports for the first three quarters of 2023 and FCE did not timely submit its requests for cash draw downs. Questioned Costs: None. Repeat Finding: See Finding 2022-005. Recommendation: FCE should retain documentary evidence of its review and approval process, which should occur prior to submission of the requests for cash draw downs and performance reports. FCE should endeavor to timely submit its requests for cash draw downs.
Finding 2023-001: Failure to Maintain Proper Documentation of Time and Effort Reporting Condition Found: Carle did not have proper documentation of time and effort relating to personnel costs charged to the program. In testing of 40 selected payroll costs, Carle was unable to provide physical documentation of timesheets or other effort tracking for 16 samples to support the amounts allocated by percentage to the Illinois SOR2 award. Though Carle was able to provide rationale for the amounts allocated, including estimated time spent on the award, allocations do not meet standards for documentation of personnel expenses. Criteria or Requirement: 2 CFR 200.430(i) requires charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to Federal awards. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure time charged to federal grants is appropriately tracked and certified. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. This was the first grant for the department and while internal controls were in place, it is clear they were not sufficient. Possible Asserted Effect: Failure to maintain appropriate documentation of personnel costs may lead to questioned costs or inaccurate reporting of federal expenditures. Repeat Finding: A similar finding was reported in the prior year audit (2022-001). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its process for preparing and reviewing time tracking for federal awards and implement the procedures necessary to ensure documentation of personnel costs are complete and accurate. Views of Carle management: There is an understanding of this repeated finding, and a need for corrective action. Actions were taken in September 2023 when the finding was initially noted to improve internal controls and ensure compliance in maintaining proper documentation for time and effort reporting under federal awards.
Finding 2023-001: Failure to Maintain Proper Documentation of Time and Effort Reporting Condition Found: Carle did not have proper documentation of time and effort relating to personnel costs charged to the program. In testing of 40 selected payroll costs, Carle was unable to provide physical documentation of timesheets or other effort tracking for 16 samples to support the amounts allocated by percentage to the Illinois SOR2 award. Though Carle was able to provide rationale for the amounts allocated, including estimated time spent on the award, allocations do not meet standards for documentation of personnel expenses. Criteria or Requirement: 2 CFR 200.430(i) requires charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to Federal awards. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure time charged to federal grants is appropriately tracked and certified. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. This was the first grant for the department and while internal controls were in place, it is clear they were not sufficient. Possible Asserted Effect: Failure to maintain appropriate documentation of personnel costs may lead to questioned costs or inaccurate reporting of federal expenditures. Repeat Finding: A similar finding was reported in the prior year audit (2022-001). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its process for preparing and reviewing time tracking for federal awards and implement the procedures necessary to ensure documentation of personnel costs are complete and accurate. Views of Carle management: There is an understanding of this repeated finding, and a need for corrective action. Actions were taken in September 2023 when the finding was initially noted to improve internal controls and ensure compliance in maintaining proper documentation for time and effort reporting under federal awards.
Finding 2023-001: Failure to Maintain Proper Documentation of Time and Effort Reporting Condition Found: Carle did not have proper documentation of time and effort relating to personnel costs charged to the program. In testing of 40 selected payroll costs, Carle was unable to provide physical documentation of timesheets or other effort tracking for 16 samples to support the amounts allocated by percentage to the Illinois SOR2 award. Though Carle was able to provide rationale for the amounts allocated, including estimated time spent on the award, allocations do not meet standards for documentation of personnel expenses. Criteria or Requirement: 2 CFR 200.430(i) requires charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to Federal awards. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure time charged to federal grants is appropriately tracked and certified. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. This was the first grant for the department and while internal controls were in place, it is clear they were not sufficient. Possible Asserted Effect: Failure to maintain appropriate documentation of personnel costs may lead to questioned costs or inaccurate reporting of federal expenditures. Repeat Finding: A similar finding was reported in the prior year audit (2022-001). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its process for preparing and reviewing time tracking for federal awards and implement the procedures necessary to ensure documentation of personnel costs are complete and accurate. Views of Carle management: There is an understanding of this repeated finding, and a need for corrective action. Actions were taken in September 2023 when the finding was initially noted to improve internal controls and ensure compliance in maintaining proper documentation for time and effort reporting under federal awards.
Finding 2023-001: Failure to Maintain Proper Documentation of Time and Effort Reporting Condition Found: Carle did not have proper documentation of time and effort relating to personnel costs charged to the program. In testing of 40 selected payroll costs, Carle was unable to provide physical documentation of timesheets or other effort tracking for 16 samples to support the amounts allocated by percentage to the Illinois SOR2 award. Though Carle was able to provide rationale for the amounts allocated, including estimated time spent on the award, allocations do not meet standards for documentation of personnel expenses. Criteria or Requirement: 2 CFR 200.430(i) requires charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to Federal awards. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure time charged to federal grants is appropriately tracked and certified. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. This was the first grant for the department and while internal controls were in place, it is clear they were not sufficient. Possible Asserted Effect: Failure to maintain appropriate documentation of personnel costs may lead to questioned costs or inaccurate reporting of federal expenditures. Repeat Finding: A similar finding was reported in the prior year audit (2022-001). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its process for preparing and reviewing time tracking for federal awards and implement the procedures necessary to ensure documentation of personnel costs are complete and accurate. Views of Carle management: There is an understanding of this repeated finding, and a need for corrective action. Actions were taken in September 2023 when the finding was initially noted to improve internal controls and ensure compliance in maintaining proper documentation for time and effort reporting under federal awards.
Finding 2023-002: Failure to Notify Subrecipients of Federal Funding Condition Found: Carle did not communicate required federal program information to subrecipients the Illinois SOR2 program. During our testing of 2 subrecipient awards, we noted the subaward document did not include most of the required elements, including but not limited to: FAIN, ALN number and title, name of the federal awarding agency, UEI, indirect cost rate, Single Audit requirements, and a suspension and debarment clause. Amounts passed through to subrecipients under the SOR2 program totaled $201,863 during the year ended December 31, 2023. Criteria or Requirement: Per 2 CFR 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed at 2 CFR 200.332 (1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include implementing risk assessment procedures required by Uniform Guidance and ensuring monitoring procedures are performed and documented in accordance with established policies and procedures. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. The templates used for subawards was not reflective of the required communications. Possible Asserted Effect: Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly prepare their schedule of expenditures of federal awards. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its subaward documents for federal awards and ensure that they include all required elements. Views of Carle management: Management agrees with the finding. Ann Campen had conversations with all the sub-awardees and provided them with the information required. Staff will email the sub-awardees with an “addendum” by the end of calendar year 2024.
Finding 2023-002: Failure to Notify Subrecipients of Federal Funding Condition Found: Carle did not communicate required federal program information to subrecipients the Illinois SOR2 program. During our testing of 2 subrecipient awards, we noted the subaward document did not include most of the required elements, including but not limited to: FAIN, ALN number and title, name of the federal awarding agency, UEI, indirect cost rate, Single Audit requirements, and a suspension and debarment clause. Amounts passed through to subrecipients under the SOR2 program totaled $201,863 during the year ended December 31, 2023. Criteria or Requirement: Per 2 CFR 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed at 2 CFR 200.332 (1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include implementing risk assessment procedures required by Uniform Guidance and ensuring monitoring procedures are performed and documented in accordance with established policies and procedures. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. The templates used for subawards was not reflective of the required communications. Possible Asserted Effect: Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly prepare their schedule of expenditures of federal awards. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its subaward documents for federal awards and ensure that they include all required elements. Views of Carle management: Management agrees with the finding. Ann Campen had conversations with all the sub-awardees and provided them with the information required. Staff will email the sub-awardees with an “addendum” by the end of calendar year 2024.
Finding 2023-002: Failure to Notify Subrecipients of Federal Funding Condition Found: Carle did not communicate required federal program information to subrecipients the Illinois SOR2 program. During our testing of 2 subrecipient awards, we noted the subaward document did not include most of the required elements, including but not limited to: FAIN, ALN number and title, name of the federal awarding agency, UEI, indirect cost rate, Single Audit requirements, and a suspension and debarment clause. Amounts passed through to subrecipients under the SOR2 program totaled $201,863 during the year ended December 31, 2023. Criteria or Requirement: Per 2 CFR 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed at 2 CFR 200.332 (1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include implementing risk assessment procedures required by Uniform Guidance and ensuring monitoring procedures are performed and documented in accordance with established policies and procedures. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. The templates used for subawards was not reflective of the required communications. Possible Asserted Effect: Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly prepare their schedule of expenditures of federal awards. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its subaward documents for federal awards and ensure that they include all required elements. Views of Carle management: Management agrees with the finding. Ann Campen had conversations with all the sub-awardees and provided them with the information required. Staff will email the sub-awardees with an “addendum” by the end of calendar year 2024.
Finding 2023-002: Failure to Notify Subrecipients of Federal Funding Condition Found: Carle did not communicate required federal program information to subrecipients the Illinois SOR2 program. During our testing of 2 subrecipient awards, we noted the subaward document did not include most of the required elements, including but not limited to: FAIN, ALN number and title, name of the federal awarding agency, UEI, indirect cost rate, Single Audit requirements, and a suspension and debarment clause. Amounts passed through to subrecipients under the SOR2 program totaled $201,863 during the year ended December 31, 2023. Criteria or Requirement: Per 2 CFR 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed at 2 CFR 200.332 (1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include implementing risk assessment procedures required by Uniform Guidance and ensuring monitoring procedures are performed and documented in accordance with established policies and procedures. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. The templates used for subawards was not reflective of the required communications. Possible Asserted Effect: Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly prepare their schedule of expenditures of federal awards. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its subaward documents for federal awards and ensure that they include all required elements. Views of Carle management: Management agrees with the finding. Ann Campen had conversations with all the sub-awardees and provided them with the information required. Staff will email the sub-awardees with an “addendum” by the end of calendar year 2024.
Finding 2023-003: Over-awarding of subsidized Direct Loans Condition Found Methodist College (Carle) awarded and disbursed subsidized loans in excess of aggregate loan limits for the 2022 to 2023 aid year. In our testing of 40 samples, one student was awarded an aggregate of $24,500 for subsidized loans which exceeded the $23,000 limit for subsidized loans. Further, we noted that the review control over student aid packaging was not operating effectively in the period. The College disbursed FDL loans to 292 students and Pell grants to 193 students during the year ended December 31, 2023 for which eligibility and disbursement requirements applied. The number of undergraduate students enrolled in the College during fiscal year 2023 was 528. Criteria Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan program prior to 2010) are $57,500 for independent undergraduate students (and for dependent students whose parents are unable to borrow Direct PLUS Loans, not more than $23,000 of which may be subsidized. In addition, 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. Effective internal controls should include establishing procedures to ensure student aid awarded are within the limits set by USDE. Cause When reviewing files the FAFSA for this student showed a Sub award total of $19,000. Her original loan was disbursed for $2750. It seems likely that this students ISIR was looked at with the $19,000 SUB and awarded incorrectly based on the $19,000 figure. Possible Asserted Effect Inappropriate awarding of aid are considered questioned costs and may lead to penalties, repayments, and other corrective actions. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling No sampling was performed. Recommendation We recommend the College review its procedures to ensure appropriate student aid packaging to ensure amounts do not exceed subsidized limitation guidelines. Views of Carle management: Methodist College agrees with the finding of an over award for the one student in question. Corrective Action Plan: In standing financial aid meetings, we will review Federal Loan limits and what our process/procedures are if a student is close to limits to insure, we don’t over award. Contact Person(s): Justina Kirchgessner Anticipated Completion Date:2024
Finding 2023-003: Over-awarding of subsidized Direct Loans Condition Found Methodist College (Carle) awarded and disbursed subsidized loans in excess of aggregate loan limits for the 2022 to 2023 aid year. In our testing of 40 samples, one student was awarded an aggregate of $24,500 for subsidized loans which exceeded the $23,000 limit for subsidized loans. Further, we noted that the review control over student aid packaging was not operating effectively in the period. The College disbursed FDL loans to 292 students and Pell grants to 193 students during the year ended December 31, 2023 for which eligibility and disbursement requirements applied. The number of undergraduate students enrolled in the College during fiscal year 2023 was 528. Criteria Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan program prior to 2010) are $57,500 for independent undergraduate students (and for dependent students whose parents are unable to borrow Direct PLUS Loans, not more than $23,000 of which may be subsidized. In addition, 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. Effective internal controls should include establishing procedures to ensure student aid awarded are within the limits set by USDE. Cause When reviewing files the FAFSA for this student showed a Sub award total of $19,000. Her original loan was disbursed for $2750. It seems likely that this students ISIR was looked at with the $19,000 SUB and awarded incorrectly based on the $19,000 figure. Possible Asserted Effect Inappropriate awarding of aid are considered questioned costs and may lead to penalties, repayments, and other corrective actions. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling No sampling was performed. Recommendation We recommend the College review its procedures to ensure appropriate student aid packaging to ensure amounts do not exceed subsidized limitation guidelines. Views of Carle management: Methodist College agrees with the finding of an over award for the one student in question. Corrective Action Plan: In standing financial aid meetings, we will review Federal Loan limits and what our process/procedures are if a student is close to limits to insure, we don’t over award. Contact Person(s): Justina Kirchgessner Anticipated Completion Date:2024
Finding 2023-003: Over-awarding of subsidized Direct Loans Condition Found Methodist College (Carle) awarded and disbursed subsidized loans in excess of aggregate loan limits for the 2022 to 2023 aid year. In our testing of 40 samples, one student was awarded an aggregate of $24,500 for subsidized loans which exceeded the $23,000 limit for subsidized loans. Further, we noted that the review control over student aid packaging was not operating effectively in the period. The College disbursed FDL loans to 292 students and Pell grants to 193 students during the year ended December 31, 2023 for which eligibility and disbursement requirements applied. The number of undergraduate students enrolled in the College during fiscal year 2023 was 528. Criteria Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan program prior to 2010) are $57,500 for independent undergraduate students (and for dependent students whose parents are unable to borrow Direct PLUS Loans, not more than $23,000 of which may be subsidized. In addition, 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. Effective internal controls should include establishing procedures to ensure student aid awarded are within the limits set by USDE. Cause When reviewing files the FAFSA for this student showed a Sub award total of $19,000. Her original loan was disbursed for $2750. It seems likely that this students ISIR was looked at with the $19,000 SUB and awarded incorrectly based on the $19,000 figure. Possible Asserted Effect Inappropriate awarding of aid are considered questioned costs and may lead to penalties, repayments, and other corrective actions. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling No sampling was performed. Recommendation We recommend the College review its procedures to ensure appropriate student aid packaging to ensure amounts do not exceed subsidized limitation guidelines. Views of Carle management: Methodist College agrees with the finding of an over award for the one student in question. Corrective Action Plan: In standing financial aid meetings, we will review Federal Loan limits and what our process/procedures are if a student is close to limits to insure, we don’t over award. Contact Person(s): Justina Kirchgessner Anticipated Completion Date:2024
Finding 2023-003: Over-awarding of subsidized Direct Loans Condition Found Methodist College (Carle) awarded and disbursed subsidized loans in excess of aggregate loan limits for the 2022 to 2023 aid year. In our testing of 40 samples, one student was awarded an aggregate of $24,500 for subsidized loans which exceeded the $23,000 limit for subsidized loans. Further, we noted that the review control over student aid packaging was not operating effectively in the period. The College disbursed FDL loans to 292 students and Pell grants to 193 students during the year ended December 31, 2023 for which eligibility and disbursement requirements applied. The number of undergraduate students enrolled in the College during fiscal year 2023 was 528. Criteria Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan program prior to 2010) are $57,500 for independent undergraduate students (and for dependent students whose parents are unable to borrow Direct PLUS Loans, not more than $23,000 of which may be subsidized. In addition, 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. Effective internal controls should include establishing procedures to ensure student aid awarded are within the limits set by USDE. Cause When reviewing files the FAFSA for this student showed a Sub award total of $19,000. Her original loan was disbursed for $2750. It seems likely that this students ISIR was looked at with the $19,000 SUB and awarded incorrectly based on the $19,000 figure. Possible Asserted Effect Inappropriate awarding of aid are considered questioned costs and may lead to penalties, repayments, and other corrective actions. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling No sampling was performed. Recommendation We recommend the College review its procedures to ensure appropriate student aid packaging to ensure amounts do not exceed subsidized limitation guidelines. Views of Carle management: Methodist College agrees with the finding of an over award for the one student in question. Corrective Action Plan: In standing financial aid meetings, we will review Federal Loan limits and what our process/procedures are if a student is close to limits to insure, we don’t over award. Contact Person(s): Justina Kirchgessner Anticipated Completion Date:2024
Finding 2023 004: Inaccurate and Untimely Enrollment Reporting Condition Found Methodist College did not accurately and/or timely report student address changes and student enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS). The U.S. Department of Education (USDE) uses enrollment data reported by the College to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in-school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. Additionally, changes in a student’s permanent address are used by USDE to service loans. During our testing of enrollment reporting at the College, we noted that no submissions were made to NSLDS for the period 4/1/2023 to 12/31/2023. Further, we noted review controls were not implemented in the period to ensure enrollment and student data submitted to NSLDS was accurate and sent in accordance with required timeframes. The College disbursed FDL loans to 292 students and Pell grants to 193 students during the year ended December 31, 2023 for which enrollment reporting requirements applied. The number of undergraduate students enrolled in the College during fiscal year 2023 was 528. Criteria According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via NSLDS within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended. In addition, 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. Effective internal controls should include establishing procedures to ensure student campus and program-level enrollment status changes and address changes are accurately and timely reported to the NSLDS. Cause In discussing these conditions with College officials, they stated that NSC was part of a security breach and when they were fixing their processes, Methodist College got incorrectly linked to Methodist University in Fayetteville, NC causing submissions to report incorrectly on our end. Possible Asserted Effect Inaccurate and delayed submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling No sampling was performed. Recommendation We recommend the College review its procedures to ensure timely and accurate reporting of student information and enrollment status information to the NSLDS. Views of Carle management: Methodist College agrees with the finding of inaccurate and delayed submissions and have been working to get everything caught back up now that NSC has fixed their security breach and incorrectly linking us to the wrong college.
Finding 2023 004: Inaccurate and Untimely Enrollment Reporting Condition Found Methodist College did not accurately and/or timely report student address changes and student enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS). The U.S. Department of Education (USDE) uses enrollment data reported by the College to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in-school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. Additionally, changes in a student’s permanent address are used by USDE to service loans. During our testing of enrollment reporting at the College, we noted that no submissions were made to NSLDS for the period 4/1/2023 to 12/31/2023. Further, we noted review controls were not implemented in the period to ensure enrollment and student data submitted to NSLDS was accurate and sent in accordance with required timeframes. The College disbursed FDL loans to 292 students and Pell grants to 193 students during the year ended December 31, 2023 for which enrollment reporting requirements applied. The number of undergraduate students enrolled in the College during fiscal year 2023 was 528. Criteria According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via NSLDS within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended. In addition, 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. Effective internal controls should include establishing procedures to ensure student campus and program-level enrollment status changes and address changes are accurately and timely reported to the NSLDS. Cause In discussing these conditions with College officials, they stated that NSC was part of a security breach and when they were fixing their processes, Methodist College got incorrectly linked to Methodist University in Fayetteville, NC causing submissions to report incorrectly on our end. Possible Asserted Effect Inaccurate and delayed submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling No sampling was performed. Recommendation We recommend the College review its procedures to ensure timely and accurate reporting of student information and enrollment status information to the NSLDS. Views of Carle management: Methodist College agrees with the finding of inaccurate and delayed submissions and have been working to get everything caught back up now that NSC has fixed their security breach and incorrectly linking us to the wrong college.
Finding 2023 004: Inaccurate and Untimely Enrollment Reporting Condition Found Methodist College did not accurately and/or timely report student address changes and student enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS). The U.S. Department of Education (USDE) uses enrollment data reported by the College to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in-school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. Additionally, changes in a student’s permanent address are used by USDE to service loans. During our testing of enrollment reporting at the College, we noted that no submissions were made to NSLDS for the period 4/1/2023 to 12/31/2023. Further, we noted review controls were not implemented in the period to ensure enrollment and student data submitted to NSLDS was accurate and sent in accordance with required timeframes. The College disbursed FDL loans to 292 students and Pell grants to 193 students during the year ended December 31, 2023 for which enrollment reporting requirements applied. The number of undergraduate students enrolled in the College during fiscal year 2023 was 528. Criteria According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via NSLDS within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended. In addition, 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. Effective internal controls should include establishing procedures to ensure student campus and program-level enrollment status changes and address changes are accurately and timely reported to the NSLDS. Cause In discussing these conditions with College officials, they stated that NSC was part of a security breach and when they were fixing their processes, Methodist College got incorrectly linked to Methodist University in Fayetteville, NC causing submissions to report incorrectly on our end. Possible Asserted Effect Inaccurate and delayed submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling No sampling was performed. Recommendation We recommend the College review its procedures to ensure timely and accurate reporting of student information and enrollment status information to the NSLDS. Views of Carle management: Methodist College agrees with the finding of inaccurate and delayed submissions and have been working to get everything caught back up now that NSC has fixed their security breach and incorrectly linking us to the wrong college.
Finding 2023 004: Inaccurate and Untimely Enrollment Reporting Condition Found Methodist College did not accurately and/or timely report student address changes and student enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS). The U.S. Department of Education (USDE) uses enrollment data reported by the College to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in-school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. Additionally, changes in a student’s permanent address are used by USDE to service loans. During our testing of enrollment reporting at the College, we noted that no submissions were made to NSLDS for the period 4/1/2023 to 12/31/2023. Further, we noted review controls were not implemented in the period to ensure enrollment and student data submitted to NSLDS was accurate and sent in accordance with required timeframes. The College disbursed FDL loans to 292 students and Pell grants to 193 students during the year ended December 31, 2023 for which enrollment reporting requirements applied. The number of undergraduate students enrolled in the College during fiscal year 2023 was 528. Criteria According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via NSLDS within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended. In addition, 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. Effective internal controls should include establishing procedures to ensure student campus and program-level enrollment status changes and address changes are accurately and timely reported to the NSLDS. Cause In discussing these conditions with College officials, they stated that NSC was part of a security breach and when they were fixing their processes, Methodist College got incorrectly linked to Methodist University in Fayetteville, NC causing submissions to report incorrectly on our end. Possible Asserted Effect Inaccurate and delayed submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling No sampling was performed. Recommendation We recommend the College review its procedures to ensure timely and accurate reporting of student information and enrollment status information to the NSLDS. Views of Carle management: Methodist College agrees with the finding of inaccurate and delayed submissions and have been working to get everything caught back up now that NSC has fixed their security breach and incorrectly linking us to the wrong college.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: State of Arizona, the Office of the Governor Pass-Through Number(s): GR-ARPA-HHF-030122-01 and GR-ARPA-090121-01 Award Period: January 1, 2022 – November 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition/Context: The Organization did not maintain a formalized and written procurement policy. Criteria or specific requirement: In accordance with the Compliance Supplement, Part 6 – Internal Control, 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2 CFR 200.318 (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. Questioned costs: None Cause: The Organization did not have formal documented procurement policies in place. Effect: The Organization was not in compliance with the Compliance Supplement and the Code of Federal Regulations related to procurement. Repeat Finding: Yes Recommendation: We recommend that the Organization adopt a formal and written procurement policy. Views of responsible officials: Management agrees with the audit condition.
Assistance Listing Number: 93.498 Program Title: COVID-19 Provider Relief Fund Award Number / Year: Not applicable / 2023 Pass-Through Entity: Not applicable Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (DHHS). Condition: The Period 5 Report (only report for FY2023) and the revenue loss calculation were not reviewed and approved by an independent person separate from the preparer prior to submission to DHHS. The sample was statistically valid. Cause: The City did not have internal control processes and procedures in place requiring an independent person to review the reports before submission to ensure the loss revenue calculation and amounts reported were accurate. Effect: Information within the period reports submitted, including the lost revenue calculations, could contain errors. Questioned Costs: None noted. Recommendation: The City should review its internal control procedures to ensure there are proper review and approval processes over completeness and accuracy of reports in place before submissions to federal agencies.
Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/23 - 12/31/23 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Compliance Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context During our testing, we noted the department was unable to provide documentation to support management review and approval of the cash drawdowns prior to the drawdown of the federal funds. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023-002 – Cash Management (Continued) Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests. Views of Responsible Officials The Organization has reviewed all of our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a drawdown can be requested in the payment management system.
Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/23 - 12/31/23 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Compliance Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context During our testing, we noted the department was unable to provide documentation to support management review and approval of the cash drawdowns prior to the drawdown of the federal funds. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023-002 – Cash Management (Continued) Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests. Views of Responsible Officials The Organization has reviewed all of our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a drawdown can be requested in the payment management system.
Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/23 - 12/31/23 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Compliance Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context During our testing, we noted the department was unable to provide documentation to support management review and approval of the cash drawdowns prior to the drawdown of the federal funds. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023-002 – Cash Management (Continued) Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests. Views of Responsible Officials The Organization has reviewed all of our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a drawdown can be requested in the payment management system.
Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/23 - 12/31/23 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Compliance Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context During our testing, we noted the department was unable to provide documentation to support management review and approval of the cash drawdowns prior to the drawdown of the federal funds. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023-002 – Cash Management (Continued) Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests. Views of Responsible Officials The Organization has reviewed all of our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a drawdown can be requested in the payment management system.
Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/23 - 12/31/23 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Compliance Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context During our testing, we noted the department was unable to provide documentation to support management review and approval of the cash drawdowns prior to the drawdown of the federal funds. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023-002 – Cash Management (Continued) Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests. Views of Responsible Officials The Organization has reviewed all of our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a drawdown can be requested in the payment management system.
Uniform Guidance 2 CFR 200.303 states that non-federal entities must establish and maintain effective internal control over the federal award, stating that, "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).". The accounting department consists of one (1) individual responsible for all accounting functions, including writing and signing checks. Checks signed by the accountant are then mailed for payment without review and approval by another party. This lack of segregation creates a risk that unauthorized transactions could be approved and processed without appropriate oversight. Additionally, there is an increased potential for undetected errors or fraudulent activities. The current organizational structure and limited staffing resources have led to overlapping responsibilities, where duties are not adequately separated due to practical constraints. The absence of proper segregation of duties increases the risk of misappropriation of assets, inaccurate financial reporting, and potential non-compliance with applicable regulations and internal policies. The effectiveness of internal controls is compromised, potentially undermining the reliability of financial statements and safeguarding of assets.