Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, the non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, the non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, the non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, the non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, the non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, the non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
2023-001 Suspension and Debarment Prior Year Finding Number: 2022-001 Year of Finding Origination: 2022 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: SLFRP3269; 2021 Pass-Through Agency: N/A – 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. The County’s procurement policy requires verification that vendors are not suspended or debarred. Condition: For both covered transactions selected for testing, the County did not perform the verification for suspended or debarred vendors prior to entering into the covered transactions. Questioned Costs: None. Context: There were nine covered transactions during the year. In addition, neither of the vendors tested were listed as suspended or debarred on SAM.gov at the time of the audit. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County has procedures in place to perform verification and retain documentation, but not all employees are aware of the procedures or federal requirements. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. In addition, the County should consider providing additional training to employees to ensure staff are aware of federal requirements and County procedures. View of Responsible Official: Concur
2023-003 U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria - 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The Loan Resolution Security Agreement requires a monthly amount to be set aside in a reserve fund until the specific account balance is reached. Condition – The Hospital did not sufficiently fund their reserve account. As of December 31, 2023, the Hospital should have USDA debt reserves at least equal to $389,998. The USDA debt reserves equaled $141,821 as of December 31, 2023. Cause – Management has not funded the USDA debt reserves adequately. Effect – The Hospital was not in compliance with their provisions of the USDA debt agreements. Questioned Costs - None reported. Context – Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend the Hospital fund the reserve account adequately at each measurement date. Views of Responsible Officials - Management agrees with the finding.
Federal Agency: United States Department of Health and Human Services Federal Program: Aging Cluster Federal Assistance Listing Numbers 93.044, 93.045, 93.053 Federal Award Year: 2022-2023 Criteria or specific requirement – Activities allowed or unallowed, allowable costs/cost principles (2 CFR 200.303) The recipient and subrecipient must 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. Condition – Expenditures were not reviewed and approved per the Organization's policy. Cause – The Organization's internal controls were not adequate to ensure individual expenditures were reviewed and approved. Effect or Potential Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Questioned Costs – None Context – A sample of 25 expenditures was tested out of a total population of 837. Approval was not obtained for four expenditures as required. The sampling methodology used is not and is not intended to be statistically valid. Identification as a Repeat Finding – Not a repeat finding. Recommendation – We recommend the Organization implement additional procedures and policies to strengthen its processes and controls to ensure all expenditures are reviewed for compliance with federal statutes, regulations and comply with the terms and conditions of the federal award. Views of Responsible Officials and Planned Corrective Actions – Management concurs the with findings and plans to implement the recommendations above. Expenditures are required to be supported by a purchase order, work order or purchase requisite, along with all receipts. These requests are reviewed by the Director of Finance and the Executive Director for approval. All expenditures are then reviewed by the Payroll Manager to ensure proper documentation has been obtained. The expenditure is then entered into our accounting software, which is then approved by the Executive Director. These processes have been implemented in 2024 to ensure segregation of duties and that all transactions and entries into our accounting software are reviewed and approved by either the Director of Finance and/or the Executive Director. Management identified these issues during the 2024 FY and has implemented new processes or procedures to strengthen our internal controls.
Federal Agency: United States Department of Health and Human Services Federal Program: Aging Cluster Federal Assistance Listing Numbers 93.044, 93.045, 93.053 Federal Award Year: 2022-2023 Criteria or specific requirement – Activities allowed or unallowed, allowable costs/cost principles (2 CFR 200.303) The recipient and subrecipient must 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. Condition – Expenditures were not reviewed and approved per the Organization's policy. Cause – The Organization's internal controls were not adequate to ensure individual expenditures were reviewed and approved. Effect or Potential Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Questioned Costs – None Context – A sample of 25 expenditures was tested out of a total population of 837. Approval was not obtained for four expenditures as required. The sampling methodology used is not and is not intended to be statistically valid. Identification as a Repeat Finding – Not a repeat finding. Recommendation – We recommend the Organization implement additional procedures and policies to strengthen its processes and controls to ensure all expenditures are reviewed for compliance with federal statutes, regulations and comply with the terms and conditions of the federal award. Views of Responsible Officials and Planned Corrective Actions – Management concurs the with findings and plans to implement the recommendations above. Expenditures are required to be supported by a purchase order, work order or purchase requisite, along with all receipts. These requests are reviewed by the Director of Finance and the Executive Director for approval. All expenditures are then reviewed by the Payroll Manager to ensure proper documentation has been obtained. The expenditure is then entered into our accounting software, which is then approved by the Executive Director. These processes have been implemented in 2024 to ensure segregation of duties and that all transactions and entries into our accounting software are reviewed and approved by either the Director of Finance and/or the Executive Director. Management identified these issues during the 2024 FY and has implemented new processes or procedures to strengthen our internal controls.
Federal Agency: United States Department of Health and Human Services Federal Program: Aging Cluster Federal Assistance Listing Numbers 93.044, 93.045, 93.053 Federal Award Year: 2022-2023 Criteria or specific requirement – Activities allowed or unallowed, allowable costs/cost principles (2 CFR 200.303) The recipient and subrecipient must 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. Condition – Expenditures were not reviewed and approved per the Organization's policy. Cause – The Organization's internal controls were not adequate to ensure individual expenditures were reviewed and approved. Effect or Potential Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Questioned Costs – None Context – A sample of 25 expenditures was tested out of a total population of 837. Approval was not obtained for four expenditures as required. The sampling methodology used is not and is not intended to be statistically valid. Identification as a Repeat Finding – Not a repeat finding. Recommendation – We recommend the Organization implement additional procedures and policies to strengthen its processes and controls to ensure all expenditures are reviewed for compliance with federal statutes, regulations and comply with the terms and conditions of the federal award. Views of Responsible Officials and Planned Corrective Actions – Management concurs the with findings and plans to implement the recommendations above. Expenditures are required to be supported by a purchase order, work order or purchase requisite, along with all receipts. These requests are reviewed by the Director of Finance and the Executive Director for approval. All expenditures are then reviewed by the Payroll Manager to ensure proper documentation has been obtained. The expenditure is then entered into our accounting software, which is then approved by the Executive Director. These processes have been implemented in 2024 to ensure segregation of duties and that all transactions and entries into our accounting software are reviewed and approved by either the Director of Finance and/or the Executive Director. Management identified these issues during the 2024 FY and has implemented new processes or procedures to strengthen our internal controls.
Federal Agency: United States Department of Health and Human Services Federal Program: Aging Cluster Federal Assistance Listing Numbers 93.044, 93.045, 93.053 Federal Award Year: 2022-2023 Criteria or specific requirement – Activities allowed or unallowed, allowable costs/cost principles (2 CFR 200.303) The recipient and subrecipient must 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. Condition – Expenditures were not reviewed and approved per the Organization's policy. Cause – The Organization's internal controls were not adequate to ensure individual expenditures were reviewed and approved. Effect or Potential Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Questioned Costs – None Context – A sample of 25 expenditures was tested out of a total population of 837. Approval was not obtained for four expenditures as required. The sampling methodology used is not and is not intended to be statistically valid. Identification as a Repeat Finding – Not a repeat finding. Recommendation – We recommend the Organization implement additional procedures and policies to strengthen its processes and controls to ensure all expenditures are reviewed for compliance with federal statutes, regulations and comply with the terms and conditions of the federal award. Views of Responsible Officials and Planned Corrective Actions – Management concurs the with findings and plans to implement the recommendations above. Expenditures are required to be supported by a purchase order, work order or purchase requisite, along with all receipts. These requests are reviewed by the Director of Finance and the Executive Director for approval. All expenditures are then reviewed by the Payroll Manager to ensure proper documentation has been obtained. The expenditure is then entered into our accounting software, which is then approved by the Executive Director. These processes have been implemented in 2024 to ensure segregation of duties and that all transactions and entries into our accounting software are reviewed and approved by either the Director of Finance and/or the Executive Director. Management identified these issues during the 2024 FY and has implemented new processes or procedures to strengthen our internal controls.
Federal Agency: United States Department of Health and Human Services Federal Program: Aging Cluster Federal Assistance Listing Numbers 93.044, 93.045, 93.053 Federal Award Year: 2022-2023 Criteria or specific requirement – Activities allowed or unallowed, allowable costs/cost principles (2 CFR 200.303) The recipient and subrecipient must 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. Condition – Expenditures were not reviewed and approved per the Organization's policy. Cause – The Organization's internal controls were not adequate to ensure individual expenditures were reviewed and approved. Effect or Potential Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Questioned Costs – None Context – A sample of 25 expenditures was tested out of a total population of 837. Approval was not obtained for four expenditures as required. The sampling methodology used is not and is not intended to be statistically valid. Identification as a Repeat Finding – Not a repeat finding. Recommendation – We recommend the Organization implement additional procedures and policies to strengthen its processes and controls to ensure all expenditures are reviewed for compliance with federal statutes, regulations and comply with the terms and conditions of the federal award. Views of Responsible Officials and Planned Corrective Actions – Management concurs the with findings and plans to implement the recommendations above. Expenditures are required to be supported by a purchase order, work order or purchase requisite, along with all receipts. These requests are reviewed by the Director of Finance and the Executive Director for approval. All expenditures are then reviewed by the Payroll Manager to ensure proper documentation has been obtained. The expenditure is then entered into our accounting software, which is then approved by the Executive Director. These processes have been implemented in 2024 to ensure segregation of duties and that all transactions and entries into our accounting software are reviewed and approved by either the Director of Finance and/or the Executive Director. Management identified these issues during the 2024 FY and has implemented new processes or procedures to strengthen our internal controls.
2023-003- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of federal expenditures, we noted that certain expenses were not allowable activities under uniform guidance. Cause: Internal controls surrounding the review of supporting documentation of expenditures charged to grants are not properly implemented to detect and correct errors. Effect: The Organization received reimbursement for unallowable expenditures. Questioned Costs: ALN 84.287 - $938 ALN 84.215J - $620 Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-004: Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing, we noted that expenditures were allocated to the wrong budget category line items and did not agree to the underlying accounting records. Cause: Internal controls surrounding the review and reconciliation of supporting documentation to expenditures charged to the grant are not properly implemented to detect and correct errors. Effect: The costs submitted and reimbursed by the grantors did not agree to the budget categories set forth in the grant agreement, therefore the underlying accounting records were not consistent with what was being reported to the grantors. Questioned Costs: None Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-005 - Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended for allowable costs in accordance with Subpart E - Cost Principles of Uniform Guidance. The CFR section 200.303 (i) states that, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of payroll costs, we noted that (1) the Organization’s documentation of time and effort related to the Federal programs did not agree to personnel costs charged to the Federal program (2) the Organization did not properly review and reconcile time and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs. Cause: Internal controls surrounding the tracking and review of payroll expenditures charged to Federal programs were not properly implemented to detect and correct errors. Additionally, the grant related payroll tracking was a manual process during 2023, therefore increasing the possibility of error. Effect: The Organization did not properly review and reconcile time and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs. Questioned Costs: ALN 84.287 - $3,905 ALN 84.215J - $8,130 Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that time records are reviewed and reconciled to payroll expenditures being charged to the Federal program. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of federal expenditures, we noted that certain expenses were not allowable activities under uniform guidance. Cause: Internal controls surrounding the review of supporting documentation of expenditures charged to grants are not properly implemented to detect and correct errors. Effect: The Organization received reimbursement for unallowable expenditures. Questioned Costs: ALN 84.287 - $938 ALN 84.215J - $620 Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-004: Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing, we noted that expenditures were allocated to the wrong budget category line items and did not agree to the underlying accounting records. Cause: Internal controls surrounding the review and reconciliation of supporting documentation to expenditures charged to the grant are not properly implemented to detect and correct errors. Effect: The costs submitted and reimbursed by the grantors did not agree to the budget categories set forth in the grant agreement, therefore the underlying accounting records were not consistent with what was being reported to the grantors. Questioned Costs: None Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-005 - Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended for allowable costs in accordance with Subpart E - Cost Principles of Uniform Guidance. The CFR section 200.303 (i) states that, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of payroll costs, we noted that (1) the Organization’s documentation of time and effort related to the Federal programs did not agree to personnel costs charged to the Federal program (2) the Organization did not properly review and reconcile time and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs. Cause: Internal controls surrounding the tracking and review of payroll expenditures charged to Federal programs were not properly implemented to detect and correct errors. Additionally, the grant related payroll tracking was a manual process during 2023, therefore increasing the possibility of error. Effect: The Organization did not properly review and reconcile time and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs. Questioned Costs: ALN 84.287 - $3,905 ALN 84.215J - $8,130 Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that time records are reviewed and reconciled to payroll expenditures being charged to the Federal program. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of federal expenditures, we noted that certain expenses were not allowable activities under uniform guidance. Cause: Internal controls surrounding the review of supporting documentation of expenditures charged to grants are not properly implemented to detect and correct errors. Effect: The Organization received reimbursement for unallowable expenditures. Questioned Costs: ALN 84.287 - $938 ALN 84.215J - $620 Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-004: Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing, we noted that expenditures were allocated to the wrong budget category line items and did not agree to the underlying accounting records. Cause: Internal controls surrounding the review and reconciliation of supporting documentation to expenditures charged to the grant are not properly implemented to detect and correct errors. Effect: The costs submitted and reimbursed by the grantors did not agree to the budget categories set forth in the grant agreement, therefore the underlying accounting records were not consistent with what was being reported to the grantors. Questioned Costs: None Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-005 - Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended for allowable costs in accordance with Subpart E - Cost Principles of Uniform Guidance. The CFR section 200.303 (i) states that, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of payroll costs, we noted that (1) the Organization’s documentation of time and effort related to the Federal programs did not agree to personnel costs charged to the Federal program (2) the Organization did not properly review and reconcile time and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs. Cause: Internal controls surrounding the tracking and review of payroll expenditures charged to Federal programs were not properly implemented to detect and correct errors. Additionally, the grant related payroll tracking was a manual process during 2023, therefore increasing the possibility of error. Effect: The Organization did not properly review and reconcile time and effort records to payroll costs charged to the Federal grant to ensure amounts charged to the grant were allowable costs. Questioned Costs: ALN 84.287 - $3,905 ALN 84.215J - $8,130 Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that time records are reviewed and reconciled to payroll expenditures being charged to the Federal program. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-003 Special Tests and Provisions 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 Agriculture Program: 10.665 Schools and Roads – Grants to States Award Number and Year: P.L. 117-58; 2023 Pass-Through Agency: Minnesota Management and Budget 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 16 United States Code § 7142 states that a participating county can use Title III funds only after a 45-day public comment period. Condition: The County expended fiscal year 2019 Title III funds in May 2023, prior to the 45-day public comment period. Questioned Costs: None. Context: The 45-day public comment period for fiscal year 2019 Title III funds was from October 27, 2023, to December 11, 2023. Effect: Failing to follow program requirements could result in inappropriately expending funds and affect future funding. Cause: New County personnel were unaware of these requirements. Recommendation: We recommend County staff establish procedures to ensure Title III funds are not expended prior to the required public comment period. View of Responsible Official: Concur
2023-004 Eligibility 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 Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2305MN5ADM; 2023 Pass-Through Agency: Minnesota Department of Human Services 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. Condition: The Minnesota Department of Human Services (DHS) maintains the computer systems, METS and MAXIS, which are used by Lake County to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS and 40 METS case files tested: • In METS, three case files did not contain documentation that social security numbers were verified. Additionally, two of those three files did not contain documentation that citizenship was verified. • In MAXIS, there was one instance where judicial determination or voluntary placement agreement for Foster Care was missing. Questioned Costs: Not applicable. The County administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and Lake County Public Health and Human Services split the eligibility determination process. Pursuant to Minnesota statutes, Lake County Public Health and Human Services performs the “intake function” needed for this program, while the state maintains the MAXIS and METS systems, which support the eligibility determination process. Participants receive benefit payments from the state. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updated information in MAXIS and METS documenting verification of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel entering case information into MAXIS and METS did not ensure all required information was obtained or retained. Recommendation: We recommend the County implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations is obtained, retained, and properly input or updated in MAXIS and METS. In addition, Lake County should consider providing further training to program personnel. View of Responsible Official: Concur
2023-005 Local Collaborative Time Study (LCTS) Reporting (Cost Schedules DHS-3220) 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 Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2305MN5ADM; 2023 Pass-Through Agency: Minnesota Department of Human Services 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. For County federal awards received from the Minnesota Department of Human Services (DHS), internal control should be established and maintained to provide assurance that program reports submitted to DHS are accurate and completed in accordance with DHS reporting instructions. DHS Bulletin No. 16-32-04 requires the Local Collaborative Time Study (LCTS) Fiscal Reporting and Payment Agent to review DHS-3220 quarterly reports prior to their submission. Condition: In a sample of six DHS-3220 Cost Schedules tested, none were reviewed by the County’s LCTS Fiscal Reporting and Payment Agent. Questioned Costs: None. Context: The DHS-3220 Cost Schedules are submitted quarterly by each member of a collaborative to DHS for reimbursement of LCTS money, which is reimbursed to the County, in part, with federal Medical Assistance Program funds. Lake County Public Health and Human Services acts as the LCTS Fiscal Reporting and Payment Agent for the local collaborative in Lake County. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: If reviews are not performed, there is an increased possibility that an error will occur and not be detected, resulting in the County receiving the incorrect amount of federal reimbursements. Cause: Staff from Lake County Public Health and Human Services were not aware of the review requirements for the collaborative partners’ quarterly reports. Recommendation: We recommend the County implement procedures to ensure the DHS-3220 Cost Schedules are reviewed and evidence of the review is retained. View of Responsible Official: Concur
2023-004 Eligibility 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 Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2305MN5ADM; 2023 Pass-Through Agency: Minnesota Department of Human Services 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. Condition: The Minnesota Department of Human Services (DHS) maintains the computer systems, METS and MAXIS, which are used by Lake County to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS and 40 METS case files tested: • In METS, three case files did not contain documentation that social security numbers were verified. Additionally, two of those three files did not contain documentation that citizenship was verified. • In MAXIS, there was one instance where judicial determination or voluntary placement agreement for Foster Care was missing. Questioned Costs: Not applicable. The County administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and Lake County Public Health and Human Services split the eligibility determination process. Pursuant to Minnesota statutes, Lake County Public Health and Human Services performs the “intake function” needed for this program, while the state maintains the MAXIS and METS systems, which support the eligibility determination process. Participants receive benefit payments from the state. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updated information in MAXIS and METS documenting verification of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel entering case information into MAXIS and METS did not ensure all required information was obtained or retained. Recommendation: We recommend the County implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations is obtained, retained, and properly input or updated in MAXIS and METS. In addition, Lake County should consider providing further training to program personnel. View of Responsible Official: Concur
2023-005 Local Collaborative Time Study (LCTS) Reporting (Cost Schedules DHS-3220) 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 Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2305MN5ADM; 2023 Pass-Through Agency: Minnesota Department of Human Services 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. For County federal awards received from the Minnesota Department of Human Services (DHS), internal control should be established and maintained to provide assurance that program reports submitted to DHS are accurate and completed in accordance with DHS reporting instructions. DHS Bulletin No. 16-32-04 requires the Local Collaborative Time Study (LCTS) Fiscal Reporting and Payment Agent to review DHS-3220 quarterly reports prior to their submission. Condition: In a sample of six DHS-3220 Cost Schedules tested, none were reviewed by the County’s LCTS Fiscal Reporting and Payment Agent. Questioned Costs: None. Context: The DHS-3220 Cost Schedules are submitted quarterly by each member of a collaborative to DHS for reimbursement of LCTS money, which is reimbursed to the County, in part, with federal Medical Assistance Program funds. Lake County Public Health and Human Services acts as the LCTS Fiscal Reporting and Payment Agent for the local collaborative in Lake County. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: If reviews are not performed, there is an increased possibility that an error will occur and not be detected, resulting in the County receiving the incorrect amount of federal reimbursements. Cause: Staff from Lake County Public Health and Human Services were not aware of the review requirements for the collaborative partners’ quarterly reports. Recommendation: We recommend the County implement procedures to ensure the DHS-3220 Cost Schedules are reviewed and evidence of the review is retained. View of Responsible Official: Concur
Criteria or specific requirement: Organizations are required to retain the supporting documentation for determining whether an expenditure is an allowable cost under a federal grant and to ensure the cost was charged to the appropriate grant. In addition, § 200.303(a) requires organizations to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: ICEDC lacked sufficient controls to ensure all supporting documentation was kept for general expenditures, to show that expenditures paid through autopay were adequately reviewed, and to ensure a second party reviewed the Executive Director’s (ED’s) payroll charges. Questioned costs: Known Questioned Costs: $2,217 Likely Questioned Costs: $25,173 Context: In a statistically valid sample, CLA tested 60 general expenditures and 11 payroll expenditures. Of those tested: • 4 general expenditure items were found to be out of compliance with allowable activity and allowable costs provisions as the expenditures lacked adequate support and approval. • 32 general expenditure selections were for autopay transactions. These transactions were supported by the ED’s approval of the original initiation of the costs but there was a lack of documentation to show that further reviews were done to ensure the autopay was correctly entered into the payment system and continues to be properly paid and charged to the federal program. • 3 payroll expenditures lacked indication that the costs incurred for that employee and that time were approved. This was deemed to be an issue isolated to the timesheets of the ED. Cause: Due to lack of staffing at the executive level to perform review and document approval of expenditures to ensure they are allowable and are accurately charged to the federal program. Effect: Without adequate controls in place to ensure costs are reasonable and intended for the program charged, ICEDC could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that ICEDC is entitled to under the terms of the grant. Repeat Finding: No. Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence is retained by ICEDC as proof of oversight of expenditure of federal funds. Additionally, we recommend adding a review and approval process for the ED’s timesheets. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Organizations are required to retain the supporting documentation for determining whether an expenditure is an allowable cost under a federal grant and to ensure the cost was charged to the appropriate grant. In addition, § 200.303(a) requires organizations to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: ICEDC lacked sufficient controls to ensure all supporting documentation was kept for general expenditures, to show that expenditures paid through autopay were adequately reviewed, and to ensure a second party reviewed the Executive Director’s (ED’s) payroll charges. Questioned costs: Known Questioned Costs: $2,217 Likely Questioned Costs: $25,173 Context: In a statistically valid sample, CLA tested 60 general expenditures and 11 payroll expenditures. Of those tested: • 4 general expenditure items were found to be out of compliance with allowable activity and allowable costs provisions as the expenditures lacked adequate support and approval. • 32 general expenditure selections were for autopay transactions. These transactions were supported by the ED’s approval of the original initiation of the costs but there was a lack of documentation to show that further reviews were done to ensure the autopay was correctly entered into the payment system and continues to be properly paid and charged to the federal program. • 3 payroll expenditures lacked indication that the costs incurred for that employee and that time were approved. This was deemed to be an issue isolated to the timesheets of the ED. Cause: Due to lack of staffing at the executive level to perform review and document approval of expenditures to ensure they are allowable and are accurately charged to the federal program. Effect: Without adequate controls in place to ensure costs are reasonable and intended for the program charged, ICEDC could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that ICEDC is entitled to under the terms of the grant. Repeat Finding: No. Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence is retained by ICEDC as proof of oversight of expenditure of federal funds. Additionally, we recommend adding a review and approval process for the ED’s timesheets. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Organizations are required to retain the supporting documentation for determining whether an expenditure is an allowable cost under a federal grant and to ensure the cost was charged to the appropriate grant. In addition, § 200.303(a) requires organizations to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: ICEDC lacked sufficient controls to ensure all supporting documentation was kept for general expenditures, to show that expenditures paid through autopay were adequately reviewed, and to ensure a second party reviewed the Executive Director’s (ED’s) payroll charges. Questioned costs: Known Questioned Costs: $2,217 Likely Questioned Costs: $25,173 Context: In a statistically valid sample, CLA tested 60 general expenditures and 11 payroll expenditures. Of those tested: • 4 general expenditure items were found to be out of compliance with allowable activity and allowable costs provisions as the expenditures lacked adequate support and approval. • 32 general expenditure selections were for autopay transactions. These transactions were supported by the ED’s approval of the original initiation of the costs but there was a lack of documentation to show that further reviews were done to ensure the autopay was correctly entered into the payment system and continues to be properly paid and charged to the federal program. • 3 payroll expenditures lacked indication that the costs incurred for that employee and that time were approved. This was deemed to be an issue isolated to the timesheets of the ED. Cause: Due to lack of staffing at the executive level to perform review and document approval of expenditures to ensure they are allowable and are accurately charged to the federal program. Effect: Without adequate controls in place to ensure costs are reasonable and intended for the program charged, ICEDC could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that ICEDC is entitled to under the terms of the grant. Repeat Finding: No. Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence is retained by ICEDC as proof of oversight of expenditure of federal funds. Additionally, we recommend adding a review and approval process for the ED’s timesheets. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Organizations are required to retain the supporting documentation for determining whether an expenditure is an allowable cost under a federal grant and to ensure the cost was charged to the appropriate grant. In addition, § 200.303(a) requires organizations to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: ICEDC lacked sufficient controls to ensure all supporting documentation was kept for general expenditures, to show that expenditures paid through autopay were adequately reviewed, and to ensure a second party reviewed the Executive Director’s (ED’s) payroll charges. Questioned costs: Known Questioned Costs: $2,217 Likely Questioned Costs: $25,173 Context: In a statistically valid sample, CLA tested 60 general expenditures and 11 payroll expenditures. Of those tested: • 4 general expenditure items were found to be out of compliance with allowable activity and allowable costs provisions as the expenditures lacked adequate support and approval. • 32 general expenditure selections were for autopay transactions. These transactions were supported by the ED’s approval of the original initiation of the costs but there was a lack of documentation to show that further reviews were done to ensure the autopay was correctly entered into the payment system and continues to be properly paid and charged to the federal program. • 3 payroll expenditures lacked indication that the costs incurred for that employee and that time were approved. This was deemed to be an issue isolated to the timesheets of the ED. Cause: Due to lack of staffing at the executive level to perform review and document approval of expenditures to ensure they are allowable and are accurately charged to the federal program. Effect: Without adequate controls in place to ensure costs are reasonable and intended for the program charged, ICEDC could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that ICEDC is entitled to under the terms of the grant. Repeat Finding: No. Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence is retained by ICEDC as proof of oversight of expenditure of federal funds. Additionally, we recommend adding a review and approval process for the ED’s timesheets. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Organizations are required to retain the supporting documentation for determining whether an expenditure is an allowable cost under a federal grant and to ensure the cost was charged to the appropriate grant. In addition, § 200.303(a) requires organizations to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: ICEDC lacked sufficient controls to ensure all supporting documentation was kept for general expenditures, to show that expenditures paid through autopay were adequately reviewed, and to ensure a second party reviewed the Executive Director’s (ED’s) payroll charges. Questioned costs: Known Questioned Costs: $2,217 Likely Questioned Costs: $25,173 Context: In a statistically valid sample, CLA tested 60 general expenditures and 11 payroll expenditures. Of those tested: • 4 general expenditure items were found to be out of compliance with allowable activity and allowable costs provisions as the expenditures lacked adequate support and approval. • 32 general expenditure selections were for autopay transactions. These transactions were supported by the ED’s approval of the original initiation of the costs but there was a lack of documentation to show that further reviews were done to ensure the autopay was correctly entered into the payment system and continues to be properly paid and charged to the federal program. • 3 payroll expenditures lacked indication that the costs incurred for that employee and that time were approved. This was deemed to be an issue isolated to the timesheets of the ED. Cause: Due to lack of staffing at the executive level to perform review and document approval of expenditures to ensure they are allowable and are accurately charged to the federal program. Effect: Without adequate controls in place to ensure costs are reasonable and intended for the program charged, ICEDC could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that ICEDC is entitled to under the terms of the grant. Repeat Finding: No. Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence is retained by ICEDC as proof of oversight of expenditure of federal funds. Additionally, we recommend adding a review and approval process for the ED’s timesheets. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Organizations are required to retain the supporting documentation for determining whether an expenditure is an allowable cost under a federal grant and to ensure the cost was charged to the appropriate grant. In addition, § 200.303(a) requires organizations to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: ICEDC lacked sufficient controls to ensure all supporting documentation was kept for general expenditures, to show that expenditures paid through autopay were adequately reviewed, and to ensure a second party reviewed the Executive Director’s (ED’s) payroll charges. Questioned costs: Known Questioned Costs: $2,217 Likely Questioned Costs: $25,173 Context: In a statistically valid sample, CLA tested 60 general expenditures and 11 payroll expenditures. Of those tested: • 4 general expenditure items were found to be out of compliance with allowable activity and allowable costs provisions as the expenditures lacked adequate support and approval. • 32 general expenditure selections were for autopay transactions. These transactions were supported by the ED’s approval of the original initiation of the costs but there was a lack of documentation to show that further reviews were done to ensure the autopay was correctly entered into the payment system and continues to be properly paid and charged to the federal program. • 3 payroll expenditures lacked indication that the costs incurred for that employee and that time were approved. This was deemed to be an issue isolated to the timesheets of the ED. Cause: Due to lack of staffing at the executive level to perform review and document approval of expenditures to ensure they are allowable and are accurately charged to the federal program. Effect: Without adequate controls in place to ensure costs are reasonable and intended for the program charged, ICEDC could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that ICEDC is entitled to under the terms of the grant. Repeat Finding: No. Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence is retained by ICEDC as proof of oversight of expenditure of federal funds. Additionally, we recommend adding a review and approval process for the ED’s timesheets. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-003: Allowable Costs Information on the Federal Program: 97.024 - Emergency Food and Shelter National Board Program Type of Finding: Significant Deficiency in Internal Control over Compliance and Non-compliance Criteria: According to 2 CFR §200.303, 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). Condition: During our testing over credit cards, we noted that while there is a documented review and approval process in place over employee charges, there is no evidence to support the date in which the review was performed. Charges on the credit cards include expenditures that are reimbursed on federally funded awards. Cause: SAMU does not have a formal policy in place with respect to credit card receipt retention or review and approval over charges. As such, SAMU did not have effective internal controls in place to ensure that approvals were performed and documented as being performed in a timely manner.Effect or Potential Effect: There is the potential that credit card charges allocated to the Federal award were not properly reviewed in a timely manner, and could have been improperly charged or charged in the incorrect period, thereby creating a potential for being reimbursed for unallowable costs. Questioned Costs: None. Context: 372 out of 372 samples selected for testing did not have adequate documented review and approval. The sample is deemed representative of the population. Identification of a Repeat Finding: Not applicable. Recommendation: We recommend that SAMU implement a formal credit card policy. This policy should require that management formally review and approve employee credit card transactions and obtain appropriate supporting evidence for the charges on a monthly basis.
Finding 2023-005: Cash Management Information on the Federal Program: 97.024 - Emergency Food and Shelter National Board Program Type of Finding: Significant Deficiency in Internal Control over Compliance and Material Noncompliance Criteria: Under 2 CFR § 200.303, organizations that receive Federal funding are required to “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During the audit process, we noted 4 instances in which drawdown requests were submitted late, and outside of the time frame stipulated in the award agreement. Cause: It is our understanding that the delayed submissions were approved and discussed with the funder verbally. The approvals for delayed submission, since done verbally, were not adequately documented for review during the audit.Effect or Potential Effect: Without documented approvals for delayed submission of drawdown requests, SAMU risks being noncompliant with award terms and conditions. Questioned Costs: None. Context: 4 of 8 drawdown requests tested were not submitted timely as outlined in the agreement. The sample is representative of the population. Identification as a Repeat Finding, if Applicable: 2022-005 Recommendation: It is recommended that SAMU implement policies requiring that all verbal discussions with funders are supported by official documentation.
Finding 2023-006: Procurement Information on the Federal Program: 97.024 - Emergency Food and Shelter National Board Program Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold, 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that SAMU did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that while SAMU does have a procurement policy in place, the policy does not include requirements for re-procuring long-term contracts that continuously re-new. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as SAMU's internal procurement policy. Questioned Costs: $75,000 Context: 2 of 4 samples selected for testing did not have adequate documentation for the rationale related to the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The sample is representative of the population. Identification as a Repeat Finding, if Applicable: 2022-006 Recommendation: We recommend SAMU retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Finding 2023-008: Reporting Information on the Federal Program: 97.024 - Emergency Food and Shelter National Board Program Type of Finding: Significant Deficiency in Internal Control over Compliance and Material Noncompliance Criteria: According to 2 CFR §200.303, 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). Condition: During the audit, we noted that there is no documented review and approval of program reports prior to submission. In addition, we noted that the submission date of reports selected for review was not adequately documented. Cause: Management did not have effective internal controls in place to ensure that a secondary level of review of approval is clearly documented, which indicates who performed the control, and when the control was performed. In addition, program reports were submitted to the funder's online system, which SAMU no longer had access to during the audit. SAMU did not adequately retain internal documentation to support submission date of the reports outside of that system. Effect or Potential Effect: Without established controls over reporting, there is a reasonable possibility that SAMU would not detect noncompliance in the normal course of performing duties and correct them in a timely manner. Questioned Costs: None noted. Context: 4 of the 4 program reports selected for testing did not have documented evidence of review or approval. 4 of the 4 program reports and 1 of 1 final financial report selected for testing did not have documented evidence to support timely submission. Identification as a Repeat Finding, if Applicable: 2022-005 Recommendation: We recommend that management of SAMU implement procedures and control processes to incorporate and document an independent review and approval, evidenced by a signature/initialing and date of the review and approval taking place. In addition, management should ensure that internal documentation is retained to support submission date of reports.
2023-002 U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21. 027, Passed through the State of Nevada' s Department of Health and Human Services - Internal Control Systems over Compliance, Allowable Costs Criteria: As defined in 2 CFR 200.303, the auditee is required to maintain a system of internal control over compliance designed to provide reasonable assurance that federal award transactions executed are in compliance with the terms and conditions of the federal award. Condition: During our audit, we were informed that the Organization did not maintain evidence of the review of the allocation of time spent on federal grants by employees. Cause: The internal control system over the assessment of the allocation of allowable payroll costs was not operating effectively. Context: Evidence of the internal control over the review and allocation of payroll costs was not maintained. Effect: Lack of evidence of review of employee time spent working on federal grants for payroll costs reimbursed under the grants increases the risk that unallowable costs could be submitted for reimbursement. Recommendations: We recommend that management design and implement a system of internal controls whereby employees utilize a grant time tracking sheet reflecting the amount of employee time spent working towards each grant the Organization expends, that this sheet is reviewed by each employee's supervisor, and that proper documentation is maintained. Views of Responsible Officials: Management will ensure evidence of supervisor approval is obtained and maintained by January 2024
Finding 2023-001; Lack of Written Policies and Procedures Condition: The Organization does not have written policies and procedures in place for the administration and management of federal awards, as required by the Uniform Guidance (2 CFR Part 200). Specifically, the organization lacks documented procedures for financial management, internal controls, allowable costs, procurement, and other key operational areas. Criteria: According to 2 CFR § 200.302(b)(7), non-federal entities must have written procedures to implement the requirements of § 200.305 (Payment) and must maintain written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the federal award. Additionally, 2 CFR § 200.303 requires non-federal entities to establish and maintain effective internal controls, including written policies and procedures, to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: The absence of written policies and procedures appears to be due to a lack of awareness of the specific requirements under the Uniform Guidance, coupled with insufficient resources allocated to the development of these necessary internal controls. Effect: Without written policies and procedures, the Organization is at risk of non-compliance with federal regulations, which could lead to unallowable costs being charged to federal awards, inefficient or improper use of federal funds, and potential disallowance of costs during audits. This deficiency could also reduce the Organization's ability to ensure consistency and accountability in the management of federal funds. Recommendation: The Organization should develop and implement comprehensive written policies and procedures in accordance with the requirements of the Uniform Guidance. These should include, but not be limited to, the following areas: 1. Financial management, including procedures for payments and cash management. 2. Internal controls to ensure compliance with federal requirements. 3. Determination of allowable costs in accordance with federal regulations and the terms and conditions of the award. 4. Time and effort reporting and compensation. The Organization should also ensure that staff are adequately trained in these policies and procedures to enhance compliance and operational efficiency. Views of Responsible Officials of Auditee: In response to the finding, management will take action to develop and implement the necessary written policies and procedures by June 30, 2025. Comprehensive training will be provided to all relevant staff to ensure compliance with federal requirements.
2023-003 Special Tests and Provisions – Davis-Bacon Act Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Transportation Program: 20.205 Highway Planning and Construction Award Number and Year: 1030051; 2021 Pass-Through Agency: Minnesota Department of Transportation Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Davis-Bacon Act (23 U.S.C. § 113) and Title 29 U.S. Code of Federal Regulations Part 5 require that contractors and subcontractors performing work on federal contracts in excess of $2,000 pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits listed in the contract’s wage determination class. Each contractor and subcontractor must, on a weekly basis, provide a copy of the payrolls providing the information listed under payrolls and basic records of Title 29 U.S. Code of Federal Regulations § 5.5 (a)(3)(i) for the preceding weekly payroll period. Condition: Murray County did not obtain all required certified payroll reports for contracts that received federal funding in 2023. Questioned Costs: None. Context: The County did not obtain one of five certified payrolls selected for testing from the two contracts that received federal funding. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with the Davis-Bacon Act and Title 29 U.S. Code of Federal Regulations Part 5. Cause: Murray County indicated they did not have procedures in place to ensure all weekly summaries were received and reviewed. Recommendation: We recommend County staff obtain and properly review the certified payrolls received from all contractors and subcontractors for compliance with the Davis-Bacon Act and Title 29 U.S. Code of Federal Regulations Part 5 and ensure documentation exists to support monitoring of and compliance with this requirement. View of Responsible Official: Acknowledge
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the twenty-one (21) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Condition: Under 2 CFR part 180, the Organization is required to verify suspension or debarment from the excluded parties list system regarding compliance. Though the Organization did not have a policy for suspension and debarment, the Organization complied with the requirements. Effect: Not having a suspension and debarment policy may result in funds to be returned back to grantor and/or impact future funding. Cause: Supporting suspension and debarment documentation for the acquisition of property and services were not properly established in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned Costs: None Recommendation: We recommend the Organization strengthen its policies and procedures to ensure suspension and debarment is adequately documented that goods and services purchased in accordance with Uniform Guidance and other federal guidelines. In addition, the Organization should verify that all vendors under covered transactions are not listed on the excluded parties list system by performing a search on sam.gov and maintaining the results of such search in the vendor’s file.
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the twenty-one (21) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Condition: Under 2 CFR part 180, the Organization is required to verify suspension or debarment from the excluded parties list system regarding compliance. Though the Organization did not have a policy for suspension and debarment, the Organization complied with the requirements. Effect: Not having a suspension and debarment policy may result in funds to be returned back to grantor and/or impact future funding. Cause: Supporting suspension and debarment documentation for the acquisition of property and services were not properly established in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned Costs: None Recommendation: We recommend the Organization strengthen its policies and procedures to ensure suspension and debarment is adequately documented that goods and services purchased in accordance with Uniform Guidance and other federal guidelines. In addition, the Organization should verify that all vendors under covered transactions are not listed on the excluded parties list system by performing a search on sam.gov and maintaining the results of such search in the vendor’s file.
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the twenty-one (21) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Condition: Under 2 CFR part 180, the Organization is required to verify suspension or debarment from the excluded parties list system regarding compliance. Though the Organization did not have a policy for suspension and debarment, the Organization complied with the requirements. Effect: Not having a suspension and debarment policy may result in funds to be returned back to grantor and/or impact future funding. Cause: Supporting suspension and debarment documentation for the acquisition of property and services were not properly established in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned Costs: None Recommendation: We recommend the Organization strengthen its policies and procedures to ensure suspension and debarment is adequately documented that goods and services purchased in accordance with Uniform Guidance and other federal guidelines. In addition, the Organization should verify that all vendors under covered transactions are not listed on the excluded parties list system by performing a search on sam.gov and maintaining the results of such search in the vendor’s file.
2023-005 Reporting – PR29 – CDBG Cash on Hand Quarterly and Federal Funding and Accountability and Transparency Act Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Housing and Urban Development Program: 14.218 Community Development Block Grants/Entitlement Grants 14.218 COVID-19 – Community Development Block Grants/Entitlement Grants Pass-Through Agency: N/A - 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. The PR29 – CDBG Cash on Hand Quarterly report is a required quarterly report. The basis of accounting described in the directions is a cash basis. Also, the directions list accounts to be included in the reports, including program income accounts. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 U.S. Code of Federal Regulations, Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: In the sample of two quarterly PR29 – CDBG Cash on Hand Quarterly reports tested, errors were noted in both reports resulting from the County improperly including accruals in the reporting and not including all accounts, including those relating to program income. In addition, Ramsey County has not submitted subaward information in the FSRS as required by the FFATA for the Community Development Block Grant. Questioned Costs: None. Context: The PR29 – CDBG Cash on Hand Quarterly report is not used to claim reimbursement of federal funds. A subaward is any award provided by a pass-through entity to a subrecipient for the subrecipient to administer part of a federal award received by the pass-through entity. The FFATA issue was noted during the audit of the Community Development Block Grant; however, it impacts federal programs County-wide. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Ramsey County is not in compliance with the requirements for PR29 – CDBG Cash on Hand Quarterly or FFATA reporting. Cause: The County experienced staff turnover. In addition, the County missed HUD notifications that FFATA needed to be implemented. Recommendation: We recommend Ramsey County implement procedures to complete reports as required by HUD and ensure the correct accounting basis is used and all accounts are being included. We recommend Ramsey County implement procedures to complete reports required by FFATA. In addition, we recommend Ramsey County work with HUD on how best to correct PR29 – CDBG Cash on Hand Quarterly reporting. View of Responsible Official: Concur
2023-005 Reporting – PR29 – CDBG Cash on Hand Quarterly and Federal Funding and Accountability and Transparency Act Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Housing and Urban Development Program: 14.218 Community Development Block Grants/Entitlement Grants 14.218 COVID-19 – Community Development Block Grants/Entitlement Grants Pass-Through Agency: N/A - 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. The PR29 – CDBG Cash on Hand Quarterly report is a required quarterly report. The basis of accounting described in the directions is a cash basis. Also, the directions list accounts to be included in the reports, including program income accounts. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 U.S. Code of Federal Regulations, Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: In the sample of two quarterly PR29 – CDBG Cash on Hand Quarterly reports tested, errors were noted in both reports resulting from the County improperly including accruals in the reporting and not including all accounts, including those relating to program income. In addition, Ramsey County has not submitted subaward information in the FSRS as required by the FFATA for the Community Development Block Grant. Questioned Costs: None. Context: The PR29 – CDBG Cash on Hand Quarterly report is not used to claim reimbursement of federal funds. A subaward is any award provided by a pass-through entity to a subrecipient for the subrecipient to administer part of a federal award received by the pass-through entity. The FFATA issue was noted during the audit of the Community Development Block Grant; however, it impacts federal programs County-wide. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Ramsey County is not in compliance with the requirements for PR29 – CDBG Cash on Hand Quarterly or FFATA reporting. Cause: The County experienced staff turnover. In addition, the County missed HUD notifications that FFATA needed to be implemented. Recommendation: We recommend Ramsey County implement procedures to complete reports as required by HUD and ensure the correct accounting basis is used and all accounts are being included. We recommend Ramsey County implement procedures to complete reports required by FFATA. In addition, we recommend Ramsey County work with HUD on how best to correct PR29 – CDBG Cash on Hand Quarterly reporting. View of Responsible Official: Concur
2023-005 Reporting – PR29 – CDBG Cash on Hand Quarterly and Federal Funding and Accountability and Transparency Act Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Housing and Urban Development Program: 14.218 Community Development Block Grants/Entitlement Grants 14.218 COVID-19 – Community Development Block Grants/Entitlement Grants Pass-Through Agency: N/A - 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. The PR29 – CDBG Cash on Hand Quarterly report is a required quarterly report. The basis of accounting described in the directions is a cash basis. Also, the directions list accounts to be included in the reports, including program income accounts. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 U.S. Code of Federal Regulations, Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: In the sample of two quarterly PR29 – CDBG Cash on Hand Quarterly reports tested, errors were noted in both reports resulting from the County improperly including accruals in the reporting and not including all accounts, including those relating to program income. In addition, Ramsey County has not submitted subaward information in the FSRS as required by the FFATA for the Community Development Block Grant. Questioned Costs: None. Context: The PR29 – CDBG Cash on Hand Quarterly report is not used to claim reimbursement of federal funds. A subaward is any award provided by a pass-through entity to a subrecipient for the subrecipient to administer part of a federal award received by the pass-through entity. The FFATA issue was noted during the audit of the Community Development Block Grant; however, it impacts federal programs County-wide. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Ramsey County is not in compliance with the requirements for PR29 – CDBG Cash on Hand Quarterly or FFATA reporting. Cause: The County experienced staff turnover. In addition, the County missed HUD notifications that FFATA needed to be implemented. Recommendation: We recommend Ramsey County implement procedures to complete reports as required by HUD and ensure the correct accounting basis is used and all accounts are being included. We recommend Ramsey County implement procedures to complete reports required by FFATA. In addition, we recommend Ramsey County work with HUD on how best to correct PR29 – CDBG Cash on Hand Quarterly reporting. View of Responsible Official: Concur
2023-004 Eligibility Prior Year Finding Number: 2022-006 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.023 COVID-19 – Emergency Rental Assistance Program Pass-Through Agency: N/A - 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. The U.S. Department of the Treasury Frequently Asked Questions for Emergency Rental Assistance (ERA), revised July 27, 2022, requires grantees to obtain a current lease that identifies the unit where the applicant resides, to have support that an applicant is at risk of experiencing homelessness with a written attestation from the applicant or evidence of risk as determined by the grantee, have a reasonable basis for determining and redetermining income, and have documentation of the cost of any hotel or motel charged to the grant and the cost of the hotel or motel stay not include expenses incidental to the charge for the room. Title 2 U.S. Code of Federal Regulations § 200.403(g) requires costs to be adequately documented. In addition, the County’s Federal Emergency Program Guide for Tenant Application requires the County to obtain a written attestation if the Household has no qualifying income, or does not have documentation of all current income, and requires the County to use the Homeless Management Information System (HMIS) record when eligibility is based on homelessness. Condition: In a sample of 16 participant’s eligibility documentation tested, the following exceptions were detected: • For one participant, the address indicated on the ERA Request Form did not agree to the address included in the lease agreement. • Three participants did not have documentation to support that they were at risk of experiencing homelessness. • Three participants did not have documentation to support a reasonable basis for determining income. • Two participants did not have documentation to support a redetermination of income. • Three participants had instances where one-time payments, such as security deposits and application fees, were duplicated. • Thirteen participants did not have documentation originating from the hotel or shelter supporting payment amount and that incidental expenses were not included. • Eight participants had inconsistencies in the payment data provided between the participant name noted as the payee and the participant name noted as being applicable to in the transaction description. Questioned Costs: $140,822. Questioned costs are calculated based on payments to sampled participants. The amounts relating to costs that were not supported by adequate documentation at the time of the audit are $138,844, and amounts relating to duplicate payments are $1,978. These questioned costs were provided to a subrecipient that made the direct payments on behalf of participants. Context: The County had 80 total participants for the COVID-19 – Emergency Rental Assistance Program in 2023. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with requirements of the U.S. Department of the Treasury and the County’s Program Guide for Tenant Application. Cause: The County informed us that documentation could not be located, and that a number of staff who were involved in the program are no longer a part of the department. In addition, the County informed us that it had a contract in place with a consultant to assist the County in housing participants. However, no documentation was provided supporting detailed hotel expenses. Lastly, the County informed us that the inconsistencies in the payment data appears to have been clerical mistakes. Recommendation: We recommend the County maintain documentation supporting participant eligibility in a location accessible to County staff. In addition, we recommend the County obtain documentation originating from hotels or shelters in sufficient detail as to provide support for costs charged to the grant and verify incidental expenses are not included. View of Responsible Official: Concur