Criteria or specific requirement: Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures in place to ensure the required certifications for covered contracts and subawards are received, documented, and contracts are not made with a debarred or suspended party. Condition: During our testing of six covered transactions, we noted all vendors and subawards did not have proper supporting documentation for suspension and debarment procedures for vendors. Questioned costs: None. Context: All six covered transaction tested did not have proper supporting documentation for suspension and debarment procedures. Cause: Lack of sufficient controls in place to ensure that suspension and debarment checks were performed prior to entering into contracts. Effect: Failure to obtain the required certifications or perform verification procedures with the SAM could result in the payment of federal funds to vendors that are suspended or debarred from participation in federal assistance programs. Repeat Finding: Yes, repeat of prior year finding 2022-005. Recommendation: CLA recommends the County obtain certifications from vendors stating their organization is not suspended, debarred, or otherwise excluded from participation in federal assistance programs or document the procedures performed to verify the vendor is not identified as suspended or debarred on SAM. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures in place to ensure the required certifications for covered contracts and subawards are received, documented, and contracts are not made with a debarred or suspended party. Condition: During our testing of six covered transactions, we noted all vendors and subawards did not have proper supporting documentation for suspension and debarment procedures for vendors. Questioned costs: None. Context: All six covered transaction tested did not have proper supporting documentation for suspension and debarment procedures. Cause: Lack of sufficient controls in place to ensure that suspension and debarment checks were performed prior to entering into contracts. Effect: Failure to obtain the required certifications or perform verification procedures with the SAM could result in the payment of federal funds to vendors that are suspended or debarred from participation in federal assistance programs. Repeat Finding: Yes, repeat of prior year finding 2022-005. Recommendation: CLA recommends the County obtain certifications from vendors stating their organization is not suspended, debarred, or otherwise excluded from participation in federal assistance programs or document the procedures performed to verify the vendor is not identified as suspended or debarred on SAM. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures in place to ensure the required certifications for covered contracts and subawards are received, documented, and contracts are not made with a debarred or suspended party. Condition: During our testing of six covered transactions, we noted all vendors and subawards did not have proper supporting documentation for suspension and debarment procedures for vendors. Questioned costs: None. Context: All six covered transaction tested did not have proper supporting documentation for suspension and debarment procedures. Cause: Lack of sufficient controls in place to ensure that suspension and debarment checks were performed prior to entering into contracts. Effect: Failure to obtain the required certifications or perform verification procedures with the SAM could result in the payment of federal funds to vendors that are suspended or debarred from participation in federal assistance programs. Repeat Finding: Yes, repeat of prior year finding 2022-005. Recommendation: CLA recommends the County obtain certifications from vendors stating their organization is not suspended, debarred, or otherwise excluded from participation in federal assistance programs or document the procedures performed to verify the vendor is not identified as suspended or debarred on SAM. Views of responsible officials: There is no disagreement with the audit finding.
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the Federal award that provides assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR Appendix IV to Part 200 Section B.2(b) requires that both the direct costs and the indirect costs must exclude capital expenditures and unallowable costs. Per Compliance Supplement, these indirect costs must conform to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Condition: During our testing of indirect costs, we noted that the Corporation charges the Federally approved rate of 28.7% on specific grant awards based on direct salaries and wages. However, the Corporation did not maintain supporting indirect cost pools and related documentation. Cause: The Corporation did not have formal process and policies to demonstrate adherence to the allowability requirements of indirect costs in accordance with 2 CFR Appendix IV to Part 200 Section B.2(b). Effect or Potential Effect: We were unable to determine whether indirect costs charged to Federal awards conform to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Allowable costs incurred by the Corporation exceeded the amount of approved grant funding, therefore no questioned costs are reported. Questioned costs: Unknown Context: Management was not able to provide sufficient and appropriate evidence that the reported indirect costs conformed to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-016 in the 2022 report. Recommendation: We recommend the Corporation develop and incorporate internal controls and policies to demonstrate adherence to the allowability requirements of indirect costs in accordance with 2 CFR Appendix IV to Part 200 Section B.2(b). View of Responsible Officials: Due to turnover of several key financial executives and personnel, the Corporation did not maintain any supporting indirect cost pools and related documentation.
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the Federal award that provides assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR Appendix IV to Part 200 Section B.2(b) requires that both the direct costs and the indirect costs must exclude capital expenditures and unallowable costs. Per Compliance Supplement, these indirect costs must conform to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Condition: During our testing of indirect costs, we noted that the Corporation charges the Federally approved rate of 28.7% on specific grant awards based on direct salaries and wages. However, the Corporation did not maintain supporting indirect cost pools and related documentation. Cause: The Corporation did not have formal process and policies to demonstrate adherence to the allowability requirements of indirect costs in accordance with 2 CFR Appendix IV to Part 200 Section B.2(b). Effect or Potential Effect: We were unable to determine whether indirect costs charged to Federal awards conform to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Allowable costs incurred by the Corporation exceeded the amount of approved grant funding, therefore no questioned costs are reported. Questioned costs: Unknown Context: Management was not able to provide sufficient and appropriate evidence that the reported indirect costs conformed to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-016 in the 2022 report. Recommendation: We recommend the Corporation develop and incorporate internal controls and policies to demonstrate adherence to the allowability requirements of indirect costs in accordance with 2 CFR Appendix IV to Part 200 Section B.2(b). View of Responsible Officials: Due to turnover of several key financial executives and personnel, the Corporation did not maintain any supporting indirect cost pools and related documentation.
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the Federal award that provides assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR Appendix IV to Part 200 Section B.2(b) requires that both the direct costs and the indirect costs must exclude capital expenditures and unallowable costs. Per Compliance Supplement, these indirect costs must conform to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Condition: During our testing of indirect costs, we noted that the Corporation charges the Federally approved rate of 28.7% on specific grant awards based on direct salaries and wages. However, the Corporation did not maintain supporting indirect cost pools and related documentation. Cause: The Corporation did not have formal process and policies to demonstrate adherence to the allowability requirements of indirect costs in accordance with 2 CFR Appendix IV to Part 200 Section B.2(b). Effect or Potential Effect: We were unable to determine whether indirect costs charged to Federal awards conform to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Allowable costs incurred by the Corporation exceeded the amount of approved grant funding, therefore no questioned costs are reported. Questioned costs: Unknown Context: Management was not able to provide sufficient and appropriate evidence that the reported indirect costs conformed to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-016 in the 2022 report. Recommendation: We recommend the Corporation develop and incorporate internal controls and policies to demonstrate adherence to the allowability requirements of indirect costs in accordance with 2 CFR Appendix IV to Part 200 Section B.2(b). View of Responsible Officials: Due to turnover of several key financial executives and personnel, the Corporation did not maintain any supporting indirect cost pools and related documentation.
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the Federal award that provides assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR Appendix IV to Part 200 Section B.2(b) requires that both the direct costs and the indirect costs must exclude capital expenditures and unallowable costs. Per Compliance Supplement, these indirect costs must conform to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Condition: During our testing of indirect costs, we noted that the Corporation charges the Federally approved rate of 28.7% on specific grant awards based on direct salaries and wages. However, the Corporation did not maintain supporting indirect cost pools and related documentation. Cause: The Corporation did not have formal process and policies to demonstrate adherence to the allowability requirements of indirect costs in accordance with 2 CFR Appendix IV to Part 200 Section B.2(b). Effect or Potential Effect: We were unable to determine whether indirect costs charged to Federal awards conform to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Allowable costs incurred by the Corporation exceeded the amount of approved grant funding, therefore no questioned costs are reported. Questioned costs: Unknown Context: Management was not able to provide sufficient and appropriate evidence that the reported indirect costs conformed to the allowability of cost provisions in 2 CFR Part 200, Subpart E or award agreement. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-016 in the 2022 report. Recommendation: We recommend the Corporation develop and incorporate internal controls and policies to demonstrate adherence to the allowability requirements of indirect costs in accordance with 2 CFR Appendix IV to Part 200 Section B.2(b). View of Responsible Officials: Due to turnover of several key financial executives and personnel, the Corporation did not maintain any supporting indirect cost pools and related documentation.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.600, Department of Health and Human Services, Head Start and Covid-19: Head Start ARP Federal Award Identification Number and Year: 05CH011937-03-03, 05HE000989-01-01 Pass-through Entity – N/A Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first-tier subawards and contractors (i.e., prime contractors) that award first-tier subcontracts. Criteria - Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – During our testing for reporting compliance, it was noted that the Organization did not submit the Federal Funding Accountability and Transparency Act report within the reporting timeline for prime grant recipients... Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2023. Subawards were not reported to FSRS in accordance with FFATA requirements. The Organization was required to report the subaward details above. The Organization was not required to report executive compensation. Recommendation – We recommend the Organization establish procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance of each subaward. View of Responsible Officials and Corrective Action Plan – The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.600, Department of Health and Human Services, Head Start and Covid-19: Head Start ARP Federal Award Identification Number and Year: 05CH011937-03-03, 05HE000989-01-01 Pass-through Entity – N/A Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first-tier subawards and contractors (i.e., prime contractors) that award first-tier subcontracts. Criteria - Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – During our testing for reporting compliance, it was noted that the Organization did not submit the Federal Funding Accountability and Transparency Act report within the reporting timeline for prime grant recipients... Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2023. Subawards were not reported to FSRS in accordance with FFATA requirements. The Organization was required to report the subaward details above. The Organization was not required to report executive compensation. Recommendation – We recommend the Organization establish procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance of each subaward. View of Responsible Officials and Corrective Action Plan – The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 64.033, Department of Veteran Affairs, VA Supportive Services for Veteran Families Program Federal Award Identification Number and Year: 21-MI-221, 22-MI-221, 20-MI-221-SS, 20-MI-221-LT, 20-MI-221 Pass-through Entity – N/A Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first-tier subawards and contractors (i.e., prime contractors) that award first-tier subcontracts. Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Criteria - Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – During our testing for reporting compliance, it was noted that the Organization did not submit the Federal Funding Accountability and Transparency Act report within the reporting timeline for prime grant recipients. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2023. Subawards were not reported to FSRS in accordance with FFATA requirements. The Organization was required to report the subaward details above. The Organization was not required to report executive compensation. Recommendation – We recommend the Organization establish procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance of each subaward. View of Responsible Officials and Corrective Action Plan – The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 64.033, Department of Veteran Affairs, VA Supportive Services for Veteran Families Program Federal Award Identification Number and Year: 21-MI-221, 22-MI-221, 20-MI-221-SS, 20-MI-221-LT, 20-MI-221 Pass-through Entity – N/A Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first-tier subawards and contractors (i.e., prime contractors) that award first-tier subcontracts. Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Criteria - Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – During our testing for reporting compliance, it was noted that the Organization did not submit the Federal Funding Accountability and Transparency Act report within the reporting timeline for prime grant recipients. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2023. Subawards were not reported to FSRS in accordance with FFATA requirements. The Organization was required to report the subaward details above. The Organization was not required to report executive compensation. Recommendation – We recommend the Organization establish procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance of each subaward. View of Responsible Officials and Corrective Action Plan – The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 64.033, Department of Veteran Affairs, VA Supportive Services for Veteran Families Program Federal Award Identification Number and Year: 21-MI-221, 22-MI-221, 20-MI-221-SS, 20-MI-221-LT, 20-MI-221 Pass-through Entity – N/A Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first-tier subawards and contractors (i.e., prime contractors) that award first-tier subcontracts. Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Criteria - Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – During our testing for reporting compliance, it was noted that the Organization did not submit the Federal Funding Accountability and Transparency Act report within the reporting timeline for prime grant recipients. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2023. Subawards were not reported to FSRS in accordance with FFATA requirements. The Organization was required to report the subaward details above. The Organization was not required to report executive compensation. Recommendation – We recommend the Organization establish procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance of each subaward. View of Responsible Officials and Corrective Action Plan – The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 64.033, Department of Veteran Affairs, VA Supportive Services for Veteran Families Program Federal Award Identification Number and Year: 21-MI-221, 22-MI-221, 20-MI-221-SS, 20-MI-221-LT, 20-MI-221 Pass-through Entity – N/A Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first-tier subawards and contractors (i.e., prime contractors) that award first-tier subcontracts. Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Criteria - Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – During our testing for reporting compliance, it was noted that the Organization did not submit the Federal Funding Accountability and Transparency Act report within the reporting timeline for prime grant recipients. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2023. Subawards were not reported to FSRS in accordance with FFATA requirements. The Organization was required to report the subaward details above. The Organization was not required to report executive compensation. Recommendation – We recommend the Organization establish procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance of each subaward. View of Responsible Officials and Corrective Action Plan – The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 64.033, Department of Veteran Affairs, VA Supportive Services for Veteran Families Program Federal Award Identification Number and Year: 21-MI-221, 22-MI-221, 20-MI-221-SS, 20-MI-221-LT, 20-MI-221 Pass-through Entity – N/A Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first-tier subawards and contractors (i.e., prime contractors) that award first-tier subcontracts. Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Criteria - Grant and cooperative agreement recipients and contractors are required to register FSRS and report subaward data through FSRS. Compliance testing of the Transparency Act reporting requirements must include the following key data elements about the first-tier subrecipients and subawards under grants and cooperative agreements. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – During our testing for reporting compliance, it was noted that the Organization did not submit the Federal Funding Accountability and Transparency Act report within the reporting timeline for prime grant recipients. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Organization’s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2023. Subawards were not reported to FSRS in accordance with FFATA requirements. The Organization was required to report the subaward details above. The Organization was not required to report executive compensation. Recommendation – We recommend the Organization establish procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance of each subaward. View of Responsible Officials and Corrective Action Plan – The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement: Suspension and Debarment and Significant Deficiency In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for the subrecipients that received federal funds. Questioned Costs: None noted. Context: Only one subreceipient received pass-through funding from the Unified Government. The single subrecipient under both ALN 93.044 and 93.045, receiving approximately $180,000, was not evaluated for suspension and debarment. It was noted after subsequent check, that the subrecipient was not suspended or debarred. Identification of Prior Year Finding: 2022-007 Effect: Federal funds could be paid to entities that are suspended or debarred. Cause: For the Unified Government, this is typically included in the contracts, but was not included in the subrecipient contracts for this program and the Unified Government did not have another means of validating suspension and debarment. Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors and subrecipients alike prior to making purchases with federal funds. When newly established programs include subrecipients, we also recommend the contracts include suspension and debarment language. View of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Procurement has begun the process of checking SAM.gov for debarment for potential suppliers. Also, departments have been informed of this required step for both suppliers and subrecipients. Downstream, need to evaluate if this language can be added to the contract templates.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement: Suspension and Debarment and Significant Deficiency In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for the subrecipients that received federal funds. Questioned Costs: None noted. Context: Only one subreceipient received pass-through funding from the Unified Government. The single subrecipient under both ALN 93.044 and 93.045, receiving approximately $180,000, was not evaluated for suspension and debarment. It was noted after subsequent check, that the subrecipient was not suspended or debarred. Identification of Prior Year Finding: 2022-007 Effect: Federal funds could be paid to entities that are suspended or debarred. Cause: For the Unified Government, this is typically included in the contracts, but was not included in the subrecipient contracts for this program and the Unified Government did not have another means of validating suspension and debarment. Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors and subrecipients alike prior to making purchases with federal funds. When newly established programs include subrecipients, we also recommend the contracts include suspension and debarment language. View of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Procurement has begun the process of checking SAM.gov for debarment for potential suppliers. Also, departments have been informed of this required step for both suppliers and subrecipients. Downstream, need to evaluate if this language can be added to the contract templates.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement: Subrecipient Monitoring and Material Weakness Per 2 CFR 200.332, a pass-through entity is required to evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and terms and conditions of the subaward as well as monitor the activities of the subrecipient which include reviewing financial and performance reports, obtaining and reviewing subrecipient single audit reports, etc. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: No risk assessment or ongoing formal monitoring of the subrecipient was performed. Questioned Costs: None noted. Context: There is only one subrecipient associated with this program. During 2023, the subrecipient received $180,658 ($31,619 - ALN 93.044, $149,039- ALN 93.045) from the Unified Government. The subrecipient for this program is a long-time subrecipient that is familiar with federal compliance requirements, but the risk assessment was not done in writing. Additionally, ongoing monitoring including reviewing for single audit filings were not completed. Identification of Prior Year Finding: 2022-008 Effect: Federal funds could be improperly utilized by a subrecipient which does not have an adequate understanding of the requirements or tools to support the program. Cause: The Unified Government has a long-time relationship with this subrecipient and did not formalize the risk assessment process. Further, formalized processes for monitoring subrecipients were not operating effectively. Recommendation: We recommend that the Unified Government develop procedures to perform a risk assessment on all potential subrecipients before entering into an agreement to provide federal funds to that entity and revisit annually thereafter. Additionally, formal policies and procedures should be put in place over the various levels of monitoring that may occur as a result of the risk assessment and should also include a trigger to ensure single audit reports of subrecipients are reviewed. View of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Aging department is now completing these assessments annually.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement: Subrecipient Monitoring and Material Weakness Per 2 CFR 200.332, a pass-through entity is required to evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and terms and conditions of the subaward as well as monitor the activities of the subrecipient which include reviewing financial and performance reports, obtaining and reviewing subrecipient single audit reports, etc. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: No risk assessment or ongoing formal monitoring of the subrecipient was performed. Questioned Costs: None noted. Context: There is only one subrecipient associated with this program. During 2023, the subrecipient received $180,658 ($31,619 - ALN 93.044, $149,039- ALN 93.045) from the Unified Government. The subrecipient for this program is a long-time subrecipient that is familiar with federal compliance requirements, but the risk assessment was not done in writing. Additionally, ongoing monitoring including reviewing for single audit filings were not completed. Identification of Prior Year Finding: 2022-008 Effect: Federal funds could be improperly utilized by a subrecipient which does not have an adequate understanding of the requirements or tools to support the program. Cause: The Unified Government has a long-time relationship with this subrecipient and did not formalize the risk assessment process. Further, formalized processes for monitoring subrecipients were not operating effectively. Recommendation: We recommend that the Unified Government develop procedures to perform a risk assessment on all potential subrecipients before entering into an agreement to provide federal funds to that entity and revisit annually thereafter. Additionally, formal policies and procedures should be put in place over the various levels of monitoring that may occur as a result of the risk assessment and should also include a trigger to ensure single audit reports of subrecipients are reviewed. View of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Aging department is now completing these assessments annually.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement – Earmarking and Material Weakness As described in the Older American Acts (OAA) Field Manual, Section 8.1.6.A.5 of the Kansas Department for Aging and Disability Services, the Unified Government is required to perform earmarking to ensure that no more than 120% of the budgeted amount of each category is spent and reimbursed. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: While performing procedures over the Aging Cluster, the Unified Government did not comply with the earmarking requirements as set forth by the grant. Questioned Costs – $4,149 (Legal services expenses which exceeded budgeted amounts by more than 20% for ALN 93.044 - 2301KSOASS). $106,409 (Congregate meals expenses which exceeded budgeted amounts by more than 20% of ALN 93.045 - 2301KSOAHD). $450,762 (Meals and delivery expenses which exceeded budgeted amounts by more than 20% of ALN 93.045 - 2301KSOACT and 2301KSOAHD). Context: We reviewed the budget to actual comparison for the grant period ended September 30, 2023, which is associated with the awards year end. We noted expenses exceeded the budgeted threshold of 120% by $561,320. Identification of Prior Year Finding: 2022-009 Effect: Compliance with earmarking is not being met. Cause: The Unified Government's controls to follow the earmarking requirement did not operate effectively. Recommendation: We recommend that the Unified Government put in place processes/controls to monitor earmarking requirement for compliance. Views of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Management will put controls and processes in place to ensure earmarking is being monitored for compliance.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement – Earmarking and Material Weakness As described in the Older American Acts (OAA) Field Manual, Section 8.1.6.A.5 of the Kansas Department for Aging and Disability Services, the Unified Government is required to perform earmarking to ensure that no more than 120% of the budgeted amount of each category is spent and reimbursed. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: While performing procedures over the Aging Cluster, the Unified Government did not comply with the earmarking requirements as set forth by the grant. Questioned Costs – $4,149 (Legal services expenses which exceeded budgeted amounts by more than 20% for ALN 93.044 - 2301KSOASS). $106,409 (Congregate meals expenses which exceeded budgeted amounts by more than 20% of ALN 93.045 - 2301KSOAHD). $450,762 (Meals and delivery expenses which exceeded budgeted amounts by more than 20% of ALN 93.045 - 2301KSOACT and 2301KSOAHD). Context: We reviewed the budget to actual comparison for the grant period ended September 30, 2023, which is associated with the awards year end. We noted expenses exceeded the budgeted threshold of 120% by $561,320. Identification of Prior Year Finding: 2022-009 Effect: Compliance with earmarking is not being met. Cause: The Unified Government's controls to follow the earmarking requirement did not operate effectively. Recommendation: We recommend that the Unified Government put in place processes/controls to monitor earmarking requirement for compliance. Views of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Management will put controls and processes in place to ensure earmarking is being monitored for compliance.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement – Allowable Costs/Cost Principles and Material Weakness Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our test work over the ALN 93.045 grant, we noted the Unified Government did not have time and activity records with sufficient detail per federal regulations document to support its compensation and fringe benefit expenses. Questioned Costs: Total questioned costs of $200,949 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context: We selected a sample of 60 charges totaling $16,075 to the Aging Cluster grants related to salaries and benefits expenditures. Within our sample, none of the 60 selections had proper documentation to support allocation to the grant. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the entire cluster in the audit period totaled $200,949 and represented 14% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Identification of Prior Year Finding: 2022-019 Effect: Based on testing completed, the Unified Government did not have sufficient procedures to allocate salaries and fringe benefits activity related to Aging Cluster throughout fiscal year 2023. Cause: Management indicated that this was attributed to a misunderstanding of the requirements and the inability to rely on budgeted estimates alone. Recommendation: We recommend that management utilize a time and activity method which meets the requirements of federal regulations. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Treasury COVID 19 - Coronavirus State and Local Fiscal Recovery Funds - 21.027 Criteria or Specific Requirement – Significant Deficiency Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Guidance on Recipient Compliance and Reporting Responsibilities, metropolitan cities and counties with a population below 250,000 residents that are allocated more than $10,000,000 in SLFRF are required to submit quarterly project and expenditure reports. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our test work over the Coronavirus State and Local Fiscal Recovery grant, we noted the Unified Government did not timely file one of the required reports. Questioned Costs – None noted. Context: One out of the two quarterly reports selected for testing was submitted on May 31, 2023 rather than the Department of Treasury's due date of April 30, 2023. The sample was not intended to be, and was not, a statistically valid sample. Identification of Prior Year Finding: 2022-012 Effect: Required reports are not being submitted timely. Cause: The Unified Government's controls to ensure reports are filed timely were not operating effectively. Recommendation: We recommend that the Unified Government implement a process that includes tracking the timely submission of reports. Views of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year. In concert with our ARPA consultant, we were able to combine the City & County on the portal and report timely quarterly since this initial issue in the reporting portal.
U.S. Department of Homeland Security Staffing for Adequate Fire and Emergency Response (SAFER) - 97.083 Criteria or Specific Requirement – Material Weakness Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: It is the Unified Government's policy that no funding received through the Staffing for Adequate Fire and Emergency Response (SAFER) grant is to be utilized for overtime pay even when it is allowed under the grant. During testing of allowable costs, we identified instances in which funding was used for overtime pay. Questioned Costs: None noted. Context: We selected a sample of 40 charges to the SAFER grant of which, all were salaries and benefits expenditures. Within our sample, we noted three of the selections were overtime and were charged and allocated to the grant. These were determined to be allowable under the grant as it was for overtime that the fire department routinely pays as a part of the firefighter’s regularly scheduled and contracted shift hours to comply with the Fair Labor Standards Act (FLSA). This sample was not intended to be, and was not, a statistically valid sample. Identification of Prior Year Finding: 2022-013 Effect: The Unified Government's control surrounding overtime pay was not operating effectively and overtime was applied against the grant despite their internal policies and controls. Cause: The Unified Government's controls to not charge overtime did not operate effectively. Recommendation: We recommend that the Unified Government review its control structure surrounding the SAFER award document and ensure they are designed around compliance requirements and that they are operating effectively. Views of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year. Management will work with stakeholders so that only the allowed costs are used as the basis of the reimbursement packet. We have also created fencing around allowed costs and period of performance in our new ERP system.
Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.
Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.
Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.
Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.
Finding 2023-004 Failure to Create and Implement Effective Internal Controls over Federal Compliance Type of Finding: Material Weakness in Internal Control over Compliance Condition and Context: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Criteria: According to Uniform Guidance 2 CFR §200.303, the recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Cause: Organizational leadership, including officers overseeing grants and accounting, do not appear to have the necessary skills, knowledge, and experience to create and implement an effective system of internal controls over compliance. Effect: The impact of failing to implement internal controls over relevant compliance requirements leads to an unacceptable level of inherent risk of material noncompliance in virtually all federally funded activities. This has and will continue to lead to material noncompliance in several compliance categories. This could lead to federally funds being misspent or inappropriately safeguarded, and funders could require the Organization to payback funds. Questioned Costs: There were no questioned costs identified. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Organization review federal Uniform Guidance compliance requirement categories and establish a robust system of internal controls to ensure compliance in all relevant categories. Views of Responsible Officials: The Organization retained a licensed CPA firm with significant expertise in financial reporting and single audit compliance. The Organization will develop and implement a system of internal controls to address federal compliance requirements. Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.
2023-004 Procurement, Suspension, and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1274, 2021 Pass-Through Agency: N/A – Federal Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the County 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. Additionally, the County must follow further federal guidance over full and open competition as provided in Title 2 U.S. Code of Federal Regulations § 200.319, and perform a cost or price analysis as provided in Title 2 U.S. Code of Federal Regulations § 200.324. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For two procurements tested above the micro-purchase threshold, documentation of the history of the procurement, providing full and open competition, and a cost or price analysis was not available. For the one covered transaction tested, the verification for suspended or debarred vendors was not performed before entering into the covered transaction. Questioned Costs: None. Context: Two of five contracts were tested for compliance with applicable federal regulations. Additionally, one covered transaction was subject to suspension and debarment. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: It cannot be determined that the contracting process was open and fair because the County did not document the rationale for the contractor selection. It also cannot be determined that an entity was not suspended, debarred, or otherwise excluded from conducting business with the County. Cause: The County did not maintain the necessary documentation to allow the auditor to test for procurement and suspension and debarment. Recommendation: We recommend the County maintain documentation on the history of a procurement, provide for full and open competition, and perform a cost or price analysis to support compliance with Title 2 U.S. Code of Federal Regulations §§ 200.318, 200.319, and 200.324. We further recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur
2023-007 Lack of Documentation for Employee Rate of Pay (Material Weakness) Federal Agency: Department of Homeland Security Pass-through Agency: New Hampshire Department of Safety Cluster/Program: COVID-19 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Passed-through Identification: 23DR4516PA Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the Town, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Entities must maintain adequate documentation to support payroll charges, including specific details on employee pay rates used for calculating reimbursements. This documentation is necessary to ensure that payroll costs charged to federal programs are reasonable, accurate, and in compliance with applicable laws and regulations. Condition: During our audit we noted that the Town was reimbursed for overtime hours performed by police and fire personnel who responded to the COVID-19 pandemic during 2020 and 2021. The rate of pay used was reflective of the employee’s overtime rate inclusive of fringe benefits. The Town was unable to provide documentation verifying the employee’s rate of pay used to calculate reimbursement for payroll charges. Specifically, records reflecting the employee’s overtime rate inclusive of fringe benefits, were not available for review. In addition, the Town acknowledged that they attempted to recalculate the rate of pay for each employee selected for testing, but it yielded figures that could not be matched to the original source worksheet submitted to the federal agency. Cause: The Town lacks a standardized process for recording and maintaining documentation for payroll rates, including the breakdown of overtime and fringe benefit components used for federal reimbursement. This is due to inadequate internal controls and oversight in the payroll and accounting processes, as well as limited staff training on federal documentation requirements. Effect: The inability to verify the overtime rate with fringe benefits used in reimbursement calculations creates a risk of non-compliance with federal requirements, which could lead to questioned costs and potential disallowance of the submitted payroll charges as it may not reflect actual, allowable costs. Additionally, the lack of supporting documentation undermines the Town’s ability to substantiate its payroll expenditures and comply with federal grant accounting requirements. Failure to provide adequate documentation could affect future funding eligibility. Consequently, essential payroll records were not retained, resulting in noncompliance with federal grant documentation standards and a disclaimer of opinion on the major program. Questioned Costs: $1,947,729 Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Town implement enhanced record-keeping procedures to ensure that all payroll charges, especially complex rates involving overtime and fringe benefits, are documented and verifiable. Specifically, the Town should establish a process to document and track each component of the rate of pay used in reimbursement calculations. This process should involve establishing a systematic approach to linking payroll records with source documents and include clear guidelines for calculating and recording overtime rates inclusive of fringe benefits. Additionally, we advise the Town to establish periodic internal reviews and staff training to ensure payroll charges are fully supported, align with federal requirements, and comply with documentation requirements. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-005 Procurement and Suspension and Debarment Prior Year Finding Number: 2022-006 Year of Finding Origination: 2020 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP3474; 2021 Pass-Through Agency: N/A – Federal Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: The County did not verify that vendors were not debarred, suspended, or otherwise excluded from participation in federal assistance programs or activities before entering into the covered transactions. Questioned Costs: None. Context: The County has revised its procurement policies to include components of federal procurement requirements related to suspension and debarment; these are pending review and approval by the Board of County Commissioners. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services. Cause: The County’s written procurement policy does not include requirements specific to suspension and debarment. Recommendation: We recommend the County include the specific components of federal procurement requirements in its written procurement policies and procedures. View of Responsible Official: Acknowledge
Finding 2023-002 Criteria or specific requirement – The Organization is subject to 2 CFR section 200.303 and 45 CFR section 75.303. Both require that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition – The Organization has not completely met the requirements and expectations of the sections cited above as several significant deficiencies exist in the Organization’s internal control over compliance. Context – In August 2023, a review team from the Administration for Community Living (ACL) conducted a compliance review of the Organization. In January 2024, ACL issued a draft of their report addressing the results of the compliance review. In that report, ACL identified numerous significant deficiencies in the Organization’s internal control over compliance and concerns of potential noncompliance. ACL has continued working closely with the Organization in providing technical assistance resources to support the Organization in designing, implementing and maintaining effective internal control over compliance. Effect – If the Organization does not correct the significant deficiencies detailed in the ACL compliance review report, then unallowable activities and unallowable costs may be improperly charged to the program. Cause – The ACL review team identified the following significant deficiencies in the Organization’s internal control over compliance. • Insufficient financial management policies and procedures • Ineffective internal controls in expense review and payment processes • Commingling of cost centers and inadequate accounting system to track Part C award data • Minimal oversight in budget reconciliation activities • Inadequate internal controls and oversight of timekeeping processes • Inadequate contracting and procurement processes and insufficient documentation of contracting and procurement actions • Current management and staffing model is inadequate to ensure internal controls • Inadequate controls to verify costs allowability Recommendation – The Organization should continue working with the assistance of ACL to correct the significant deficiencies noted by the ACL review team in order to improve internal control over compliance and meet the requirements and expectations of 2 CFR section 200.303 and 45 CFR section 75.303. Views of responsible officials and planned corrective actions – The Organization agrees with the finding and has made substantial progress in addressing the significant deficiencies identified in their internal control over compliance. The Organization is committed to continuing to work diligently and in full cooperation with ACL to implement the corrective actions included in their compliance review report.
FINDING 2023-003 Subject: Water and Waste Disposal System for Rural Communities - Equipment Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): CY 2023 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The Town had not designed or implemented adequate internal controls and procedures to ensure that equipment purchased from the grant was included in the Town's capital asset listing. A physical inventory of equipment was not performed at least once within the last two years. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 17 TOWN OF LAFONTAINE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause The Town was not aware of the compliance requirement. Effect Without the proper implementation of an effectively designed system of internal controls, the Town cannot ensure the required assets are included in the capital asset listing. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 18 TOWN OF LAFONTAINE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the Town design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties, to ensure capital assets purchased from the grant are included in the Town's capital asset ledger and that a physical inventory is performed every two years. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Water and Waste Disposal System for Rual Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): CY 2023 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The Town had not designed or implemented adequate internal controls and procedures to ensure that reports were prepared, accurate, and submitted in accordance with the applicable compliance requirements for the federal grant. The United States Department of Agriculture (USDA) requires the following reports be submitted annually: Statement of Budget, Income, and Equity (Form RD 442-2) Balance Sheet (Form RD 442-3) The Form RD 442-2 covers financial operations relating to the Town's water main replacement project and the Form RD 442-3 presents the financial status of the project. In both instances, a borrower may submit the financial data on other forms, provided the forms are in a similar format and signed and dated by the organization's official to certify the correctness of the information. Alternatively, an annual audit may be submitted in lieu of the forms. The Town was required to file each report, as noted above, during the audit period; however, the reports were not filed. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 19 TOWN OF LAFONTAINE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 7 CFR 1780.47 states in part: "Borrower accounting methods, management reporting and audits. . . . (e) Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used. (f) Management reports. These reports will furnish management with a means of evaluating prior decisions and serve as a basis for planning future operations and financial strategies. In those cases where revenues from multiple sources are pledged as security for an RUS loan, two reports will be required; one for the project being financed by RUS and one combining the entire operation of the borrower. In those cases where RUS loans are secured by general obligation bonds or assessments and the borrower combines revenues from all sources, one management report combining all such revenues is acceptable. The following management data will be submitted by the borrower to the processing office. These reports at a minimum will include a balance sheet and income and expense statement. . . . (2) Annual management reports. Prior to the beginning of each fiscal year the following will be submitted to the processing office. (If Form RD 442-2 is used as the annual management report, enter data in column three only of Schedule 1, and complete all of Schedule 2.) (i) Two copies of the management reports and proposed 'Annual Budget'. (ii) Financial information may be reported on Form RD 442-2 which includes Schedule 1, 'Statement of Budget, Income and Equity' and Schedule 2, 'Projected Cash Flow' or information in similar format. (iii) A copy of the rate schedule in effect at the time of submission. INDIANA STATE BOARD OF ACCOUNTS 20 TOWN OF LAFONTAINE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (g) Substitute for management reports. When RUS loans are secured by the general obligation of the public body or tax assessments which total 100 percent of the debt service requirements, the State program official may authorize an annual audit to substitute for other management reports if the audit is received within nine months after the end of the audit period." Cause The Town incorrectly assumed that the reports were filed by the engineering firm coordinating the grant. Effect Without the proper implementation of an effectively designed system of internal controls, the Town cannot ensure the required reports are filed with the awarding agency. As such, the USDA does not have accurate and current information to discern the financial status of the Town's project. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management design and implement a system of internal controls to ensure that all required reports are filed. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2023-005 Procurement and Suspension and Debarment Prior Year Finding Number: 2022-006 Year of Finding Origination: 2020 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP3474; 2021 Pass-Through Agency: N/A – Federal Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: The County did not verify that vendors were not debarred, suspended, or otherwise excluded from participation in federal assistance programs or activities before entering into the covered transactions. Questioned Costs: None. Context: The County has revised its procurement policies to include components of federal procurement requirements related to suspension and debarment; these are pending review and approval by the Board of County Commissioners. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services. Cause: The County’s written procurement policy does not include requirements specific to suspension and debarment. Recommendation: We recommend the County include the specific components of federal procurement requirements in its written procurement policies and procedures. View of Responsible Official: Acknowledge
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Federal Program Title(s): 4. ALN 20.600 – State and Community Highway Safety 5. ALN 20.608 – Minimum Penalties for Repeat Offenders for Driving While Intoxicated 6. ALN 20.616 – National Priority Safety Program Federal Agencies: Department of Transportation Pass-Through Agencies: New Mexico Department of Transportation Pass-through Agency Award Numbers and Award Period: • CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • CO6101 – ALN 20.600 (10/1/2020-10/1/2026) • CP6032/CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • CO6278 – ALN 20.600 (11/1/2020-10/31/2024) Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal 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 testing, we noted that Safer's internal controls were not sufficient or were not operating as designed in order to document approval of allowable costs principles related to payroll disbursements. During our testwork over allowable costs over payroll, we identified 22 of the 60 tested disbursements that had errors in the allocation to grant expense. This is where the amount allocated did not agree to time and effort documentation, error in the amount allocated, or general clerical errors in the amount charged to the grant. As such, the expenses were incorrectly stated. Known (Projected) Questioned Costs: • $591 ($3,962) CO6383 – ALN 20.600 (10/1/2022-9/30/2024) • $2,339 ($28,127) CO6349 – ALN 20.600 & 20.616 (10/1/2021-9/30/2025) • None - CO6275 – ALN 20.600 (10/1/2020-9/30/2024) • None - CO6278 – ALN 20.600 (11/1/2020-10/31/2024)Prior year finding: Repeated – previously 2022-02. Context: The breakdown in internal controls over payroll allocations created errors in amounts posted to the general ledger through allocations. Further, these amounts were the billed in error. Effect: The Organization may overbill or underbill respective grants based on work performed and time and effort documented. Cause: Long-time institutional knowledge was lost when a prior CFO left the Organization in 2021. Between 2022 and 2024, Safer welcomed two individuals to the CFO position; however, neither were able to fulfill the Organization’s requirements for the position. Recommendation: CLA recommends management continue to assess the current procedures for payroll allocations to ensure that expenditures are not claimed in error. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Safer management became aware of the error early in the subsequent calendar and recalculated 100% of the payroll for the year under audit. They noted that the actual error (in reviewing and recalculating the full payroll for the year) is $2,100 for CO6349 – ALN 20.600 & 20.616 (10/1/2021- 9/30/2025) and ($2,157) (underbilled) for CO6383 – ALN 20.600 (10/1/2022-9/30/2024). The Organization has updated their processes and adopted new control procedures to ensure accuracy going forward, including additional segregation of duties, monitoring, and review. Action Planned/Taken in Response to Finding: • The individual directly responsible for the errors is no longer with the Organization and the duties related to payroll have been assigned to someone more familiar with the responsibility that the role entails. The Organization has retained the services of a skilled accounting team to conduct a thorough review and assessment of all payroll related policies and procedures. As a result, processes have been updated and duties have been segregated related to this process. The Organization has implemented new procedures to verify and confirm payroll allocations, added in additional layers of review, and reinforced accountability to ensure accurate reporting and allocation moving forward. Name(s) of the Contact Person(s) Responsible for Corrective Action: • Lisa Kelloff, CEO Planned Completion Date for Corrective Action Plan: Safer has currently implemented the above noted responses to the finding during 2024.
Material Weakness in Internal Control Over Compliance – G. Matching, Level of Effort, Earmarking Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”. Condition and Context: During 2023, the Organization reconciled the applicable match at the end of the grant period and submitted to the City of Indianapolis. There was no documentation on review of the schedule of the match nor was there a periodic assessment of the match until the reporting date. Cause and Effect: We noted a lack of internal controls surrounding the tracking and review of the match. Errors could have occurred in the annual grant matching report which could have resulted in material non-compliance. Recommendation: We recommend the Organization implement procedures to track the match on a monthly basis with adequate review and approval. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the recommendation and plans to implement a formal review expenditures of federal awards corrective action by December 31, 2024.