Finding 2023-001 - Controls Over Payroll Expenditures (Material Weakness) Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a)Be necessary and reasonable for the performance of the Federal award and be allocable thereto underthese principles. b)Conform to any limitations or exclusions set forth in these principles or in the Federal award as to typesor amount of cost items. c)Be consistent with policies and procedures that apply uniformly to both federally-financed and otheractivities of the non-Federal entity. d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if anyother cost incurred for the same purpose in like circumstances has been allocated to the Federal award asan indirect cost. e)Be determined in accordance with generally accepted accounting principles (GAAP), except, for stateand local governments and Indian tribes only, as otherwise provided for in this part. f)Not be included as a cost or used to meet cost sharing or matching requirements of any other federallyfinanced program in either the current or a prior period. g)Be adequately documented. h)Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. The Corporation should have controls in place to document that salaries and overtime paid with federal funds were allowable. Timecards supporting hours worked should be approved and pay rates reviewed. Condition and Context: A summary of allowable charges for the grant was prepared for submission. Within a sample of 45, we noted that 25 timecards did not have a documented review. Effect: Payroll expenditures could be inaccurately charged to the federal grant. Cause: Management noted that time is tracked in a spreadsheet and is reviewed but formal documentation of review is not maintained. Questioned Costs: None Identification as a repeat finding, if applicable: This is a repeat finding. Appeared as finding 2022-002 in the prior report. Recommendation: We recommend the Corporation maintain documented approval of all timecards. Views of responsible officials and planned corrective actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-001 - Controls Over Payroll Expenditures (Material Weakness) Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a)Be necessary and reasonable for the performance of the Federal award and be allocable thereto underthese principles. b)Conform to any limitations or exclusions set forth in these principles or in the Federal award as to typesor amount of cost items. c)Be consistent with policies and procedures that apply uniformly to both federally-financed and otheractivities of the non-Federal entity. d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if anyother cost incurred for the same purpose in like circumstances has been allocated to the Federal award asan indirect cost. e)Be determined in accordance with generally accepted accounting principles (GAAP), except, for stateand local governments and Indian tribes only, as otherwise provided for in this part. f)Not be included as a cost or used to meet cost sharing or matching requirements of any other federallyfinanced program in either the current or a prior period. g)Be adequately documented. h)Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. The Corporation should have controls in place to document that salaries and overtime paid with federal funds were allowable. Timecards supporting hours worked should be approved and pay rates reviewed. Condition and Context: A summary of allowable charges for the grant was prepared for submission. Within a sample of 45, we noted that 25 timecards did not have a documented review. Effect: Payroll expenditures could be inaccurately charged to the federal grant. Cause: Management noted that time is tracked in a spreadsheet and is reviewed but formal documentation of review is not maintained. Questioned Costs: None Identification as a repeat finding, if applicable: This is a repeat finding. Appeared as finding 2022-002 in the prior report. Recommendation: We recommend the Corporation maintain documented approval of all timecards. Views of responsible officials and planned corrective actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-001 - Controls Over Payroll Expenditures (Material Weakness) Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a)Be necessary and reasonable for the performance of the Federal award and be allocable thereto underthese principles. b)Conform to any limitations or exclusions set forth in these principles or in the Federal award as to typesor amount of cost items. c)Be consistent with policies and procedures that apply uniformly to both federally-financed and otheractivities of the non-Federal entity. d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if anyother cost incurred for the same purpose in like circumstances has been allocated to the Federal award asan indirect cost. e)Be determined in accordance with generally accepted accounting principles (GAAP), except, for stateand local governments and Indian tribes only, as otherwise provided for in this part. f)Not be included as a cost or used to meet cost sharing or matching requirements of any other federallyfinanced program in either the current or a prior period. g)Be adequately documented. h)Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. The Corporation should have controls in place to document that salaries and overtime paid with federal funds were allowable. Timecards supporting hours worked should be approved and pay rates reviewed. Condition and Context: A summary of allowable charges for the grant was prepared for submission. Within a sample of 45, we noted that 25 timecards did not have a documented review. Effect: Payroll expenditures could be inaccurately charged to the federal grant. Cause: Management noted that time is tracked in a spreadsheet and is reviewed but formal documentation of review is not maintained. Questioned Costs: None Identification as a repeat finding, if applicable: This is a repeat finding. Appeared as finding 2022-002 in the prior report. Recommendation: We recommend the Corporation maintain documented approval of all timecards. Views of responsible officials and planned corrective actions: Management agrees with the finding and has prepared a corrective action plan.
Type of Finding: Significant Deficiency in Internal Control over Compliance – Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Aging Cluster Assistance Listing Number: 93.044 / 93.045 / 93.053 Federal Award Identification Number and Year: DA23-1109-2023 Pass-Through Agency: City of Seattle Pass-Through Number(s): DA23-1109 Award Period: January 1, 2023 through December 31, 2023 Criteria or specific requirement: 2 CFR 200.303(a) states that a non-Federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 testing of reporting, it was noted that, for one sample, documentation was not retained of approval of financial reporting. Questioned costs: None Context: A sample of 9 financial reports was made from a population of 54 total reports. Of the 9 sampled, 1 was missing evidence of authorized personnel review and approval. Cause: In this one instance, verbal approval was given rather than via emailed approval. Effect: Without adequate documentation and controls in place to ensure costs are reasonable and intended for the program charged, Sound Generations could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that Sound Generations is entitled to under the terms of the grant. Repeat Finding: No. Recommendation: CLA recommends that documentation is retained as proof of authorized personnel review. Views of responsible officials: Please see the attached Management’s Corrective Action Plan.
Type of Finding: Significant Deficiency in Internal Control over Compliance – Activities Allowed or Unallowed, Allowable Costs / Cost Principles Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Aging Cluster Assistance Listing Number: 93.044 / 93.045 / 93.053 Federal Award Identification Number and Year: DA23-1109-2023, DA23-1176-2023 Pass-Through Agency: City of Seattle Pass-Through Number(s): DA23-1109, DA23-1176 Award Period: January 1, 2023 through December 31, 2023 Criteria or specific requirement: 2 CFR 200.303(a) states that a non-Federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 testing of payroll, it was noted that three employee's wages had been misallocated between contracts. These misallocations occurred due to clerical errors and inadequate monitoring and review of the allocation process. Questioned costs: None Context: A sample of 60 payroll samples were made from a population of over 250 individual employee paychecks. Of the 60 sampled, three samples had wages misallocated. The first was misallocated between the Community Dining and Meals on Wheels contracts. The second had misallocations between two funding sources under the Meals on Wheels contract. The third had misallocations between the Meals on Wheels contract and another funder. Cause: In one instance, a manual intervening calculation needed to be made to a normally automated process due to an illness at the executive level during time study updates. As a result of a clerical error, the allocations between the contracts were accidentally switched and the misallocation was not caught during review. In the remaining two instances, a formula error resulted in a misallocation of wages between funding sources. Effect: The misallocation of expenses could impact the accuracy of financial reporting for the major program and could result in noncompliance with federal regulations. Repeat Finding: No. Recommendation: CLA recommends that Sound Generations emphasize the importance of its procedures for monitoring and reviewing the allocation of wages between contracts and provide training to the individuals responsible for the allocation of expenses. Views of responsible officials: Please see the attached Management’s Corrective Action Plan.
Type of Finding: Significant Deficiency in Internal Control over Compliance – Activities Allowed or Unallowed, Allowable Costs / Cost Principles Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Aging Cluster Assistance Listing Number: 93.044 / 93.045 / 93.053 Federal Award Identification Number and Year: DA23-1109-2023, DA23-1176-2023 Pass-Through Agency: City of Seattle Pass-Through Number(s): DA23-1109, DA23-1176 Award Period: January 1, 2023 through December 31, 2023 Criteria or specific requirement: 2 CFR 200.303(a) states that a non-Federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 testing of payroll, it was noted that three employee's wages had been misallocated between contracts. These misallocations occurred due to clerical errors and inadequate monitoring and review of the allocation process. Questioned costs: None Context: A sample of 60 payroll samples were made from a population of over 250 individual employee paychecks. Of the 60 sampled, three samples had wages misallocated. The first was misallocated between the Community Dining and Meals on Wheels contracts. The second had misallocations between two funding sources under the Meals on Wheels contract. The third had misallocations between the Meals on Wheels contract and another funder. Cause: In one instance, a manual intervening calculation needed to be made to a normally automated process due to an illness at the executive level during time study updates. As a result of a clerical error, the allocations between the contracts were accidentally switched and the misallocation was not caught during review. In the remaining two instances, a formula error resulted in a misallocation of wages between funding sources. Effect: The misallocation of expenses could impact the accuracy of financial reporting for the major program and could result in noncompliance with federal regulations. Repeat Finding: No. Recommendation: CLA recommends that Sound Generations emphasize the importance of its procedures for monitoring and reviewing the allocation of wages between contracts and provide training to the individuals responsible for the allocation of expenses. Views of responsible officials: Please see the attached Management’s Corrective Action Plan.
Type of Finding: Significant Deficiency in Internal Control over Compliance – Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Aging Cluster Assistance Listing Number: 93.044 / 93.045 / 93.053 Federal Award Identification Number and Year: DA23-1109-2023 Pass-Through Agency: City of Seattle Pass-Through Number(s): DA23-1109 Award Period: January 1, 2023 through December 31, 2023 Criteria or specific requirement: 2 CFR 200.303(a) states that a non-Federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 testing of reporting, it was noted that, for one sample, documentation was not retained of approval of financial reporting. Questioned costs: None Context: A sample of 9 financial reports was made from a population of 54 total reports. Of the 9 sampled, 1 was missing evidence of authorized personnel review and approval. Cause: In this one instance, verbal approval was given rather than via emailed approval. Effect: Without adequate documentation and controls in place to ensure costs are reasonable and intended for the program charged, Sound Generations could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that Sound Generations is entitled to under the terms of the grant. Repeat Finding: No. Recommendation: CLA recommends that documentation is retained as proof of authorized personnel review. Views of responsible officials: Please see the attached Management’s Corrective Action Plan.
Type of Finding: Significant Deficiency in Internal Control over Compliance – Activities Allowed or Unallowed, Allowable Costs / Cost Principles Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Aging Cluster Assistance Listing Number: 93.044 / 93.045 / 93.053 Federal Award Identification Number and Year: DA23-1109-2023, DA23-1176-2023 Pass-Through Agency: City of Seattle Pass-Through Number(s): DA23-1109, DA23-1176 Award Period: January 1, 2023 through December 31, 2023 Criteria or specific requirement: 2 CFR 200.303(a) states that a non-Federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 testing of payroll, it was noted that three employee's wages had been misallocated between contracts. These misallocations occurred due to clerical errors and inadequate monitoring and review of the allocation process. Questioned costs: None Context: A sample of 60 payroll samples were made from a population of over 250 individual employee paychecks. Of the 60 sampled, three samples had wages misallocated. The first was misallocated between the Community Dining and Meals on Wheels contracts. The second had misallocations between two funding sources under the Meals on Wheels contract. The third had misallocations between the Meals on Wheels contract and another funder. Cause: In one instance, a manual intervening calculation needed to be made to a normally automated process due to an illness at the executive level during time study updates. As a result of a clerical error, the allocations between the contracts were accidentally switched and the misallocation was not caught during review. In the remaining two instances, a formula error resulted in a misallocation of wages between funding sources. Effect: The misallocation of expenses could impact the accuracy of financial reporting for the major program and could result in noncompliance with federal regulations. Repeat Finding: No. Recommendation: CLA recommends that Sound Generations emphasize the importance of its procedures for monitoring and reviewing the allocation of wages between contracts and provide training to the individuals responsible for the allocation of expenses. Views of responsible officials: Please see the attached Management’s Corrective Action Plan.
Type of Finding: Significant Deficiency in Internal Control over Compliance – Activities Allowed or Unallowed, Allowable Costs / Cost Principles Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Aging Cluster Assistance Listing Number: 93.044 / 93.045 / 93.053 Federal Award Identification Number and Year: DA23-1109-2023, DA23-1176-2023 Pass-Through Agency: City of Seattle Pass-Through Number(s): DA23-1109, DA23-1176 Award Period: January 1, 2023 through December 31, 2023 Criteria or specific requirement: 2 CFR 200.303(a) states that a non-Federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 testing of payroll, it was noted that three employee's wages had been misallocated between contracts. These misallocations occurred due to clerical errors and inadequate monitoring and review of the allocation process. Questioned costs: None Context: A sample of 60 payroll samples were made from a population of over 250 individual employee paychecks. Of the 60 sampled, three samples had wages misallocated. The first was misallocated between the Community Dining and Meals on Wheels contracts. The second had misallocations between two funding sources under the Meals on Wheels contract. The third had misallocations between the Meals on Wheels contract and another funder. Cause: In one instance, a manual intervening calculation needed to be made to a normally automated process due to an illness at the executive level during time study updates. As a result of a clerical error, the allocations between the contracts were accidentally switched and the misallocation was not caught during review. In the remaining two instances, a formula error resulted in a misallocation of wages between funding sources. Effect: The misallocation of expenses could impact the accuracy of financial reporting for the major program and could result in noncompliance with federal regulations. Repeat Finding: No. Recommendation: CLA recommends that Sound Generations emphasize the importance of its procedures for monitoring and reviewing the allocation of wages between contracts and provide training to the individuals responsible for the allocation of expenses. Views of responsible officials: Please see the attached Management’s Corrective Action Plan.
2023-002 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP2192; 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. Title 2 U.S. Code of Federal Regulations §2 CFR 200.403(a) and §2 CFR 200.403(g) require costs to be necessary and reasonable, and be adequately documented. Condition: The County did not obtain itemized documentation for five out of 22 disbursements tested. The amount of disbursements that did not have supporting documentation totaled $818,036. Questioned Costs: $818,036 Context: The County disbursed funds to cities and towns as non-entitlement units of government (NEU), however; the NEU designation only applies to states providing funds to local governments. The sample size was originally based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing and Single Audits, but was expanded to include four additional payments identified by the County as payments to NEUs. Effect: The County has insufficient documentation to demonstrate expenditures were for allowable activities and met the requirements of allowable costs. Cause: The County believed funds could be disbursed to cities and towns as NEUs. Because of this determination, the County did not obtain itemized support for expenditures incurred. Recommendation: We recommend Chisago County obtain itemized documentation related to grant expenditures to document expenditures were for allowable activities and met the requirements of allowable costs. View of Responsible Official: Acknowledge
2023-003 Suspension and Debarment Prior Year Finding Number: 2022-002 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 Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP2192; 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. Condition: For six of the eight 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 24 covered transactions during the year. The County provided funds to various cities, townships, and vendors which have operated for many years and were familiar to the County. 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 informed us there is a lack of staff available to check the covered transactions for suspension and debarment. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Acknowledge
Finding 2023-001 – Allowable Costs/Cost Principles, Internal Control Identification of the federal program Assistance listing number and title: 93.493 Congressional Directives Agency: U.S. Department of Health and Human Services Federal award identification number (FAIN): H79FG000881 Federal award year: 2022 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430(i)(1)(i) states that charges to Federal awards for salaries and wages must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. 2 CFR 200.430(i)(1)(v) also provides that salaries and wages must comply with the established accounting policies and practices of the non-Federal entity. Condition For four (4) of forty (40) payroll expenditures selected for testing, the System’s management did not perform the internal controls over the required allowability criteria. Cause The System failed to effectively implement controls over the required allowability criteria. Effect or potential effect Costs charged to Federal awards may be inaccurate, unallowable, or improperly allocated. Questioned costs None. Context From the population of payroll expenditures totaling $939,170, EY randomly selected 40 employees from different pay periods in 2023 totaling $94,279. Out of the 40 selections, 4 (or 10%) of employees’ timecards did not have evidence of manager’s review and approval of their time charged to the grant totaling $12,463 prior to processing payroll. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation We recommend management to implement effective internal controls over the allowability of costs charged to the federal program. Management must ensure that costs charged to the federal program are adequately documented and reviewed. Views of responsible officials Management will implement an additional review and approval process. Staff assigned to grant activities will provide a screenshot of their bi-weekly timecard to their manager for review and approval. Upon manager review, the document will be forwarded to the grant program leadership team for approval and documentation.
Finding 2023-002, Level of Effort, Internal Control and Noncompliance Identification of the federal program Assistance listing number and title: 93.493 Congressional Directives Agency: U.S. Department of Health and Human Services Federal award identification number (FAIN): H79FG000881, H79FG000989, H79FG000996 Federal Award Year: 2022, 2023 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Each of the Notices of Award (NOA) lists a specific key personnel (also called a Project Director) at a 25% level of effort. Furthermore, the NOAs state that organizations receiving federal funds may not exceed 100% level of effort for any program staff member across all federally funded sources. Any changes to key personnel including level of effort involving separation from the project for more than three months or a 25% reduction in time dedicated to the project requires prior approval and must be submitted as a post-award amendment in eRA Commons. Condition Sufficient evidence was not provided evidencing that the System complied with the 25% level of effort required for the key personnel and whether there were any changes were approved by the Federal agency. Cause The System failed to implement controls over the level of effort requirement. Management did not retain evidence to properly support the level of effort of key personnel. Effect or potential effect The key personnel level of effort required by the grant was not maintained and any changes in the said level of effort was not approved by the Federal agency. Questioned costs None, as the key personnel’s salaries and benefits were not charged to the Federal grant in 2023. Context EY reviewed the three (3) NOAs under the Federal grant and identified three (3) key personnel with a 25% level of effort. Supporting documentation such as timesheet tracking or level of effort certifications was not provided. As a result, the System was unable to substantiate that the required level of effort was met. Per inquiry, management believed that they did not need to substantiate the level of effort indicated in the NOAs because the Federal agency did not require reporting of such. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation Management should develop and implement internal controls to ensure that any level of effort listed in the grant award documents are documented and substantiated. Management should also obtain written communications from the Federal awarding agency for any clarifications they have on the provisions of the grant award documents. Views of responsible officials Management will implement effort tracking for all staff providing in-kind effort to any grant program. Documentation of time spent will be sent to grant management team bi-weekly for review and approval. Management will maintain electronic documentation of this review and approval in the grant files.
Finding 2023-003, Procurement, Suspension and Debarment, Internal Control and Noncompliance Identification of the federal program Assistance listing number and title: 93.493 Congressional Directives Agency: U.S. Department of Health and Human Services Federal award identification number (FAIN): H79FG000996 Federal Award Year: 2023 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.318 states that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.318 through 200.327. 2 CFR 200.320 discusses the methods of procurement to be followed for the acquisition of property or services required under a Federal award or sub-award. Part 3-I-1 of the 2023 OMB Compliance Supplement summarizes the regulation as follows: • Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). Criteria or specific requirement (including statutory, regulatory or other citation), continued • For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 2 CFR 200.214 provides that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition The System’s procurement policies did not conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.320, and the suspension and debarment requirements in 2 CFR Part 180. Cause The System’s procurement policies lack certain elements of federal procurement, suspension and debarment standards. Effect or potential effect Not having policies that are consistent with federal requirements could lead to procurements under federal awards being inappropriate, not adequately documented or entered into with covered entities. Questioned costs None. Context The System’s procurement policies did not conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.320. Specifically, the System’s procurement policies did not include a discussion of the criteria, thresholds and procedures to be followed for formal procurement methods (such as sealed bids and proposals), and for noncompetitive procurement. Further, the System’s vendor credentialing policy that is meant to address suspension and debarment requirements, includes a list of certain entities (such as academic institutions) that are exempted from the screening process. No such exemptions are provided for in 2 CFR Part 180. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation: Management should enhance its procurement policies to ensure that all Federal requirements on procurement, suspension and debarment are incorporated. Management must ensure that the policies are supported by effective internal control activities to ensure compliance with Federal requirements. Views of responsible officials Vendor review for suspension and disbarment was performed monthly for all but one vendor in accordance with current CHST policies and management was informed of any vendors with issues; however, documentation of clean vendors was not provided. Management will coordinate with appropriate departments to review federal provisions for grant procurement and adjust policies and procedures to comply. Management will work with appropriate departments and each grant team to document monthly suspension and disbarment review process. Grant teams will review all current sourcing and provide sole source documentation where applicable.
Finding 2023-005, Allowable Costs/Cost Principles and Period of Performance, Internal Control Identification of the federal program Assistance listing number and title: COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Agency: U.S. Department of Homeland Security Name of the pass-through entity: Texas Division of Emergency Management (TDEM) Federal award identification number (FAIN): 4485DRTXP0000001 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition For all expenditures selected for testing, sufficient evidence was not provided over the control of review of allowability of costs, and of whether the costs were incurred within the period of performance. Cause The System failed to effectively implement controls over the required criteria on allowability and period of performance. Effect or potential effect Costs charged to Federal awards may be inaccurate, unallowable, and incurred outside of the allowable period. Questioned costs None. Context From the population of expenditures amounting to $12,170,642, EY randomly selected 40 expenditures for testing of internal controls. All (or 100%) of the 40 selections totaling $218,630 did not have evidence of the review and approval performed over the allowability of costs and of whether they were incurred within the period of performance. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation We recommend management implement effective internal controls to ensure expenses are allowable under the awarded and incurred in the period of availability. Management must maintain documentation evidencing the controls. Views of responsible officials Management involved in this project performed the review of costs noting such costs were allowable and incurred in the proper period per the program requirements. No documentation of this review and approval was prepared. Management has implemented formal documentation processes to demonstrate that review and approval was performed.
Finding 2023-005, Allowable Costs/Cost Principles and Period of Performance, Internal Control Identification of the federal program Assistance listing number and title: COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Agency: U.S. Department of Homeland Security Name of the pass-through entity: Texas Division of Emergency Management (TDEM) Federal award identification number (FAIN): 4485DRTXP0000001 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition For all expenditures selected for testing, sufficient evidence was not provided over the control of review of allowability of costs, and of whether the costs were incurred within the period of performance. Cause The System failed to effectively implement controls over the required criteria on allowability and period of performance. Effect or potential effect Costs charged to Federal awards may be inaccurate, unallowable, and incurred outside of the allowable period. Questioned costs None. Context From the population of expenditures amounting to $12,170,642, EY randomly selected 40 expenditures for testing of internal controls. All (or 100%) of the 40 selections totaling $218,630 did not have evidence of the review and approval performed over the allowability of costs and of whether they were incurred within the period of performance. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation We recommend management implement effective internal controls to ensure expenses are allowable under the awarded and incurred in the period of availability. Management must maintain documentation evidencing the controls. Views of responsible officials Management involved in this project performed the review of costs noting such costs were allowable and incurred in the proper period per the program requirements. No documentation of this review and approval was prepared. Management has implemented formal documentation processes to demonstrate that review and approval was performed.
Finding 2023-005, Allowable Costs/Cost Principles and Period of Performance, Internal Control Identification of the federal program Assistance listing number and title: COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Agency: U.S. Department of Homeland Security Name of the pass-through entity: Texas Division of Emergency Management (TDEM) Federal award identification number (FAIN): 4485DRTXP0000001 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition For all expenditures selected for testing, sufficient evidence was not provided over the control of review of allowability of costs, and of whether the costs were incurred within the period of performance. Cause The System failed to effectively implement controls over the required criteria on allowability and period of performance. Effect or potential effect Costs charged to Federal awards may be inaccurate, unallowable, and incurred outside of the allowable period. Questioned costs None. Context From the population of expenditures amounting to $12,170,642, EY randomly selected 40 expenditures for testing of internal controls. All (or 100%) of the 40 selections totaling $218,630 did not have evidence of the review and approval performed over the allowability of costs and of whether they were incurred within the period of performance. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation We recommend management implement effective internal controls to ensure expenses are allowable under the awarded and incurred in the period of availability. Management must maintain documentation evidencing the controls. Views of responsible officials Management involved in this project performed the review of costs noting such costs were allowable and incurred in the proper period per the program requirements. No documentation of this review and approval was prepared. Management has implemented formal documentation processes to demonstrate that review and approval was performed.
Finding 2023-005, Allowable Costs/Cost Principles and Period of Performance, Internal Control Identification of the federal program Assistance listing number and title: COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Agency: U.S. Department of Homeland Security Name of the pass-through entity: Texas Division of Emergency Management (TDEM) Federal award identification number (FAIN): 4485DRTXP0000001 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition For all expenditures selected for testing, sufficient evidence was not provided over the control of review of allowability of costs, and of whether the costs were incurred within the period of performance. Cause The System failed to effectively implement controls over the required criteria on allowability and period of performance. Effect or potential effect Costs charged to Federal awards may be inaccurate, unallowable, and incurred outside of the allowable period. Questioned costs None. Context From the population of expenditures amounting to $12,170,642, EY randomly selected 40 expenditures for testing of internal controls. All (or 100%) of the 40 selections totaling $218,630 did not have evidence of the review and approval performed over the allowability of costs and of whether they were incurred within the period of performance. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation We recommend management implement effective internal controls to ensure expenses are allowable under the awarded and incurred in the period of availability. Management must maintain documentation evidencing the controls. Views of responsible officials Management involved in this project performed the review of costs noting such costs were allowable and incurred in the proper period per the program requirements. No documentation of this review and approval was prepared. Management has implemented formal documentation processes to demonstrate that review and approval was performed.
Finding 2023-005, Allowable Costs/Cost Principles and Period of Performance, Internal Control Identification of the federal program Assistance listing number and title: COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Agency: U.S. Department of Homeland Security Name of the pass-through entity: Texas Division of Emergency Management (TDEM) Federal award identification number (FAIN): 4485DRTXP0000001 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition For all expenditures selected for testing, sufficient evidence was not provided over the control of review of allowability of costs, and of whether the costs were incurred within the period of performance. Cause The System failed to effectively implement controls over the required criteria on allowability and period of performance. Effect or potential effect Costs charged to Federal awards may be inaccurate, unallowable, and incurred outside of the allowable period. Questioned costs None. Context From the population of expenditures amounting to $12,170,642, EY randomly selected 40 expenditures for testing of internal controls. All (or 100%) of the 40 selections totaling $218,630 did not have evidence of the review and approval performed over the allowability of costs and of whether they were incurred within the period of performance. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation We recommend management implement effective internal controls to ensure expenses are allowable under the awarded and incurred in the period of availability. Management must maintain documentation evidencing the controls. Views of responsible officials Management involved in this project performed the review of costs noting such costs were allowable and incurred in the proper period per the program requirements. No documentation of this review and approval was prepared. Management has implemented formal documentation processes to demonstrate that review and approval was performed.
Finding 2023-005, Allowable Costs/Cost Principles and Period of Performance, Internal Control Identification of the federal program Assistance listing number and title: COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Agency: U.S. Department of Homeland Security Name of the pass-through entity: Texas Division of Emergency Management (TDEM) Federal award identification number (FAIN): 4485DRTXP0000001 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition For all expenditures selected for testing, sufficient evidence was not provided over the control of review of allowability of costs, and of whether the costs were incurred within the period of performance. Cause The System failed to effectively implement controls over the required criteria on allowability and period of performance. Effect or potential effect Costs charged to Federal awards may be inaccurate, unallowable, and incurred outside of the allowable period. Questioned costs None. Context From the population of expenditures amounting to $12,170,642, EY randomly selected 40 expenditures for testing of internal controls. All (or 100%) of the 40 selections totaling $218,630 did not have evidence of the review and approval performed over the allowability of costs and of whether they were incurred within the period of performance. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation We recommend management implement effective internal controls to ensure expenses are allowable under the awarded and incurred in the period of availability. Management must maintain documentation evidencing the controls. Views of responsible officials Management involved in this project performed the review of costs noting such costs were allowable and incurred in the proper period per the program requirements. No documentation of this review and approval was prepared. Management has implemented formal documentation processes to demonstrate that review and approval was performed.
2023-002 Reporting Prior Year Finding Number: 2022-002 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: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1336; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Additionally, the U.S. Department of the Treasury requires an annual Project and Expenditure Report submitted for Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) that includes current period expenditures. Condition: The County incorrectly reported the full CSLFRF award amount of $6,484,839 as expenditures on the annual Project and Expenditure Report submitted to the U.S. Department of the Treasury for 2023 when they should have reported $615,436. The annual Project and Expenditure Report due in April 2023 was for the reporting period ending March 31, 2023. Questioned Costs: $5,869,403. Context: The County opted to spend the CSLFRF’s award under the Revenue Replacement category which allows spending on broader types of government services. Effect: Noncompliance with federal reporting requirements. Cause: County staff responsible for completing and submitting the Annual Project and Expenditure report misinterpreted the guidance and reported planned expenditures versus actual expenditures under revenue replacement. Recommendation: We recommend the County review U.S. Department of the Treasury guidance and form instructions to ensure the County is correctly reporting CSLFRF activity. View of Responsible Official: Concur
2023-003 Suspension and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1336; 2022 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 internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For two covered transactions tested, the verification for suspended or debarred vendors was not performed prior to entering into the covered transactions. Questioned Costs: None Context: The County entered into a total of 12 covered transactions for this grant during 2023. The County performed the SAM.gov search and obtained the suspension and debarment certifications from each contractor; however, these procedures were performed after the project was started. A 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 project started in March 2023, and the Board did not approve the Coronavirus State and Local Fiscal Recovery Funding for the project until August 2023. Recommendation: We recommend the County maintain documentation to demonstrate that vendors are not suspended, debarred, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur
Finding 2023-002 - Reporting: Federal Funding Accountability and Transparency Act ("FFATA") – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria 1. In accordance with 2 CFR Section 200.303, Internal controls, the non-Federal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2. Under the requirements of the FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, prime recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The prime recipient is required to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition 1. During our audit, we noted there was no evidence of review and approval by someone other than the preparer of the FFATA subawards that were submitted to the FSRS. 2. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 4 4 4 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $6,845,844 $6,845,844 $6,845,844 $0 $0 Cause 1. There is no formal policy in place requiring the CFO (or designee) to review and approve the FFATA reports before submission to the FSRS. 2. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Effect or Potential Effect 1. The condition could result in key data elements inaccurately reported and/or not supported by the source documentation. 2. The FFATA subawards were not submitted timely to the FSRS. Questioned Costs None. Context Four exceptions from a statistically valid sample of four. Identification as Repeat Finding 1. No 2. Yes (see prior year finding number 2022-001) Recommendation 1. We recommend that all FFATA reports be reviewed and approved by the CFO or designee and evidence of approval be maintained. 2. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Views of Responsible Officials As of September 1, 2023, BCHN implemented a workflow where FFATA information will be reported to the FSRS upon receipt of the Notices of Award. In addition, as of September 9, 2024, the FFATA report will be reviewed by someone other than the preparer prior to submission and evidence of the approval maintained.
Finding 2023-004 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria In accordance with 2 CFR Section 200.303, Internal controls, 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 audit, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding No. Recommendation We recommend that management put in place a formal policy requiring all timesheets and time and effort reports be approved by a direct supervisor and that evidence of that approval be retained. Views of Responsible Officials Effective immediately, a time and effort reporting policy was implemented and sent to all staff to ensure that staff follow the process. This policy will be reviewed with all new staff during new hire orientation and annually. Timesheets will be reviewed and approved by direct supervisors on a weekly basis. HR will send a reminder to all staff on a weekly basis to complete all missing time worked. Employees are responsible for updating the timesheet for each work week in Paylocity. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2023-002 - Reporting: Federal Funding Accountability and Transparency Act ("FFATA") – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria 1. In accordance with 2 CFR Section 200.303, Internal controls, the non-Federal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2. Under the requirements of the FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, prime recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The prime recipient is required to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition 1. During our audit, we noted there was no evidence of review and approval by someone other than the preparer of the FFATA subawards that were submitted to the FSRS. 2. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 4 4 4 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $6,845,844 $6,845,844 $6,845,844 $0 $0 Cause 1. There is no formal policy in place requiring the CFO (or designee) to review and approve the FFATA reports before submission to the FSRS. 2. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Effect or Potential Effect 1. The condition could result in key data elements inaccurately reported and/or not supported by the source documentation. 2. The FFATA subawards were not submitted timely to the FSRS. Questioned Costs None. Context Four exceptions from a statistically valid sample of four. Identification as Repeat Finding 1. No 2. Yes (see prior year finding number 2022-001) Recommendation 1. We recommend that all FFATA reports be reviewed and approved by the CFO or designee and evidence of approval be maintained. 2. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Views of Responsible Officials As of September 1, 2023, BCHN implemented a workflow where FFATA information will be reported to the FSRS upon receipt of the Notices of Award. In addition, as of September 9, 2024, the FFATA report will be reviewed by someone other than the preparer prior to submission and evidence of the approval maintained.
Finding 2023-004 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria In accordance with 2 CFR Section 200.303, Internal controls, 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 audit, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding No. Recommendation We recommend that management put in place a formal policy requiring all timesheets and time and effort reports be approved by a direct supervisor and that evidence of that approval be retained. Views of Responsible Officials Effective immediately, a time and effort reporting policy was implemented and sent to all staff to ensure that staff follow the process. This policy will be reviewed with all new staff during new hire orientation and annually. Timesheets will be reviewed and approved by direct supervisors on a weekly basis. HR will send a reminder to all staff on a weekly basis to complete all missing time worked. Employees are responsible for updating the timesheet for each work week in Paylocity. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2023-002 - Reporting: Federal Funding Accountability and Transparency Act ("FFATA") – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria 1. In accordance with 2 CFR Section 200.303, Internal controls, the non-Federal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2. Under the requirements of the FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, prime recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The prime recipient is required to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition 1. During our audit, we noted there was no evidence of review and approval by someone other than the preparer of the FFATA subawards that were submitted to the FSRS. 2. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 4 4 4 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $6,845,844 $6,845,844 $6,845,844 $0 $0 Cause 1. There is no formal policy in place requiring the CFO (or designee) to review and approve the FFATA reports before submission to the FSRS. 2. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Effect or Potential Effect 1. The condition could result in key data elements inaccurately reported and/or not supported by the source documentation. 2. The FFATA subawards were not submitted timely to the FSRS. Questioned Costs None. Context Four exceptions from a statistically valid sample of four. Identification as Repeat Finding 1. No 2. Yes (see prior year finding number 2022-001) Recommendation 1. We recommend that all FFATA reports be reviewed and approved by the CFO or designee and evidence of approval be maintained. 2. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Views of Responsible Officials As of September 1, 2023, BCHN implemented a workflow where FFATA information will be reported to the FSRS upon receipt of the Notices of Award. In addition, as of September 9, 2024, the FFATA report will be reviewed by someone other than the preparer prior to submission and evidence of the approval maintained.
Finding 2023-004 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria In accordance with 2 CFR Section 200.303, Internal controls, 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 audit, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding No. Recommendation We recommend that management put in place a formal policy requiring all timesheets and time and effort reports be approved by a direct supervisor and that evidence of that approval be retained. Views of Responsible Officials Effective immediately, a time and effort reporting policy was implemented and sent to all staff to ensure that staff follow the process. This policy will be reviewed with all new staff during new hire orientation and annually. Timesheets will be reviewed and approved by direct supervisors on a weekly basis. HR will send a reminder to all staff on a weekly basis to complete all missing time worked. Employees are responsible for updating the timesheet for each work week in Paylocity. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2023-002 - Reporting: Federal Funding Accountability and Transparency Act ("FFATA") – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria 1. In accordance with 2 CFR Section 200.303, Internal controls, the non-Federal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2. Under the requirements of the FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, prime recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The prime recipient is required to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition 1. During our audit, we noted there was no evidence of review and approval by someone other than the preparer of the FFATA subawards that were submitted to the FSRS. 2. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 4 4 4 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $6,845,844 $6,845,844 $6,845,844 $0 $0 Cause 1. There is no formal policy in place requiring the CFO (or designee) to review and approve the FFATA reports before submission to the FSRS. 2. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Effect or Potential Effect 1. The condition could result in key data elements inaccurately reported and/or not supported by the source documentation. 2. The FFATA subawards were not submitted timely to the FSRS. Questioned Costs None. Context Four exceptions from a statistically valid sample of four. Identification as Repeat Finding 1. No 2. Yes (see prior year finding number 2022-001) Recommendation 1. We recommend that all FFATA reports be reviewed and approved by the CFO or designee and evidence of approval be maintained. 2. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Views of Responsible Officials As of September 1, 2023, BCHN implemented a workflow where FFATA information will be reported to the FSRS upon receipt of the Notices of Award. In addition, as of September 9, 2024, the FFATA report will be reviewed by someone other than the preparer prior to submission and evidence of the approval maintained.
Finding 2023-004 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria In accordance with 2 CFR Section 200.303, Internal controls, 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 audit, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding No. Recommendation We recommend that management put in place a formal policy requiring all timesheets and time and effort reports be approved by a direct supervisor and that evidence of that approval be retained. Views of Responsible Officials Effective immediately, a time and effort reporting policy was implemented and sent to all staff to ensure that staff follow the process. This policy will be reviewed with all new staff during new hire orientation and annually. Timesheets will be reviewed and approved by direct supervisors on a weekly basis. HR will send a reminder to all staff on a weekly basis to complete all missing time worked. Employees are responsible for updating the timesheet for each work week in Paylocity. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Reporting Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 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. Additionally, 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services quarterly report has further guidance on what is allowed to be reported. Condition: There is no formal review being completed on reports that are required to be submitted to MN DHS. The quarterly 3220 LCTS and annual LCTS Collaborative reports were not reviewed. The annual LCTS Spending Report was submitted after the due date. The County reported $121,563 in disbursements on the 2556 Social Services quarterly report that were funded with other state or federal grants and included no revenue offset in the required line of the report. Questioned Costs: Amount less than $25,000. Context: No formal review is being completed on two of the four quarterly 3220 LCTS reports tested and one of one annual LCTS Collaborative report tested. For one of one annual LCTS Spending report, the report was submitted after the due date and a review was not in place to ensure compliance. Within two of the two 2556 Social Services quarterly reports that were tested, it was found that disbursements funded by other sources were included on the report. Cause: Turnover and lack of review of the requirements of the 2556 instructions by the County. Effect: Ineligible costs are being reported and the reports are not being submitted timely. Repeat Finding: No. Recommendation: We recommend that the County implement review procedures to ensure that the reports are submitted timely and accurately, and record of review is kept on file. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.
Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Reporting Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 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. Additionally, 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services quarterly report has further guidance on what is allowed to be reported. Condition: There is no formal review being completed on reports that are required to be submitted to MN DHS. The quarterly 3220 LCTS and annual LCTS Collaborative reports were not reviewed. The annual LCTS Spending Report was submitted after the due date. The County reported $121,563 in disbursements on the 2556 Social Services quarterly report that were funded with other state or federal grants and included no revenue offset in the required line of the report. Questioned Costs: Amount less than $25,000. Context: No formal review is being completed on two of the four quarterly 3220 LCTS reports tested and one of one annual LCTS Collaborative report tested. For one of one annual LCTS Spending report, the report was submitted after the due date and a review was not in place to ensure compliance. Within two of the two 2556 Social Services quarterly reports that were tested, it was found that disbursements funded by other sources were included on the report. Cause: Turnover and lack of review of the requirements of the 2556 instructions by the County. Effect: Ineligible costs are being reported and the reports are not being submitted timely. Repeat Finding: No. Recommendation: We recommend that the County implement review procedures to ensure that the reports are submitted timely and accurately, and record of review is kept on file. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.
2023 – 001 Federal Agency: US Department of Housing and Urban Development Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: January 1, 2023 through December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Subpart D 200.302 (1) and 200.303 (a) stipulates that the auditee must identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal programs and award identification shall include, as applicable, the ALN title and number, Federal award identification number and year, name of Federal agency, and name of the pass-through entity; establish and maintain effective internal control over Federal award that provides reasonable assurance that the auditee is managing Federal awards in compliance with Federal statutes, regulation, 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 Controller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee on Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Authority’s schedule of expenditures of federal awards (SEFA) did not include the expenditures related to the Coronavirus State and Local Fiscal Recovery Funds on the SEFA as required by Uniform Guidance for federal program 21.027. Questioned costs: None Context: During the review of revenue, this federal grant discovered and determined it was not reported on the SEFA. Cause: The Agency was not aware of the requirements to include these expenditures on the SEFA. Effect: The Authority was not in compliance with 2 CFR Subpart D 200.302 (1), 200.303 (a). The Agency’s program expenditures may be disallowed if the expenditures are not reported correctly on the SEFA. Repeat Finding: No Recommendation: We recommend that the Agency review current procedures for creating the SEFA to ensure that it is accurately reporting loan balances and expenditures during the year under audit for all federal programs to ensure compliance with Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services Pass-Through Entities: Ohio Department of Health Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds Award Period: 2023 Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Uniform Guidance 2 CFR Section 200.213 states, “Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities”. Condition: We identified the following matters during our testing of suspension and debarment control processes: a) A third-party vendor performed the suspension and debarment validation process for Akron Children’s. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. For most of 2023, Akron Children’s relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. b) Akron Children’s did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Akron Children’s to the third-party vendor. Cause: Akron Children’s did not have policies and procedures that require a validation of the third-party’s controls be performed to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match. In addition, Akron Children’s did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Akron Children’s screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Akron Children’s from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: None. Context: The federal portion of expenditures subject to suspension and debarment represents approximately 84% of total federal expenditures for the programs of $10,888,195 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is a repeat finding from the prior year – 2022-002, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response. Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Views of responsible officials: Akron Children's remediated these findings in the fourth quarter of 2023 by: 1) Implementing a periodic independent review of a sample of vendors sent to the third-party vendor to ensure that the processes employed by third-party vendor are accurate. 2) Developing a retention process for all vendor searches and file submissions to evidence compliance with the Federal regulations, including an independent review of the accuracy of file submissions. Further, a contract management system was installed in 2023 that holds the validation of new vendors as acceptable for federal procurements.
Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services Pass-Through Entities: Ohio Department of Health Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds Award Period: 2023 Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Uniform Guidance 2 CFR Section 200.213 states, “Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities”. Condition: We identified the following matters during our testing of suspension and debarment control processes: a) A third-party vendor performed the suspension and debarment validation process for Akron Children’s. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. For most of 2023, Akron Children’s relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. b) Akron Children’s did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Akron Children’s to the third-party vendor. Cause: Akron Children’s did not have policies and procedures that require a validation of the third-party’s controls be performed to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match. In addition, Akron Children’s did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Akron Children’s screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Akron Children’s from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: None. Context: The federal portion of expenditures subject to suspension and debarment represents approximately 84% of total federal expenditures for the programs of $10,888,195 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is a repeat finding from the prior year – 2022-002, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response. Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Views of responsible officials: Akron Children's remediated these findings in the fourth quarter of 2023 by: 1) Implementing a periodic independent review of a sample of vendors sent to the third-party vendor to ensure that the processes employed by third-party vendor are accurate. 2) Developing a retention process for all vendor searches and file submissions to evidence compliance with the Federal regulations, including an independent review of the accuracy of file submissions. Further, a contract management system was installed in 2023 that holds the validation of new vendors as acceptable for federal procurements.
Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services Pass-Through Entities: Ohio Department of Health Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds Award Period: 2023 Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Uniform Guidance 2 CFR Section 200.213 states, “Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities”. Condition: We identified the following matters during our testing of suspension and debarment control processes: a) A third-party vendor performed the suspension and debarment validation process for Akron Children’s. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. For most of 2023, Akron Children’s relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate. b) Akron Children’s did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Akron Children’s to the third-party vendor. Cause: Akron Children’s did not have policies and procedures that require a validation of the third-party’s controls be performed to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match. In addition, Akron Children’s did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. Effect or potential effect: Akron Children’s screening for suspension and debarment through the third-party vendor results may not be accurate. By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place. As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Akron Children’s from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program. Questioned costs: None. Context: The federal portion of expenditures subject to suspension and debarment represents approximately 84% of total federal expenditures for the programs of $10,888,195 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is a repeat finding from the prior year – 2022-002, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response. Recommendation: Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match. Views of responsible officials: Akron Children's remediated these findings in the fourth quarter of 2023 by: 1) Implementing a periodic independent review of a sample of vendors sent to the third-party vendor to ensure that the processes employed by third-party vendor are accurate. 2) Developing a retention process for all vendor searches and file submissions to evidence compliance with the Federal regulations, including an independent review of the accuracy of file submissions. Further, a contract management system was installed in 2023 that holds the validation of new vendors as acceptable for federal procurements.
Identification of the federal program: Federal Agencies: Department of Health, Health Resources and Services Administration (HRSA) Pass-Through Entities: None Assistance Listing No: 93.493 Congressional Directives Award Periods: 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: Management did not have a formal, documented internal control in place to review the allowability of the expenses to be allocated to the grant. Cause: Management did not have in place a formal, documented internal control to review the allowability of expenses to be charged to the grant. Effect or potential effect: A lack of internal controls over the review and approval of expenditures could result in unallowable expenses being charged to the federal award. Questioned costs: None. Context: We obtained email communication among Akron Children’s personnel discussing the types of costs to be submitted (construction costs) and that the general contractor expenses could be used. However, once these costs had been identified to be charged to the grant, management did not document a review of the allowability of these transactions. Total expenditures reported on the Schedule of Expenditures of Federal Awards for the year ended December 31, 2023 were $2,000,000. Identification as a repeat finding, if applicable: The finding is not a repeat finding from the prior year. Recommendation: Akron Children’s should put in place internal control procedures and retain evidence of review of expenditures charged to the grant to ensure the expenses are allowable. Views of responsible officials: Akron Children's will implement a more detailed review and documentation process for allowable expenses prior to determining expenses that are eligible for federal grant reimbursement.
Federal Agency: Department of Justice Federal Assistance Listing Number: 16.756 Program: Court Appointed Special Advocates Award Number: 15JDP-21-GK-02762-CASA Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with federal statues, regulations, and the terms and conditions of the federal award. In accordance with the requirements 2 CFR §1402.300(b), a non-federal entity is responsible for complying with all requirements of the federal award. For all federal awards, this includes the provisions of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “FFATA,” that are codified in 2 CFR Part 170, which includes requirements on executive compensation, and also requirements implementing the Act for the non-federal entity at 2 CFR part 25, Financial Assistance Use of Universal Identifier and System for Award Management, and 2 CFR part 170, Reporting Subaward and Executive Compensation Information. In accordance with 2 CFR Part 170, Appendix A, under FFATA, National CASA/GAL is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS). The subawards are required to be reported no later than the last day of the month following the month in which the subaward obligation was made or modified. Condition: During our testing of FFATA reporting, we selected a sample of ten subrecipient awards that were subject to FFATA. Seven out of ten awards subject to FFATA submission requirements were submitted after the last day of the month following the month in which the subaward obligation or amendment was made. For all samples tested, National CASA/GAL did not maintain the proper evidence over review or approval of the FFATA submissions. Cause: National CASA/GAL did not follow their documented policies and procedures to ensure compliance with the FFATA filing requirements. Effect or Potential Effect: National CASA/GAL could be exposed to a reduction or elimination of funds by the federal awarding agencies. Questioned Costs: None. Context: This is a condition identified based upon our review of National CASA/GAL’s compliance with specified requirements. For the Court Appointed Special Advocates Program, seven out of ten awards subject to FFATA selected for testing were submitted within one month of the required submission date. The sample was selected based on a non-statistical basis. The prevalence of these is detailed in the condition section above. Identification as a Repeat Finding: 2022-009. Recommendation: We recommend that reports are submitted timely with proper control procedures in place to ensure compliance with 2 CFR Section 200.303. Views of Responsible Officials: Management concurs with this finding. Management will add additional procedures to verify the appropriateness of submitted subrecipient information within their FFATA reporting packet. Management will additionally ensure FFATA reports are submitted within the required timeline.
Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §180.300 of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. This is done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: Home Forward is not in compliance with requirements related to suspension and debarment. Questioned costs: Unable to determine. Context: During our testing, it was noted that Home Forward did not review one of one vendors subject to the requirement prior to entering into a contract with the vendor to ensure the vendor did not have any active exclusion records. Cause: Home Forward did not anticipate spending federal funds under the contract. Effect: Home Forward is not in compliance with federal regulations that require verification to ensure that the business to which they have entered into a covered transaction is not excluded or disqualified, as specified in §180.300. Repeat Finding: No. Recommendation: We recommend Home Forward implements a process to ensure exclusion checks are done prior to the execution of a contract. This process should include a system to ensure documentation is maintained in the files evidencing the date of the exclusion check as well as documented review and approval of the results of the exclusion check by program staff. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Authority is required to establish a reasonable rent policy and ensure that policy is followed. Condition: During our testing, we noted Home Forward did not have adequate internal controls designed to ensure the approval of comparables is formally documented in the files. Questioned costs: Unable to determine. Context: During our testing, it was noted that Home Forward did not formally document approval of comparables in 4 of 40 files. Cause: Home Forward has not been consistent with keeping formal documentation of approval of comparables in the files. Effect: The auditor noted no instances of noncompliance with the provisions of special tests and provisions - reasonable rental rates; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No. Recommendation: We recommend Home Forward design controls to ensure formal documentation of approval of comparables is in the files. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specified requirement (including statutory, regulatory, or other citation: 2 CFR section 200.303 of the Uniform Guidance requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The 2 CFR section 200.303 indicates that the internal controls required to be established by a non-federal entity receiving federal awards 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. 2 CFR section 200.403 states the following: “Costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; (b) conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items; (c) be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity; (d) be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost; (e) be determined in accordance with generally accepted accounting principles; (f) not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period; (g) be adequately documented; and (h) cost must be incurred during the approved budget period.” Condition: The New York and Presbyterian Hospital (the Hospital) has processes and internal controls in place to ensure costs submitted to the Federal Emergency Management Agency (“FEMA”) in relation to the Disaster Grants – Public Assistance program were eligible under FEMA’s provisions and were allowable COVID-19-related expenses. These internal controls include ensuring completeness and accuracy of the costs to ensure the costs comply with the terms and conditions of the award. The Hospital’s internal controls did not identify that management inadvertently included certain costs in the FEMA reimbursement submission that were based on the invoiced amounts from a specific vendor that differed from the actual amounts paid by the Hospital. Cause: The Hospital’s internal controls did not identify that management inadvertently included certain costs in the FEMA reimbursement submission that were based on the invoiced amounts from a specific vendor that differed from the actual amounts paid by the Hospital. The difference was due to payment discount provisions utilized in accordance with a previously existing vendor agreement for one specific vendor, resulting in an overstatement of amounts included in the FEMA reimbursement request submitted in the Grants Portal. Additionally, through the Uniform Guidance audit procedures and management’s further review of submitted costs, duplicated items totaling approximately $184,400 were identified within the population of submitted costs. Effect or potential effect: Due to the above, there is a misstatement of the amounts reported in the FEMA reimbursement submission in the Grants Portal resulting in questioned costs of approximately $268,900. Questioned costs: Approximately $268,900, representing the difference between the amounts paid for certain invoices as compared to the amounts incorrectly submitted in the Grants Portal and certain duplicated items. Context: During our testing of FEMA expenditures underlying the grant for FEMA project number 140215, we identified expenditures that were paid at discounted amounts (in accordance with payment terms with a specific vendor) but included in the FEMA reimbursement submission in the Grants Portal at the full invoice amount, without consideration to the discount taken. The invoiced amounts exceeded the actual amounts paid by approximately $84,500. The terms and conditions of the FEMA award require recipients to submit eligible costs incurred limited to the amount paid, thus this issue results in questioned costs. Additionally, through the Uniform Guidance audit procedures and management’s further review of submitted costs, duplicated items totaling approximately $184,400 were identified within the population of submitted costs. The total FEMA expenditures for project number 140215 included on the Hospital’s schedule of expenditures of federal awards is $174.1 million, which includes $16.9 million related to the specific vendor for the payment-related issue described above. The FEMA-obligated amount under this grant is the third obligation for costs that the Hospital submitted to FEMA for reimbursement under this project. The project was initially established through FEMA’s optional expedited funding application and subsequently amended to a streamlined project under FEMA’s provisions; the amendment also extended the grant period beyond the initial ninety-day period of the original application to cover the period through July 1, 2022. The Hospital has adjusted for a portion of the questioned costs in a subsequent claim submission and management has indicated that they will follow this same process for the balance of the questioned cost items. Additionally, management anticipates that any reimbursement revisions, such as for the questioned costs described above, identified related to the third obligated amount will be addressed through the reconciliation of the overall project cost, inclusive of expected payments to the Hospital for additional eligible costs that have been submitted by the Hospital. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: Management should correct the cost summary schedule for this project during the reconciliation of the overall project cost, or address in another manner as directed by FEMA. Additionally, management should continue to review on an ongoing basis for similar costs included in the FEMA reimbursement submission for potential submission errors related to discounted amounts. View of responsible officials: Management agrees with the finding.
Criteria Per 2 CFR § 200.303, non-Federal entities are required to establish and maintain effective internal control over federal awards that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Our internal control testing revealed one instance in which the voucher package for one cash disbursement in the amount of $530,096 did not include documented review and approval by management prior to issuance of payment to the vendor. Effect Without proper review and approval by management prior to issuance of payment to vendors, the Corporation cannot provide reasonable assurance that the federal award has been managed in compliance with all applicable Federal statutes, regulations, and the terms and conditions of the federal award.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): PO 20011717 Pass-Through Entity: Indiana State Department of Health Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context The County Department of Health, a department within the County, was awarded the Health Issues and Challenges grant through the Indiana State Department of Health financed through the American Rescue Plan Act for the purpose of funding programs that focus on the improvement of chronic disease, specifically, elevated blood lead level reduction. The Health Issues and Challenges grant is a reimbursable grant, whereby the County received reimbursement on a per-case basis at a stated rate for Case Management and Environmental Investigation activities performed. The County Department of Health received federal receipts related to the grant in the amount of $130,479 during 2023. As part of sound management of the federal award, the County Department of Health was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The County Department of Health did not properly design or implement such a system. Receipts of the program were adequately identified through the use of an account number within the County Health Fund (285) in the County's ledger (ledger) which was unique to the Health Issues and Challenges grant receipts. However, the ledger did not adequately identify the expenditures of the grant program within the County Health Fund. Through inquiry with the County Department of Health employees and review of unit-prepared support of grant expenditures, we determined expenditures were made with grant funds during the audit period; however, we were unable to distinguish between the expenditures of the Health Issues and Challenges grant and all other activities of the County Department of Health in the County Health fund. Due to the lack of separate identification of expenditures in the financial records, we were not able to establish a population from which to audit the Health Issues and Challenges grant for compliance with the following compliance requirements of the program: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Procurement and Suspension and Debarment As such, the full award amount of $130,479, as reported on the Schedule of Expenditures of Federal Awards, was determined to be questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." Cause The County Department of Health was unable to differentiate expenditures made from federal and non-federal funds within its ledger for the Heath Issues and Challenges grant. Effect Without the proper implementation of an effectively designed system of internal controls, a population of expenditures associated with the Health Issues and Challenges grant could not be determined. As such, the County Department of Health cannot ensure nor can we determine that expenditures of the grant were not unallowable, within the proper period, and adhered to established practices and policies. Questioned Costs We identified $130,479 in known questioned costs as noted in the Condition and Context. Recommendation We recommended that management of the County Department of Health establish a system of internal controls to ensure that grant award funds are adequately accounted for and tracked in such a manner as to determine the activity, receipts, and disbursements associated with the grant. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): PO 20011717 Pass-Through Entity: Indiana State Department of Health Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context The County Department of Health, a department within the County, was awarded the Health Issues and Challenges grant through the Indiana State Department of Health financed through the American Rescue Plan Act (ARPA) for the purposes of funding programs that focus on the improvement of chronic disease, specifically, elevated blood lead level reduction. As part of sound management of the federal award, the County Department of Health was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The County Department of Health did not properly design or implement such a system. The County Department of Health was required to submit data through the online portal, National Electronic Disease Surveillance System (NEDSS) Base System (NBS), monthly beginning in October 2022. The submitted data included program specific metrics relating to patient case management of certified Elevated Blood Lead Levels (EBLLs). The County Department of Health was also required to ensure environmental investigation activities completed, including risk assessments and environmental inspections, were documented in the Indiana I-LEAD database monthly by a licensed Lead Risk Assessor. Environmental investigation activities performed by the County Department of Health were documented in the Indiana I-LEAD database by a licensed Lead Risk Assessor who was an employee of the County Department of Health. Similarly, case management activities performed were documented in the NEDSS Base System (NBS). Once activities were documented in the Indiana I-LEAD database and NBS systems, the activities were further documented in a spreadsheet by the Lead Risk Assessor (for I-LEAD activities) and the Case Management Coordinator (for NBS activities). The spreadsheet was reviewed by the Director of the Environmental Services Division and the Finance Director monthly. The Finance Director then used the spreadsheet to prepare the monthly reimbursement requests and sent the monthly reimbursement requests to the Indiana State Department of Health. We determined through inquiry with the Director of the Environmental Services Division and the Finance Director that while there was a review of the monthly spreadsheet, there was not a second review of the spreadsheet back to the activities reported in the Indiana I-LEAD database and NBS for accuracy. Additionally, the Finance Director prepared and submitted the reimbursement requests to the State without a second review or oversight process in place to prevent, or detect and correct, errors prior to submission. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not designed by management of the County Department of Health to ensure the state was provided with complete and accurate information related to the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds award. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect management's statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County Department of Health design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure reports are complete and accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context Recipients of COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) awards are required to submit quarterly or annually Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon the type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. Counties with a population that exceeds 250,000 residents are further required to submit annually a Recovery Plan Performance Report (RPPR). The RPPR provides the public and the Treasury with both retrospective and prospective information on the projects that recipients are undertaking or planning to undertake with program funding and how they are planning to ensure program outcomes are achieved in an effective, efficient, and equitable manner. The County was classified as a metropolitan county with a population that exceeds 250,000 residents. As such, quarterly P&E reports were to cover one calendar quarter and were to be submitted to the Treasury by the last day of the month following the end of the period covered. The annual RPPR was to be submitted to the Treasury by July 31, 2023. An employee of the Board of County Commissioners prepared and submitted the four required quarterly P&E reports during the audit period; however, there was no review or oversight process in place to prevent, or detect and correct, errors. Additionally, an employee of the Board of County Commissioners submitted the required annual RPPR during the audit period, which was compiled by a contracted vendor on the County's behalf. The vendor worked with the employee to get the necessary information to complete the report. Once complete, the report was provided to the employee, who then submitted the report without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of duties, over SLFRF reporting was not designed by the Board of County Commissioners in order to prevent, detect or correct, material noncompliance. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect management's statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Board of County Commissioners design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The County received a total COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation of $73,674,384 and chose to calculate its own revenue loss allowance, which totaled $35,932,557, to use for government services. Some SLFRF program funds expended in 2023 were expended under the revenue loss eligible use category. Additional program funds expended in 2023 were expended under the other eligible use categories. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For funds expended under the revenue loss eligible use category, the above listed procurement requirements do not apply. During the audit period, the County had four vendors with purchases over the $10,000 micropurchase threshold which were expended under an eligible use category other than revenue loss and, as such, were considered small purchase procurements. The County did not provide competitive price quotations for the small purchase procurements for three of the four vendors, which totaled $257,038. Suspension and Debarment Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During the engagement, an employee of the Board of County Commissioners stated that verification was completed by checking the Excluded Parties List System when covered transactions were entered into by the County to verify that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. Six covered transactions, totaling $3,952,203, were paid from SLFRF funds to six different vendors for goods or services that equaled or exceeded $25,000 during the audit period. Three of the six covered transactions were selected for testing. For all three transactions tested, documentation was not provided that the vendor's suspension and debarment status was verified. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . Cause The County was unable to provide documentation to demonstrate it had properly procured services. In addition, the County was unable to provide documentation to demonstrate it had checked the Excluded Parties List System, per the County's procedures, to ensure vendors were not suspended or debarred prior to entering into covered transactions that exceeded $25,000. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot demonstrate it obtained an adequate number of price or rate quotations prior to selecting a vendor. Therefore, the County could have overpaid for the services obtained. Furthermore, without the proper implementation of an effectively designed system of internal controls, the County cannot ensure the vendors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Board of County Commissioners strengthen the County's system of internal controls to ensure that an adequate number of price or rate quotations are obtained for small purchase procurements. Additionally, we recommended policies and procedures be strengthened to ensure appropriate supporting documentation for federal programs is retained. Lastly, we recommended that the Board of County Commissioners strengthen the County's system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context Procurement Policy Recipients may use award funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined for COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds. Policies and procedures for the procurement of the goods and services must be the County's own documented procedures which reflect applicable state and federal laws and regulations. INDIANA STATE BOARD OF ACCOUNTS 18 BARTHOLOMEW COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The County did not have documented procurement procedures or policies reflecting applicable state or federal laws and regulations for procuring goods and services paid with federal funds. Suspension and Debarment Prior to entering into subawards and covered transactions with the SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The County did not have any policies or procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded. A population of seven covered transactions, totaling $2,631,684, that equaled or exceeded $25,000 paid from SLFRF funds were identified. Four of the seven covered transactions, totaling $1,399,462, were selected for testing. For each of the four transactions, the County did not verify the vendors' suspension or debarment status prior to payment due to the County not having any policies or procedures in place to verify that contractors were neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities. The lack of intenral controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 19 BARTHOLOMEW COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The County did not have a procurement policy in place that contained the requirements of the procurement standards as outlined in the Code of Federal Regulations. Due to the timing of the adoption of the County's Suspension and Debarment Policy, which defines procedures to verify suspension and debarment status for covered transactions, the items selected for testing were not verified. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure that goods and services are appropriately procured and that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommend that management of the County strengthen its system of internal controls to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts. We also recommended strengthening its policies to reflect applicable state and federal laws and regulations for procuring goods and services paid with federal funds. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2023 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 20 BARTHOLOMEW COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a metropolitan county with a population below 250,000 residents that received an allocation of more than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds. As such, the initial P&E report, covering the period from March 3, 2021 to December 31, 2021, was required to be submitted to the Treasury by January 31, 2022. The subsequent quarterly reports were to cover one calendar quarter and must be submitted to the Treasury by the last day of the month following the end of the period covered. The County submitted all four P&E reports that were required during the audit period. Although a review process over the reports was in place, the internal controls were not effective and did not detect and allow corrections of errors in the reports. As a result, the following errors were noted: The current period expenditures were incorrectly reported on two of four reports. The current period expenditures were underreported by $70,309 and $13,090 in the Q4 2022 and Q3 2023 reports, respectively. The total cumulative expenditures were incorrectly reported on all four reports. The total cumulative expenditures were overreported by $174,750 in the Q4 2022 and Q1 2023 reports, and $19,204 in the Q3 2023 report. The total cumulative expenditures were underreported by $690,272 in the Q2 2023 report. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 21 BARTHOLOMEW COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Cause A proper system of internal controls was not designed or implemented by management of the County to prevent and detect errors on the P&E report prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the County did not report current period expenditures and total cumulative expenditures properly when filing the P&E reports for the quarterly reporting periods from October 1, 2022 to September 30, 2023. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. In addition, not meeting the SLFRF reporting requirements increases the likelihood that the public and the Treasury will not have access to transparent and accurate information regarding expenditures of federal awards. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County develop policies and procedures to ensure the County provides the Treasury with complete and accurate information for the P&E report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. INDIANA STATE BOARD OF ACCOUNTS 17 WHITE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with COVID-19 - Coronavirus State and Local Fiscal Recovery Funds award funds, recipients are required to verify that vendors are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The County's procedure to ensure vendors were not suspended or debarred was to add a clause to contracts for the vendor to certify they were not suspended or debarred. A population of five covered transactions was identified. Two covered transactions, totaling $1,710,669, were selected for testing. For both covered transactions tested, the contract utilized did not include a clause for suspension and debarment. No other procedures were performed for the two transactions, thus documentation to show that suspension and debarment was verified prior to entering into a covered transaction was not provided. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The County's system of internal controls as established by management did not take into account situations in which the County's contract template is not utilized or a formal contract is not required. INDIANA STATE BOARD OF ACCOUNTS 18 WHITE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The County's contract template was not utilized, and, therefore, the necessary suspension and debarment clause was not included. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable and the funding agency could potentially recover funds. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen their policies and procedures to include situations when their contract template is not utilized, or when a formal contract is not necessary so as to ensure that contractors paid $25,000 or more, all or in part with federal funds, are not suspended, debarred, or otherwise excluded prior to making payment or entering into a contract. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a county with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. As such, the P&E report covering the period from April 1, 2022 to March 31, 2023, was required to be submitted to the Treasury by April 30, 2023. The P&E report was submitted in April 2023, as required; however, there were no internal controls in place that would likely be effective in preventing, or detecting and correcting, noncompliance related to the P&E report. One employee prepared and submitted the report without evidence of an oversight or review process. The lack of internal controls was systemic issue throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 WHITE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The County did not implement a system of internal controls over reporting. Effect Without the proper implementation of an effectively designed system of internal controls, errors could occur and remain undetected. As such, the County cannot ensure that the reports submitted are materially accurate and correct. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls, including policies and procedures to ensure that the County provides the Treasury with complete and accurate information for the P&E report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.