Lack of Internal Control over Reporting Federal Agency: U.S. Department of Homeland Security, U.S. Department of Commerce, U.S. Department of the Interior. Federal Program: Research and Development Cluster ALN: 97.OPA, 11.427, 11.472, 15.654 and 15.945 Award Numbers: Coast Guard Authorization Act of 1996, 23-10-01, 22-10-13, 23-10-03, 20-10-04, NA20NMF4270158, NA17NMF4720018, NA22NMF4720078, NA22NMF4720201, NA19NMF4720069, P22AC01027 Award Years: None, 2023, 2022, 2023, 2020, 2020, 2017, 2022, 2022, 2019, and 2022, respectively Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Title 2 CFR 200.303 requires the Center to establish and maintain effective internal control over the federal award that provides reasonable assurance that the Center is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the grant awards. Title 2 CFR 170 states federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made and include information about each obligating action in accordance with submission instructions. Condition and Context: FY23 Federal Funding Accountability and Transparency Act (FFATA) subaward reporting for Long-Term Monitoring & Herring Research & Monitoring, Gulf Watch Alaska Research and Monitoring, and Sustainable Mariculture Development Programs did not occur for subawards. FFATA requires information on federal awards to be made available to the public via a single searchable website (www.usaspending.gov). The FFATA Subaward Reporting System (FSRS) is the reporting tool federal awardees use to capture and report subaward regarding first-tier subawards. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 9 9 0 0 0 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $2,190,391 $2,190,391 $0 $0 $0 Cause: Lack of internal control over reporting. Effect: Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding. Questioned Costs: None. Repeat Finding: This is not a repeat finding. We believe this to be a systemic issue. Recommendation: The Center should develop FFATA reporting policies and procedures to submit subaward award information through FSRS to ensure compliance with FFATA requirements. Management’s Response: Management agrees with this finding. See Corrective Action Plan. .
Identification of the Federal Program - Higher Education Emergency Relief Fund (HEERF) - Assistance Listing Numbers 84.425E, 84.425F, and 84.425M Criteria - The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) Section Act 314(e), and the American Rescue Plan (ARP) Section 2003 requires an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require. Per the instructions for the Quarterly Budget and Expenditure Reporting for all HEERF I, II, and III Grant Funds, an institution must specify the amount of expended HEERF I, II, and III funds for each funding category. 2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition - There was a lack of monitoring and appropriate review by the College of the Quarterly Budget and Expenditure Reporting for all HEERF I, II, and III Grant Funds. Effect - For the reporting period ended December 31, 2022, institutional expenditures of $71,280 were excluded from the report. Cause - The incorrect reporting is attributed to a lack of monitoring and appropriate review of the report by the College. Recommendation - The College should implement policies and procedures to monitor and review all reports. Views of Responsible Officials - The College agrees with the finding. The College will implement additional review procedures over grant reporting. The College will also revise and submit a corrected report.
Identification of the Federal Program - Higher Education Emergency Relief Fund (HEERF) - Assistance Listing Numbers 84.425E, 84.425F, and 84.425M Criteria - The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) Section Act 314(e), and the American Rescue Plan (ARP) Section 2003 requires an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require. Per the instructions for the Quarterly Budget and Expenditure Reporting for all HEERF I, II, and III Grant Funds, an institution must specify the amount of expended HEERF I, II, and III funds for each funding category. 2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition - There was a lack of monitoring and appropriate review by the College of the Quarterly Budget and Expenditure Reporting for all HEERF I, II, and III Grant Funds. Effect - For the reporting period ended December 31, 2022, institutional expenditures of $71,280 were excluded from the report. Cause - The incorrect reporting is attributed to a lack of monitoring and appropriate review of the report by the College. Recommendation - The College should implement policies and procedures to monitor and review all reports. Views of Responsible Officials - The College agrees with the finding. The College will implement additional review procedures over grant reporting. The College will also revise and submit a corrected report.
Identification of the Federal Program - Higher Education Emergency Relief Fund (HEERF) - Assistance Listing Numbers 84.425E, 84.425F, and 84.425M Criteria - The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) Section Act 314(e), and the American Rescue Plan (ARP) Section 2003 requires an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require. Per the instructions for the Quarterly Budget and Expenditure Reporting for all HEERF I, II, and III Grant Funds, an institution must specify the amount of expended HEERF I, II, and III funds for each funding category. 2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition - There was a lack of monitoring and appropriate review by the College of the Quarterly Budget and Expenditure Reporting for all HEERF I, II, and III Grant Funds. Effect - For the reporting period ended December 31, 2022, institutional expenditures of $71,280 were excluded from the report. Cause - The incorrect reporting is attributed to a lack of monitoring and appropriate review of the report by the College. Recommendation - The College should implement policies and procedures to monitor and review all reports. Views of Responsible Officials - The College agrees with the finding. The College will implement additional review procedures over grant reporting. The College will also revise and submit a corrected report.
Finding 2023‐001: U.S. Department of the Treasury Federal Financial Assistance Listing 21.027 COVID‐19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Controls over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The County’s reports submitted to the Department of Treasury were not reviewed and approved by a separate individual outside of the preparer. Cause: The County did not have an internal control process in place to ensure a secondary review and approval of the reports submitted to the Department of Treasury were performed by someone other than the preparer of the report. Effect: Without a secondary review and approval, there is a possibility that the report may not be accurately completed. Questioned Costs: None. Context / Sampling: For the Coronavirus State and Local Fiscal Recovery Funds, a nonstatistical sample of 2 out of 4 reports were tested. Repeat Finding from Prior Year: Yes, prior year finding 2022‐002 Recommendation: We recommend the County implement a control process which includes a secondary review and approval of the required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the noted finding. Refer to Corrective Action Plan.
Finding 2023‐003: U.S. Department of the Treasury Federal Financial Assistance Listing 21.027 COVID‐19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Procurement Suspension and Debarment Type of Finding: Significant Deficiency in Internal Controls over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Per 31 CFR 19.300, prior to enter in subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 31 CFR § 19.300. Condition: The County did not review two counselors to determine that they were not suspended, debarred, or otherwise excluded prior to entering into a transaction with them. Cause: The County relied on the Department of Public Safety FSCT clearinghouse and review of licensing for review of suspension for the two counselors, but did not review the counselors individually. Effect: Counselors could be suspended, debarred, or otherwise excluded, and the county would not be aware. Questioned Costs: None Context / Sampling: We tested 40 of 371 transactions subject to suspension and debarment in the SLFRF program. Repeat Finding from Prior Year: No Recommendation: The County should review all counselors for suspension and debarment similar to how they review all other vendors. Views of Responsible Officials: Management agrees with the noted finding. Refer to Corrective Action Plan.
Item 2023‐001 Special Tests and Provisions – Wage Rate Requirements (Repeat) Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Years ended September 30, 2021 (84.425U) and September 30, 2020 (84.425D) Criteria – Grantees should have controls in place to ensure that contractors and subcontractors are notified of the requirement to pay prevailing wage rates to all laborers and mechanics employed on construction contracts in excess of $2,000 financed by federal assistance funds and to submit weekly certified payrolls for each week in which contract work is performed. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR 200.326 and 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction (DOL Regulations) require the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). Condition – Adequate controls were not in place to ensure that contractors and subcontractors were notified of the requirements to comply with the wage rate requirements and to provide timely certified payrolls throughout the construction projects. Cause – A clause describing the Wage Rate Requirements was not added to the construction contracts. There was a lack of sufficient controls over the communication of this requirement to ensure the accuracy and completeness of the certified payrolls being provided to the Board. Effect – Lack of notification of the wage rate requirements to the contractors and subcontractors could lead to disallowed costs. We noted that certain payments to contractors selected for testing did not have supporting documentation of certified payrolls. However, our audit disclosed no instances of unallowable costs. Questioned Costs – $117,000. Recommendation – We recommend the strengthening of controls to ensure the prevailing wage rate clauses are included in the contracts and that certified payrolls are received for each week in which construction work is performed. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper prevailing wage rate clauses are added to construction contracts and certified payrolls are received each week in which construction work is performed.
Item 2023‐001 Special Tests and Provisions – Wage Rate Requirements (Repeat) Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Years ended September 30, 2021 (84.425U) and September 30, 2020 (84.425D) Criteria – Grantees should have controls in place to ensure that contractors and subcontractors are notified of the requirement to pay prevailing wage rates to all laborers and mechanics employed on construction contracts in excess of $2,000 financed by federal assistance funds and to submit weekly certified payrolls for each week in which contract work is performed. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR 200.326 and 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction (DOL Regulations) require the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). Condition – Adequate controls were not in place to ensure that contractors and subcontractors were notified of the requirements to comply with the wage rate requirements and to provide timely certified payrolls throughout the construction projects. Cause – A clause describing the Wage Rate Requirements was not added to the construction contracts. There was a lack of sufficient controls over the communication of this requirement to ensure the accuracy and completeness of the certified payrolls being provided to the Board. Effect – Lack of notification of the wage rate requirements to the contractors and subcontractors could lead to disallowed costs. We noted that certain payments to contractors selected for testing did not have supporting documentation of certified payrolls. However, our audit disclosed no instances of unallowable costs. Questioned Costs – $117,000. Recommendation – We recommend the strengthening of controls to ensure the prevailing wage rate clauses are included in the contracts and that certified payrolls are received for each week in which construction work is performed. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper prevailing wage rate clauses are added to construction contracts and certified payrolls are received each week in which construction work is performed.
2023-002 Federal Agency: U.S. Department of the Treasury Program/Cluster: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Pass-through: N/A Award No. and Year: N/A, 2022 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the review of required reports. Condition: We identified 1 instance in which the City did not document the review of the annual Project and Expenditure Report prior to submission. Cause: The report submission portal does not require an approval by an individual other than the individual that entered the report data. The City’s procedures did not include documenting the review by an individual other than the preparer. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted to the granting agency. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: 100% of the annual Project and Expenditure Reports were selected for testing. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed required reports prior to submission. Views of Responsible Officials and Planned Corrective Action: Management concurs with the finding. See separate corrective action plan.
2023-003 Federal Agency: U.S. Department of the Treasury Program/Cluster: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Pass-through: N/A Award No. and Year: N/A, 2022 Compliance Requirement: Procurement, suspension and debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Instance of Noncompliance Criteria: Per 2 CFR part 200, subpart D, section 200.303, the nonfederal entity 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 statues, regulations, and the terms and conditions of the federal award. Prior to entering into subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300. Condition: In 1 instance out of 4 procurements sampled, we could not evidence that management had reviewed the debarment status of a vendor at the time of entering into the contract/agreement, and the agreement did not include a clause regarding debarment status, nor did management obtain a certification of the vendor’s status from the vendor. Cause: The contract/agreement template used by the City did not include the debarment status clause, and management described that a debarment status check was performed on sam.gov at the time of entering into the agreement; however, the project manager overseeing the agreement who retained that documentation is no longer working for the City, and management could not locate the record of the debarment status check being performed. Effect: Entering into contracts with vendors could result in disbursement of Federal funds to suspended or debarred parties. Questioned Costs: None noted. Context/Sampling: A nonstatistical sample of 4 out of 8 contracts were selected. We found that none of the selected vendors were suspended or debarred. Repeat Finding from Prior Year: No. Recommendation: We recommend that the City review its procedures for retaining documentation evidencing the debarment status verifications performed for contracts and agreements through sam.gov. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See separate corrective action plan.
2023-002 GRANT REPORTING U.S. Department of Housing and Urban Development ALN 14.228 – Community Development Block Grants Contract No. IR052 (2022) Passed through the Florida Department of Commerce Criteria: Section (8) of the agreement with the Florida Department of Commerce (DOC), formerly referred to as the Florida Department of Economic Opportunity (DEO), specifies requirements for the submission of monthly, quarterly and administrative reports and other required information. These reports are detailed in Attachment G to the agreement. Section (18) of the agreement with the DOC requires the City to comply with procurement standards in 2 CFR Section 200.318 – 200.327 and Section 200.330. The agreement further requires the City to provide the DOC copies of all proposed procurement documents for their review and approval prior to the obligation or disbursement of any funds (except for administrative expenses). 2 CFR 200.303(a) requires non-Federal entities to establish and maintain effective internal controls over compliance with laws and regulations applicable to Federal funding. Condition: The Audit Certification Memo for fiscal year 2022 (due June 30, 2023) and the Section 3 Summary Report (due July 31, 2023) were not filed with the DOC. Further, the Contract and Subcontract Activity report (due on April 15, 2023) was not filed timely (filed September 7, 2023). With regards to the reimbursement request, the initial reporting was rejected due to noncompliance with procurement provisions in the grant agreement. As a result, the DOC denied $74,813 of the City’s request as ineligible expenditures. Cause of condition: The City did not have effective controls in place to ensure that all required reports were submitted on a timely basis to the DOC; nor were effective controls in place to ensure that only vendors that had been procured in accordance with the provisions of the grant agreement were included in the reimbursement request. Potential effect of condition: The City is not in compliance with the reporting requirements set forth by the grantor, nor with the procurement requirements set forth in the contract. Perspective: The City has been in communication with the DOC regarding the Section 3 requirements to assist the City and its contractor to better understand the qualitative efforts needed for hiring and recruitment of Section 3 workers. These communications have been documented on the monthly progress reports submitted to the DOC. Further, the City is in the process of negotiating an amendment to the grantor agreement. An unexecuted draft of this agreement includes language that removes the requirement for the City to file semi-annual Contract and Subcontract Activity forms, replacing them with a close-out report due at completion of the project. The proposed amendment also includes language that will require the Section 3 Summary Report to be filed quarterly rather than annually. With regards to the reimbursement request, the City resubmitted the reimbursement request subsequent to year-end to exclude the vendor identified as ineligible by the DOC. The expenditures reported on the 2023 SEFA were adjusted to reflect only eligible expenditures. Questioned costs: None. Recommendation: The City should review and revise, as needed, its current control structure over grant reporting to ensure that all required reports are prepared, independently reviewed and remitted to the grantor on a timely basis. Once the City obtains an executed amendment to the agreement, the City should update its controls to ensure the changes to the grant reporting are incorporated into their procedures. While reviewing grant agreements prior to being signed, the program manager should coordinate with the Finance Department to ensure that the City has controls in place over compliance with procurement provisions contained in the grant agreement. Management’s Response: The City has filled a position focused mainly on projects and grants reporting. The employee will verify all grant requirements are fulfilled on time and according to the grant contract. Processes are being put in place that will include conversations with the project manager which will ensure they are notified of the necessary steps to fulfill the requirements, as well as final Finance review to ensure compliance.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR 200.313 equipment acquired under a Federal award must be properly managed and proper records must be maintained. These records must contain information pertaining to Federal awards including description of property, serial number or other identification number, source of funding, title, acquisition date and cost of property, condition, ultimate disposition date including disposal, sales price and inventory. A physical inventory of the property must be taken and reconciled at least every two years, control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property, adequate maintenance procedures must be developed to keep the property in good conditions. Per 2 CFR Section 200.303(a) 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: The County did not maintain accurate and updated equipment inventory listings for equipment purchased with Federal funds in accordance with 2 CFR 200.313. Questioned costs: None Context: The County’s equipment inventory listing of equipment purchased with grant funds was not maintained in a manner that complied with 2 CFR 200.313 during the year. An inventory listing that complied with 2 CFR 200.313 was prepared once it was requested during the audit. Additionally, for one of eight equipment items selected for testing from the inventory listing, the equipment serial number did not agree with the equipment inventory listing for that equipment’s location. Cause: The County did not have formal policies and procedures in place to manage and maintain equipment inventor records in compliance with 2 CFR 200.313. Effect: The County was not in compliance with the equipment compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County expand upon their capital asset inventory policies and procedures that are used for financial statement purposes to ensure that all equipment purchased with Federal funds are properly managed and maintained throughout the year to ensure all information, including the serial number and equipment location, is accurate and updated. We also recommend that the program personnel responsible for equipment records certify accuracy of the equipment records throughout the year. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR 200.313 equipment acquired under a Federal award must be properly managed and proper records must be maintained. These records must contain information pertaining to Federal awards including description of property, serial number or other identification number, source of funding, title, acquisition date and cost of property, condition, ultimate disposition date including disposal, sales price and inventory. A physical inventory of the property must be taken and reconciled at least every two years, control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property, adequate maintenance procedures must be developed to keep the property in good conditions. Per 2 CFR Section 200.303(a) 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: The County did not maintain accurate and updated equipment inventory listings for equipment purchased with Federal funds in accordance with 2 CFR 200.313. Questioned costs: None Context: The County’s equipment inventory listing of equipment purchased with grant funds was not maintained in a manner that complied with 2 CFR 200.313 during the year. An inventory listing that complied with 2 CFR 200.313 was prepared once it was requested during the audit. Additionally, for one of eight equipment items selected for testing from the inventory listing, the equipment serial number did not agree with the equipment inventory listing for that equipment’s location. Cause: The County did not have formal policies and procedures in place to manage and maintain equipment inventor records in compliance with 2 CFR 200.313. Effect: The County was not in compliance with the equipment compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County expand upon their capital asset inventory policies and procedures that are used for financial statement purposes to ensure that all equipment purchased with Federal funds are properly managed and maintained throughout the year to ensure all information, including the serial number and equipment location, is accurate and updated. We also recommend that the program personnel responsible for equipment records certify accuracy of the equipment records throughout the year. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR 200.313 equipment acquired under a Federal award must be properly managed and proper records must be maintained. These records must contain information pertaining to Federal awards including description of property, serial number or other identification number, source of funding, title, acquisition date and cost of property, condition, ultimate disposition date including disposal, sales price and inventory. A physical inventory of the property must be taken and reconciled at least every two years, control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property, adequate maintenance procedures must be developed to keep the property in good conditions. Per 2 CFR Section 200.303(a) 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: The County did not maintain accurate and updated equipment inventory listings for equipment purchased with Federal funds in accordance with 2 CFR 200.313. Questioned costs: None Context: The County’s equipment inventory listing of equipment purchased with grant funds was not maintained in a manner that complied with 2 CFR 200.313 during the year. An inventory listing that complied with 2 CFR 200.313 was prepared once it was requested during the audit. Additionally, for one of eight equipment items selected for testing from the inventory listing, the equipment serial number did not agree with the equipment inventory listing for that equipment’s location. Cause: The County did not have formal policies and procedures in place to manage and maintain equipment inventor records in compliance with 2 CFR 200.313. Effect: The County was not in compliance with the equipment compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County expand upon their capital asset inventory policies and procedures that are used for financial statement purposes to ensure that all equipment purchased with Federal funds are properly managed and maintained throughout the year to ensure all information, including the serial number and equipment location, is accurate and updated. We also recommend that the program personnel responsible for equipment records certify accuracy of the equipment records throughout the year. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR 200.313 equipment acquired under a Federal award must be properly managed and proper records must be maintained. These records must contain information pertaining to Federal awards including description of property, serial number or other identification number, source of funding, title, acquisition date and cost of property, condition, ultimate disposition date including disposal, sales price and inventory. A physical inventory of the property must be taken and reconciled at least every two years, control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property, adequate maintenance procedures must be developed to keep the property in good conditions. Per 2 CFR Section 200.303(a) 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: The County did not maintain accurate and updated equipment inventory listings for equipment purchased with Federal funds in accordance with 2 CFR 200.313. Questioned costs: None Context: The County’s equipment inventory listing of equipment purchased with grant funds was not maintained in a manner that complied with 2 CFR 200.313 during the year. An inventory listing that complied with 2 CFR 200.313 was prepared once it was requested during the audit. Additionally, for one of eight equipment items selected for testing from the inventory listing, the equipment serial number did not agree with the equipment inventory listing for that equipment’s location. Cause: The County did not have formal policies and procedures in place to manage and maintain equipment inventor records in compliance with 2 CFR 200.313. Effect: The County was not in compliance with the equipment compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County expand upon their capital asset inventory policies and procedures that are used for financial statement purposes to ensure that all equipment purchased with Federal funds are properly managed and maintained throughout the year to ensure all information, including the serial number and equipment location, is accurate and updated. We also recommend that the program personnel responsible for equipment records certify accuracy of the equipment records throughout the year. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR 200.313 equipment acquired under a Federal award must be properly managed and proper records must be maintained. These records must contain information pertaining to Federal awards including description of property, serial number or other identification number, source of funding, title, acquisition date and cost of property, condition, ultimate disposition date including disposal, sales price and inventory. A physical inventory of the property must be taken and reconciled at least every two years, control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property, adequate maintenance procedures must be developed to keep the property in good conditions. Per 2 CFR Section 200.303(a) 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: The County did not maintain accurate and updated equipment inventory listings for equipment purchased with Federal funds in accordance with 2 CFR 200.313. Questioned costs: None Context: The County’s equipment inventory listing of equipment purchased with grant funds was not maintained in a manner that complied with 2 CFR 200.313 during the year. An inventory listing that complied with 2 CFR 200.313 was prepared once it was requested during the audit. Additionally, for one of eight equipment items selected for testing from the inventory listing, the equipment serial number did not agree with the equipment inventory listing for that equipment’s location. Cause: The County did not have formal policies and procedures in place to manage and maintain equipment inventor records in compliance with 2 CFR 200.313. Effect: The County was not in compliance with the equipment compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County expand upon their capital asset inventory policies and procedures that are used for financial statement purposes to ensure that all equipment purchased with Federal funds are properly managed and maintained throughout the year to ensure all information, including the serial number and equipment location, is accurate and updated. We also recommend that the program personnel responsible for equipment records certify accuracy of the equipment records throughout the year. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR 200.313 equipment acquired under a Federal award must be properly managed and proper records must be maintained. These records must contain information pertaining to Federal awards including description of property, serial number or other identification number, source of funding, title, acquisition date and cost of property, condition, ultimate disposition date including disposal, sales price and inventory. A physical inventory of the property must be taken and reconciled at least every two years, control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property, adequate maintenance procedures must be developed to keep the property in good conditions. Per 2 CFR Section 200.303(a) 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: The County did not maintain accurate and updated equipment inventory listings for equipment purchased with Federal funds in accordance with 2 CFR 200.313. Questioned costs: None Context: The County’s equipment inventory listing of equipment purchased with grant funds was not maintained in a manner that complied with 2 CFR 200.313 during the year. An inventory listing that complied with 2 CFR 200.313 was prepared once it was requested during the audit. Additionally, for one of eight equipment items selected for testing from the inventory listing, the equipment serial number did not agree with the equipment inventory listing for that equipment’s location. Cause: The County did not have formal policies and procedures in place to manage and maintain equipment inventor records in compliance with 2 CFR 200.313. Effect: The County was not in compliance with the equipment compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County expand upon their capital asset inventory policies and procedures that are used for financial statement purposes to ensure that all equipment purchased with Federal funds are properly managed and maintained throughout the year to ensure all information, including the serial number and equipment location, is accurate and updated. We also recommend that the program personnel responsible for equipment records certify accuracy of the equipment records throughout the year. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR 200.313 equipment acquired under a Federal award must be properly managed and proper records must be maintained. These records must contain information pertaining to Federal awards including description of property, serial number or other identification number, source of funding, title, acquisition date and cost of property, condition, ultimate disposition date including disposal, sales price and inventory. A physical inventory of the property must be taken and reconciled at least every two years, control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property, adequate maintenance procedures must be developed to keep the property in good conditions. Per 2 CFR Section 200.303(a) 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: The County did not maintain accurate and updated equipment inventory listings for equipment purchased with Federal funds in accordance with 2 CFR 200.313. Questioned costs: None Context: The County’s equipment inventory listing of equipment purchased with grant funds was not maintained in a manner that complied with 2 CFR 200.313 during the year. An inventory listing that complied with 2 CFR 200.313 was prepared once it was requested during the audit. Additionally, for one of eight equipment items selected for testing from the inventory listing, the equipment serial number did not agree with the equipment inventory listing for that equipment’s location. Cause: The County did not have formal policies and procedures in place to manage and maintain equipment inventor records in compliance with 2 CFR 200.313. Effect: The County was not in compliance with the equipment compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County expand upon their capital asset inventory policies and procedures that are used for financial statement purposes to ensure that all equipment purchased with Federal funds are properly managed and maintained throughout the year to ensure all information, including the serial number and equipment location, is accurate and updated. We also recommend that the program personnel responsible for equipment records certify accuracy of the equipment records throughout the year. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR 200.313 equipment acquired under a Federal award must be properly managed and proper records must be maintained. These records must contain information pertaining to Federal awards including description of property, serial number or other identification number, source of funding, title, acquisition date and cost of property, condition, ultimate disposition date including disposal, sales price and inventory. A physical inventory of the property must be taken and reconciled at least every two years, control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property, adequate maintenance procedures must be developed to keep the property in good conditions. Per 2 CFR Section 200.303(a) 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: The County did not maintain accurate and updated equipment inventory listings for equipment purchased with Federal funds in accordance with 2 CFR 200.313. Questioned costs: None Context: The County’s equipment inventory listing of equipment purchased with grant funds was not maintained in a manner that complied with 2 CFR 200.313 during the year. An inventory listing that complied with 2 CFR 200.313 was prepared once it was requested during the audit. Additionally, for one of eight equipment items selected for testing from the inventory listing, the equipment serial number did not agree with the equipment inventory listing for that equipment’s location. Cause: The County did not have formal policies and procedures in place to manage and maintain equipment inventor records in compliance with 2 CFR 200.313. Effect: The County was not in compliance with the equipment compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County expand upon their capital asset inventory policies and procedures that are used for financial statement purposes to ensure that all equipment purchased with Federal funds are properly managed and maintained throughout the year to ensure all information, including the serial number and equipment location, is accurate and updated. We also recommend that the program personnel responsible for equipment records certify accuracy of the equipment records throughout the year. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under 2 CFR 200.313 equipment acquired under a Federal award must be properly managed and proper records must be maintained. These records must contain information pertaining to Federal awards including description of property, serial number or other identification number, source of funding, title, acquisition date and cost of property, condition, ultimate disposition date including disposal, sales price and inventory. A physical inventory of the property must be taken and reconciled at least every two years, control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property, adequate maintenance procedures must be developed to keep the property in good conditions. Per 2 CFR Section 200.303(a) 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: The County did not maintain accurate and updated equipment inventory listings for equipment purchased with Federal funds in accordance with 2 CFR 200.313. Questioned costs: None Context: The County’s equipment inventory listing of equipment purchased with grant funds was not maintained in a manner that complied with 2 CFR 200.313 during the year. An inventory listing that complied with 2 CFR 200.313 was prepared once it was requested during the audit. Additionally, for one of eight equipment items selected for testing from the inventory listing, the equipment serial number did not agree with the equipment inventory listing for that equipment’s location. Cause: The County did not have formal policies and procedures in place to manage and maintain equipment inventor records in compliance with 2 CFR 200.313. Effect: The County was not in compliance with the equipment compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County expand upon their capital asset inventory policies and procedures that are used for financial statement purposes to ensure that all equipment purchased with Federal funds are properly managed and maintained throughout the year to ensure all information, including the serial number and equipment location, is accurate and updated. We also recommend that the program personnel responsible for equipment records certify accuracy of the equipment records throughout the year. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of the Transportation Federal Program Name: National Infrastructure Investments Assistance Listing Number: 20.933 Federal Award Identification Number and Year: 693JJ32040007 - 2020 Award Period: 08/03/2020 – 10/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance; Material Noncompliance (Modified Opinion) Criteria or specific requirement: Under Davis-Bacon Act - 40 U.S.C. §§ 3141, et seq., as applicable under 23 U.S.C. 113, prevailing wage requirements each contractor must submit weekly certified payrolls to the contracting agency or entity certified payrolls providing information for each covered worker. Each certified payroll must be accompanied by a "Statement of Compliance" certifying compliance with applicable requirements. Per 2 CFR Section 200.303(a) 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: The County did not obtain, maintain, or review certified payrolls as required for special provisions Davis Bacon Act for all vendors. Questioned costs: None Context: For two out of the eight payrolls selected for testing, the County did not properly obtain and review certified payrolls provided by subcontractor. The certifications were subsequently collected and reviewed when they were selected for audit testing. Cause: The County did not follow its policies, procedures and internal controls related to obtaining and reviewing certified payrolls from vendors. Effect: The County was not in compliance with the special provision compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County to implement a process and to update its policies and procedures to ensure that all certified payrolls are properly verified and maintained accurately through grant award period and beyond. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: CDBG – Entitlement Grants Cluster Assistance Listing Number: 14.218 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or specific requirement: Under reporting for Federal Funding Accountability and Transparency Act (FFATA) requires awardees such as prime contractors and subcontractors to file a FFATA subaward report by the end of the month following the month in which the prime contractor awards or prime grant recipient is awarded any subcontract or grant greater than $30,000. Per 2 CFR Section 200.303(a) 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: The County did submit FFATA reports after grant award or grant award modifications were made by the dates required. Questioned costs: None Context: For three out of the five FFATA reports selected for testing, the County submitted reports after the due date. Cause: The County’s internal controls did not prevent or detect the noncompliance. Effect: The County was not in compliance with the reporting compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County strengthen policies and procedures to ensure that reporting due dates are adhered to as required by the Federal regulations and that internal processes mirror the requirements of the Federal regulations. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: CDBG – Entitlement Grants Cluster Assistance Listing Number: 14.218 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or specific requirement: Under reporting for Federal Funding Accountability and Transparency Act (FFATA) requires awardees such as prime contractors and subcontractors to file a FFATA subaward report by the end of the month following the month in which the prime contractor awards or prime grant recipient is awarded any subcontract or grant greater than $30,000. Per 2 CFR Section 200.303(a) 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: The County did submit FFATA reports after grant award or grant award modifications were made by the dates required. Questioned costs: None Context: For three out of the five FFATA reports selected for testing, the County submitted reports after the due date. Cause: The County’s internal controls did not prevent or detect the noncompliance. Effect: The County was not in compliance with the reporting compliance requirements of the program. Repeat Finding: No Recommendation: We recommend the County strengthen policies and procedures to ensure that reporting due dates are adhered to as required by the Federal regulations and that internal processes mirror the requirements of the Federal regulations. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name - 21.023, U.S. Department of the Treasury, COVID-19 - Emergency Rental Assistance Federal Award Identification Number and Year - ERA2-0476 Pass-through Entity - N/A - Direct funded Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities 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 - The County’s controls over general ledger to schedule of expenditures of federal awards (SEFA) and beneficiary payment database reconciliation did not identify several adjustments that were needed to both the general ledger and the SEFA. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there are no questioned costs Context - The County’s controls to track and reconcile grant activities between the general ledger and SEFA were not adequate to identify all grant activity. As a result, the following adjustments were necessary for the year ended September 30, 2023: • Approximately $550,000 adjustment to record beneficiary payments on the SEFA • Approximately $160,000 adjustment to accrue for subrecipient activity in the general ledger Cause and Effect - The controls in place to ensure that the SEFA and beneficiary payment database reconciled to the general ledger were not effective. As a result, an audit adjustment was posted to the general ledger to record approximately $550,000 of beneficiary payments that was included in the SEFA and beneficiary payment database but not the general ledger. Additionally, the SEFA was initially understated by approximately $160,000 as a result of the County not accruing for its subrecipient activity through September 30, 2023. The SEFA was adjusted to include this amount. Recommendation - We recommend that the County review its processes and controls to ensure that grant activity is properly tracked, properly accounted for in the general ledger, and fully reconciled between the beneficiary database, general ledger, and SEFA to ensure completeness and accuracy of the SEFA. Views of Responsible Officials and Planned Corrective Actions - Management will update processes and controls to ensure completeness of grant activity is received for review and reconciliation.
Assistance Listing Number, Federal Agency, and Program Name 20.509, U.S. Department of Transportation, Formula Grants for Rural Areas Federal Award Identification Number and Year MI 2020 008 07 Pass through Entity Michigan Department of Transportation (MDOT) Finding Type Material weakness Repeat Finding No Criteria As outlined in 2 CFR 200.303, the Authority should have internal controls in place to ensure the accuracy of reimbursement requests submitted to the State. Condition Currently one person prepares the reimbursement requests and no one reviews them for accuracy prior to submitting the requests to the State through the Operating Assistance Report (OAR) for reimbursement. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context During our testing of the internal controls related to cash management, Plante & Moran, PLLC noted that there is no independent review of reimbursement requests prepared and submitted to the State by the Authority. Plante & Moran, PLLC did note, through our testing, that the amounts requested for reimbursement did tie to the expenditures recorded in the general ledger for the samples we selected, and, therefore, there are no questioned costs. Cause and Effect Internal control procedures related to compliance with cash management did not exist during the year, which could have resulted in an error on the reimbursement request that did not get caught. Plante & Moran, PLLC did not note any errors on the samples selected for testing. Recommendation Internal control procedures should be implemented to ensure all reimbursement requests are reviewed by an individual who is not charged with preparing those same source documents. Views of Responsible Officials and Planned Corrective Actions Management will identify a new process for OAR assignment and submission. Currently, the OARs are prepared and submitted by the CFO due to staffing limitations. Nevertheless, the CFO will work to identify an individual within the finance department who has the skill set and capacity to prepare the OARs for CFO review prior to submission.
Information on Federal Program: Texas Department of Emergency Management Disaster Grants – Public Assistance (Presidentially Declared Disasters) Criteria or Specific Requirement: 2 CFR 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. Condition: For the $6,525,090 expenditures recorded in the year ended September 30, 2023, of which $174,257 related to the year ended September 30, 2022. Questioned Cost: There are no questioned costs related to this finding. Context: In the testing of total incurred expenditures of $6,525,090 for the year ended September 30, 2023, expenditure of $174,257 should be included in the schedule of expenditures of federal awards for the year ended September 30, 2022. Effect: The failure to maintain the complete schedule of expenditures of federal awards may result in an inaccurate submission to the grantor which can lead to noncompliance with laws and regulations. Cause: The Park Board failed to maintain the complete schedule of expenditures of federal awards. Recommendation: We recommend that the Park Board maintain the complete schedule of expenditures of federal awards. Management Response: We agree with the finding. The procedure of maintaining the complete schedule of expenditures of federal awards will be implemented in fiscal year 2024.
Condition Management did not report the total federal awards expended during the year under audit. Subsequent to issuance of the September 30, 2023 financial statements, management was made aware by the awarding agency that funds the Authority received were federal awards and had federal compliance requirements. Criteria Part 200, Uniform Guidance section 200.303 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 terms and conditions of the federal awards. 45 CFR Part 75 Subpart F requires that a non-federal entity that expends $750,000 or more during the entity's fiscal year in federal awards must have a single audit and that the entity must prepare a schedule of expenditures of federal awards for the period covered by the entity's financial statements which must include the total federal awards expended. Cause The member of management responsible for reporting federal awards was unaware that funds received were a sub-award of federal award from a non-federal entity and, therefore, certified a submission to the federal audit clearinghouse that was not complete and accurate. Effect Potential material noncompliance with federal compliance requirements. Questioned Costs There are no questioned costs associated with finding. Context The award was issued in the form of one check which the Authoirty immediately remitted to a federal project partner for the Authority's share of the project local match. Historically, the Authority has had adequate internal controls over compliance of federal awards. Had the member of management responsible for reporting federal awards been aware of the federal award status of the funds they likely would have reported a complete and accruate schedule of expenditures of federal awards. Repeat Finding This is not a repeat finding. Recommendation The Authority should establish documented controls and a review process for funds received that includes a signed agreement detailing the Authority's responsibilities in relation to the funding and identifying the individuals responsible for meeting responsibility requirements. View of Responsible Officials and Planned Corrective Actions The Authority concurs with the finding and has provided a response in the Corrective Action Plan.
Finding 2023-001 – Significant deficiency in reporting for lack of submitting required documentation to HRSA for previously reported Provider Relief Funds Identification of the federal program: Assistance Listing Number 93.498: • COVID-19 – Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution • U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) • Federal award identification number – Not Applicable • Federal award year –Period 5: January 1, 2020 to June 30, 2023 Criteria or specific requirement: 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: The University of Vermont Medical Center, Inc. (UVMMC) submitted $22,723,309 in expenditures to the HRSA Provider Relief Fund (PRF) portal for reporting period 1. Subsequently, in March 2022, management opted to submit those same expenditures to an alternate federal funding source and the expenditures were ultimately obligated and reimbursed, thus making them unallowable under HRSA guidelines. For PRF purposes, management determined that UVMMC had sufficient lost revenues to cover the Period 1 PRF receipts in place of the newly unallowable expenditures in line with HRSA guidance (as described in HRSA’s frequently asked questions available on the HRSA website). HRSA guidance requires maintenance of appropriate documentation to support deductions of expenditures from prior reporting periods (as adjustments cannot be made retroactively within the HRSA portal). While this change in expenditure reimbursement approach was extensively discussed and approved by the appropriate level of UVMMC personnel, documentation of this change was not prepared or retained by management until later in June 2023. HRSA guidelines would require management to submit such documentation in their most current PRF submission, however, management failed to notify HRSA of the change and did not attach appropriate documentation in their Period 3 through Period 5 submissions, nor did management attempt to notify HRSA via other means. Cause: Management represented that they performed a review and approval of PRF submissions; however, supporting documentation to evidence the change in reimbursement approach was not appropriately provided to HRSA. Effect or potential effect: A deficiency in the design of internal controls over the review and approval of PRF submissions resulted in management failing to submit supporting documentation notifying HRSA for changes in the expenditure reimbursement approach when they were known. Questioned costs: None. Context: Management prepared an internal memorandum to document the change in expenditure reimbursement approach for Period 1 receipts, however, management failed to include documentation of the change in their subsequent PRF submissions when known. Identification as a repeat finding, if applicable: No. Recommendation: Management should reassess its internal controls over the review and approval of PRF reports to ensure the submission of all required information per HRSA guidelines. Views of responsible individuals: Management agrees and has reassessed its internal controls over the review and approval of PRF submissions. The Network has now completed all PRF portal submissions and this program is coming to an end.
2023-002 Grant Payroll Documentation and Recordkeeping Federal Agency: U.S Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP3404 - 2021 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria: Compliance: 2 CFR 200.302(b)(3) states that records that identify adequately the source and application of funds for federally-funded 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. 2 CFR 200.403 states that costs must be adequately documented. Controls: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply 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: The County did not maintain documentation supporting certain payroll expenditures charged to the grant. Questioned Costs: Under $25,000. Context: For four of the sixty employee pays selected for testing the underlying payroll records did not support the amount charged to the grant. Cause: Payroll documentation supporting the wage amounts charged to the grant program was not properly maintained by the County. Effect: Failure to maintain supporting documentation to the employee payroll charged to grant programs may result in unallowed cost and activities being charged to the grant, causing noncompliance with the Federal compliance requirements. Repeat Finding: No Recommendation: We recommend the County establish internal control procedures to ensure that all amounts charged to grant programs for employee payroll costs be reconciled to the specific employee payroll records and that supporting documentation be maintained throughout the grant award period and beyond.
Identification of the Federal Program - Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing Number 21.027 Criteria - The criteria is based on the guidelines and regulations set forth by the funding agency, the Department of the Treasury, in the Compliance and Reporting Guidance: State and Local Fiscal Recovery Funds document. According to these requirements, recipients must include the total of both the current period expenditure and the cumulative expenditure as of the end of each quarter on each quarterly Project and Expenditure report. These amounts should agree to amounts recorded in the City’s trial balance and amounts reported on the SEFA. The recipients must also include detailed obligation and expenditure information for contracts and grants awarded. 2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition - There was a lack of monitoring and appropriate review by the City of certain reports prepared by the grant department. Effect - The following reporting errors were identified: • For the reporting period ended September 30, 2023, current expenditures of $2,138,225 were excluded from the report. • For the reporting period ended September 30, 2023, cumulative expenditures were understated by $4,286,504. • For the reporting period ended September 30, 2023, there were subrecipients listed on the report that were not true subrecipients. The entities incorrectly listed as subrecipients had subawards totaling $7,098,989 incorrectly reported on the report. • There were four reporting periods during the fiscal year under audit. The reports for two out of the four reporting periods were not submitted timely. The report for the period October to December 2022 was due on January 31, 2023 but was not submitted until February 28, 2023. The report for the period April to June 2023 was due on July 31, 2023, but it was not submitted until August 3, 2023. • The City reported that they calculated their Actual General Revenue using fiscal year amounts while the City actually used calendar year amounts to calculate their Actual General Revenue. • Six out of the nine projects reported have expected capital expenditures. Out of those six, four reported expected or actual capital expenditures of over $1,000,000 and required written justification of capital expenditures. Two of those four projects did not have written justification of capital expenditures. Cause - The reporting errors attributed to a lack of understanding/interpretation of the reporting guidelines by the responsible personnel. Recommendation - The City should ensure responsible personnel has a clear understanding of the reporting guidance. The City should implement policies and procedures to monitor and review all reports prepared and submitted by the grants department or its designee. Views of Responsible Officials - The City agrees with the finding. The City will implement additional review procedures over grant reporting requirements, including more adequate review of reports prepared by third-party grant administrators.
Identification of the Federal Program - Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing Number 21.027 Criteria - 2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Per the City’s Ethics and Fiscal Policy and Procedures Manual, all contracts that create a commitment between the City and another party are to be routed from the originating department through the appropriate departments for signature approval prior to execution of the agreement by the Mayor. The signatures should be listed on the pre-numbered routing sheet obtained from the Finance Department. The signatures should include the appropriate individuals: department head, Director of Finance, legal department, Chief of Staff, Mayor, and City Clerk. This policy is designed to prevent unauthorized commitments and ensure compliance with procurement regulations. Condition - The City entered into a contract with a consulting firm which obligated the City to pay a monthly fee of $20,668 for a period of two years. Instead of following the typical contract approval, the contract was only signed by one individual. Effect - The failure to obtain the other approvals undermines the internal controls established by the City’s procurement policy. This increases the risk of unauthorized or improper contractual commitments and potentially exposes the city to legal and financial liabilities. Additionally, it diminishes the accountability and transparency of the procurement process. Cause - The deviation from the established procurement procedure appears to be due to a lack of awareness and oversight. The Mayor assumed sole responsibility for contract execution, without seeking the necessary additional approval. There may also be insufficient training or reminders regarding the contract routing requirement. Recommendation - The City should reinforce its procurement policies through regular training and clear communication to all relevant staff members. Specifically, the importance of using a contract routing sheet and obtaining all required signatures on contracts should be emphasized. Additionally, implementing a periodic review process to ensure compliance with this policy can help prevent future occurrences. Steps should also be taken to review past contracts for similar issues and take corrective action where necessary. Views of Responsible Officials - The City agrees with the finding. The City will implement additional review procedures over contract approvals.
Identification of the Federal Program - Community Programs to Improve Minority Health Grant Program - Assistance Listing Number 93.137Criteria - Financial reports are required to be submitted within 30 days after the end of each quarter in which the grant is open. 2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition - There was a lack of monitoring and appropriate review by the City of certain reports. Effect - The financial reports for quarters one and two were not submitted within 30 days after quarters end. Cause - The City’s policies and procedures over federal award reporting were not adequate. Recommendation - The City should strengthen its policies and procedures related to federal award reporting to comply with reporting requirements. Views of Responsible Officials - The City agrees with the finding. The City will implement additional oversight over the timely preparation and submittal of required grant reporting documents.
Identification of the Federal Program - Community Programs to Improve Minority Health Grant Program- Assistance Listing Number 93.137 Criteria - Per 2 CFR 200.332, Requirements for Pass-Through Entities, the City is required to monitor the subrecipients activities to ensure that the grant funds are used for authorized purposes by reviewing financial and performance reports that were required by the City. The City was also required by 2 CFR 200.332 to verify that each of their subrecipients had a single audit performed if their federal expenditures exceeded $750,000. In the Notice of Award, the Department of Health and Human Services required the City to create and provide to the Department a subrecipient monitoring plan as well as use that plan to monitor each of the City’s subrecipients. In the subrecipient monitoring plan, the City was required to perform the following steps: •Regularly communicate at least once a month with subrecipients to ensure that the project is beingcarried out as proposed and according to schedule. •Review and approve periodic technical/performance reports. •Review and approve subrecipient invoices. •Monitor general rate of expenditures and implementation of activities. •Review each subrecipient monthly through the subrecipients preparation of the City’s SubrecipientDesk Review form. •Perform an annual review for each subrecipient through the preparation of the Annual SubrecipientField Review form using the monthly desk review forms. 2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition - There was a lack of subrecipient monitoring and appropriate review by the City. The City did not effectively monitor subrecipient activities to ensure the proper utilization of grant funds. There was a lack of documented evidence demonstrating the monitoring of subrecipients. The City also failed to verify whether each of their subrecipients met the threshold of $750,000 in federal expenditures and subsequently underwent a single audit. There is no documented evidence indicating that the City systematically reviewed the subrecipient expenditures to ensure compliance with this requirement. Effect - Without proper documentation and monitoring, there is an increased likelihood of financial mismanagement, misuse of funds, and noncompliance with grant terms and regulations. Additionally, the absence of adequate records impedes transparency and accountability in the use of federal funds. This deficiency also may result in undetected instances of subrecipients failing to undergo required single audits. Cause - The absence of robust monitoring procedures may stem from insufficient staff training on federal grant requirements, a lack of awareness regarding the importance of maintaining accurate records and conducting thorough monitoring of subrecipient activities, a lack of established processes for reviewing financial and performance reports, or inadequate internal controls. Additionally, there may be a lack of clear communication and accountability regarding subrecipient monitoring roles and responsibilities. Recommendation - The City should establish and enforce comprehensive subrecipient monitoring protocols. This includes developing standardized monitoring procedures, providing staff training on monitoring requirements, allocating sufficient resources for monitoring activities, and implementing mechanisms for regular review and documentation of monitoring efforts. By strengthening subrecipient monitoring practices, the City can mitigate risks, ensure compliance with grant requirements, and safeguard the effective utilization of grant funds. Views of Responsible Officials - The City agrees with the finding. The City will implement additional subrecipient monitoring procedures.
Identification of the Federal Program - Staffing for Adequate Fire and Emergency Response (SAFER) - Assistance Listing Number 97.083 Criteria - Financial reports are required to be submitted each July 30 (for period January 1 - June 30) and January 31 (for period July 1 - December 31). The last report is required to be submitted no later than 90 days after the end of the performance period. 2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Condition - There was a lack of monitoring and appropriate review by the City of certain reports. Effect - The financial report for the period July 1, 2022 - December 31, 2022 was not submitted timely. Cause - The City’s policies and procedures over federal award reporting were not adequate. Recommendation - The City should strengthen its policies and procedures related to federal award reporting to comply with reporting requirements. Views of Responsible Officials - The City agrees with the finding. The City will implement additional oversight over the timely preparation and submittal of required grant reporting documents.
MID-STATE CHILD CARE & NUTRITION SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION 3 – FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS SEPTEMBER 30, 2023 REFERENCE: 2023-101 REPEAT FINDING REFERENCE: 2022-001 CFDA NUMBER: 10.558 – CHILD AND ADULT CARE FOOD PROGRAM U.S. DEPARTMENT OF AGRICULTURE - FOOD AND NUTRITION - 2023 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER 6AZ300003 QUESTIONED COSTS N/A CONDITION The following errors were noted during testing of FDCH Site Claims, the Sponsor’s Meal Served Report and 11 Day Care Home provider files for the months of March 2023 and September 2023: 1. For 4 of 11 provider files tested, menus were clerically inaccurate and did not support the meals claimed. This error occurred in March 2023 and September 2023. 2. For 1 of 11 provider files tested, more than 2 meals and 1 snack were claimed. This error occurred in March 2023. 3. For 2 of 11 provider files tested, meals were claimed when the child was not indicated as being present for the meal. This error occurred in March 2023. 4. For 1 of 11 provider files tested, meals were claimed when credible menu components were missing. This error occurred in September 2023. These errors resulted in the following revised meal counts: These variances resulted in an under payment (known questioned costs) of $5. However, after projecting the various types of errors over six meal categories for the entire year, likely questioned costs totaled $573. CRITERIA In accordance with the Arizona Department of Education, Day Care Home Compliance Manual, Revised June 2019, Chapter 10, Meal Requirements, Section 10.7 Other Meal Requirements, in order to claim a meal, the provider must abide by the following criteria: • The provider must serve a fully reimbursable meal that meets the meal pattern requirements and are supported by complete and up to date attendance, meal count, and menu records; • The child must be present and participate in the meal service; • All meal components must be served together; • The meal must be fully consumed on the premises in a congregate setting. Meals sent home with a child due to the parent picking up the child during meal service cannot be claimed; • Meal must be served during approved meal service time; • The provider can be reimbursed for a maximum of two meals and one snack or two snacks and one meal per child, per day; • Only children who are enrolled can be claimed and the number of children cannot exceed the allowable ratio; • Payment may be made for meals served to provider’s own child(ren) or foster children only when: Their child(ren) are enrolled and participating in the child care program during the time of the meal service; At least one enrolled, non-resident child is present and participating in the child care program; The provider meets the family size income standards for free or reduced price meals; • Seconds may be served but are not reimbursable; and • If a school age child receives a breakfast, lunch or afterschool snack at school, a provider may not claim the same meal. In accordance with the Uniform Guidance, Compliance Supplement, Part 6 – Internal Control, the 2 CFR section 200.303 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. EFFECT Program requirements were not complied with. Additionally, meal reimbursements were clerically inaccurate and the providers and sponsor were incorrectly reimbursed. CAUSE Although the internal controls were adequately designed, there were deficiencies in the execution of the controls. All errors occurred on paper menus, which have a higher risk of errors. RECOMMENDATION AND BENEFIT Menus should be reviewed to ensure all meals with the required components are claimed, and provider meal count sheets should be reviewed for clerical accuracy and completion, prior to the preparation of the reimbursement claim. These reviews should be documented. This will help ensure that program requirements are complied with and only eligible meals served to eligible participants are claimed for reimbursement. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding No. 2023-002 Federal Agency: U.S. Department of Education ALN and Title: 84.063 – Federal Pell Grant Program Federal Award Number: Unknown Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Questioned Cost: $1,496 Criteria: 2 CFR 200.303 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 should 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). 34 CFR 688.22(a)(1) requires that when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student's withdrawal date. If the total amount of Title IV grant or loan assistance, or both, that the student earned is less than the amount of Title IV grant or loan assistance that was disbursed to the student as of the date of the institution's determination that the student withdrew, the difference between these amounts must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. If the total amount of Title IV grant or loan assistance, or both, that the student earned is greater than the total amount of Title IV grant or loan assistance, or both, that was disbursed to the student as of the date of the institution's determination that the student withdrew, the difference between these amounts must be treated as a post-withdrawal disbursement. 34 CFR 690.80(b)(2)(iii) requires that the institution shall recalculate the student's enrollment status to reflect only those classes for which the student actually began attendance if a student’s projected enrollment status changes during a payment period before the student begins attendance in all of his or her classes for that payment period. Condition: The College did not have effective internal controls surrounding the accurate and complete identification of students who officially and unofficially withdrew from the College for purposes of calculating amounts subject to return of Title IV funds (R2T4), whereby: Finding No. 2023-002, continued Federal Agency: U.S. Department of Education ALN and Title: 84.063 – Federal Pell Grant Federal Award Number: Unknown Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Questioned Cost: $1,496 Condition, continued: 1. Ten students officially withdrawing from all classes have not been identified and subjected to R2T4 evaluation procedures. 2. For 1 (3%) out of 40 samples tested, a student unofficially withdrawing from all classes has not been identified and subjected to R2T4 evaluation procedures. The calculated amount for the College to return is $1,496 of which $862 is due to the College’s failure to recalculate the Pell award based on the student’s enrollment status for one course for which the student has never began attendance. Cause: The College relies on its IT application to determine the students officially withdrawing classes. The application utilizes the registration codes assigned by the Admissions Office as one of the parameters to perform the process. The lack of coordination between the Financial Aid Office and Admissions Office on the assignment of registration codes impacted the determination of students subject to R2T4. The College does not have a process to evaluate students who unofficially withdrew from all classes, particularly those receiving “TF” (technical failure) and/or “F” (failing) grades. Effect: If the College’s IT application is not producing an accurate and complete list of students officially withdrawing from classes, amounts subject to return to Title IV programs and/or post-withdrawal disbursement may not be identified. Lack of process to identify unofficial withdrawals may lead to noncompliance to R2T4 requirements. Finding No. 2023-002, continued Federal Agency: U.S. Department of Education ALN and Title: 84.063 – Federal Pell Grant Federal Award Number: Unknown Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Questioned Cost: $1,496 Recommendation: The Financial Aid Office and Admissions Office should coordinate to determine the appropriate registration code assignment in the system to ensure the accurate and complete identification of students subject to R2T4. The College should design and implement controls to identify unofficial withdrawals, including a review of students receiving TF, F, incomplete and similar grades. Views of responsible officials: See Corrective Action Plan.
Program: U.S. Department of Agriculture; Passed through Alabama Department of Education; Child Nutrition Cluster, Assistance Listing #10.555 and #10.553, for 10/1/2022 through 9/30/2023. Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal Awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. Condition: Certain timecards were not properly approved prior to payment of the payroll expenditure. Context: This is a condition identified per review of the Board’s compliance with specified requirements using a statistically valid sample. Effect: Without adherence to controls in place to ensure costs are properly reviewed, the Board could request funds for costs or activities that are unallowable. Cause: Policies and procedures were not followed to properly authorize transactions. Repeat of a Prior-Year Finding: No Recommendation: The Board should strengthen its policies and procedures over the review of appropriate authorization to ensure that expenditures are allowable costs and for allowable activities. View of Responsible Officials: The Board and management agree with this finding.
Program: U.S. Department of Agriculture; Passed through Alabama Department of Education; Child Nutrition Cluster, Assistance Listing #10.555 and #10.553, for 10/1/2022 through 9/30/2023. Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal Awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. Condition: Certain timecards were not properly approved prior to payment of the payroll expenditure. Context: This is a condition identified per review of the Board’s compliance with specified requirements using a statistically valid sample. Effect: Without adherence to controls in place to ensure costs are properly reviewed, the Board could request funds for costs or activities that are unallowable. Cause: Policies and procedures were not followed to properly authorize transactions. Repeat of a Prior-Year Finding: No Recommendation: The Board should strengthen its policies and procedures over the review of appropriate authorization to ensure that expenditures are allowable costs and for allowable activities. View of Responsible Officials: The Board and management agree with this finding.
Program: U.S. Department of Agriculture; Passed through Alabama Department of Education; Child Nutrition Cluster, Assistance Listing #10.555 and #10.553, for 10/1/2022 through 9/30/2023. Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal Awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. Condition: Certain timecards were not properly approved prior to payment of the payroll expenditure. Context: This is a condition identified per review of the Board’s compliance with specified requirements using a statistically valid sample. Effect: Without adherence to controls in place to ensure costs are properly reviewed, the Board could request funds for costs or activities that are unallowable. Cause: Policies and procedures were not followed to properly authorize transactions. Repeat of a Prior-Year Finding: No Recommendation: The Board should strengthen its policies and procedures over the review of appropriate authorization to ensure that expenditures are allowable costs and for allowable activities. View of Responsible Officials: The Board and management agree with this finding.
Program: U.S. Department of Agriculture; Passed through Alabama Department of Education; Child Nutrition Cluster, Assistance Listing #10.555 and #10.553, for 10/1/2022 through 9/30/2023. Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal Awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. Condition: Certain timecards were not properly approved prior to payment of the payroll expenditure. Context: This is a condition identified per review of the Board’s compliance with specified requirements using a statistically valid sample. Effect: Without adherence to controls in place to ensure costs are properly reviewed, the Board could request funds for costs or activities that are unallowable. Cause: Policies and procedures were not followed to properly authorize transactions. Repeat of a Prior-Year Finding: No Recommendation: The Board should strengthen its policies and procedures over the review of appropriate authorization to ensure that expenditures are allowable costs and for allowable activities. View of Responsible Officials: The Board and management agree with this finding.
Finding 2023-001: Equipment and Real Property Management Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0023-21 FR-AMT-0028-22 69A36523504100AMTDC Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations – 2 CFR 200.313 Equipment requires that: 1. Equipment must be used in the program or project for which it was acquired as long as needed, whether the project or program continues to be supported by the federal award or, when appropriate, under other Federal awards; however, the non Federal entity must not encumber the equipment without prior approval of the federal awarding agency (2 CFR 200.313(c) and (e)). 2. Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). 3. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR 200.313(d)(2)). 4. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated (2 CFR 200.313(d)(3)). Section II – Federal Awards Findings and Questioned Costs (continued) 5. Adequate maintenance procedures must be developed to keep the property in good condition (2 CFR 200.313(d)(4)). The code of federal regulations – 2 CFR 200.303 – Internal Controls requires that non-Federal entities must: 6. Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings (2 CFR 200.303(d)). 7. 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 We subjected 60 equipment assets to testing; these assets had a value of approximately $94.8 million. Of the $94.8 million, approximately $8.0 million were equipment assets purchased in previous years and were subject to our inventory observation testing and the remaining $86.8 million were equipment assets subject to both our purchases and inventory observation testing. Total acquisition cost of equipment assets within scope purchased during the year approximated $279.6 million. Net book value of all equipment purchased to date under grants within scope as of September 30, 2023 approximated $558.0 million. The following exceptions to the criteria were observed during the performance of the audit procedures: 1. For three of the equipment samples reviewed (approximately $0.3 million), it was observed that the assets did not have a unique asset identifier in the originally provided equipment population or did not have an asset identifier on the equipment. 2. For five of the equipment samples reviewed (approximately $0.5 million), it was observed that the condition data or location field in the asset records was blank. 3. During our procedures performed for two assets (approximately $1.1 million), we identified that no inventory had occurred for the assets, even though they had been placed in service over two years prior and would have required an inventory prior to our observation. As this came to our attention after the inventory was required and during our observation procedures, we investigated further and could not obtain alternative evidence to support that an inventory had occurred within the two-year period. 4. One of the equipment samples selected could not be located (approximately $0.05 million), as such we could not verify existence of the asset. 5. This is a repeat finding that has occurred over the last several audit periods. As such, Amtrak has not taken sufficient actions when instances of noncompliance are identified through audit findings to make necessary updates to their internal controls. Questioned Costs This finding resulted in a total of $0.05 million of likely questioned costs for Assistance Listing 20.315 – National Railroad Passenger Corporation Grant: FR-AMT-0028-22 This amount represents the amount per the purchase order for the asset in sub bullet #4 above that could not be located. Context We selected 60 equipment items for internal control and compliance testing of the above attributes. See condition section above for equipment amounts in both sample size and population. Effect Amtrak is not in compliance with the 2 CFR 200.313. Additionally, when assets are not accurately identified, it could lead to logistical inefficiencies as well as the difficulty in locating and identifying equipment timely. This may also put assets at greater risk of being lost, stolen, or not properly maintained. Cause The nature of much of Amtrak’s equipment is composed of moving assets that are on the tracks and operating up and down the corridors or around the yards or moving from location to location in a geographical region to achieve daily operational objectives. Furthermore, Amtrak resources are deployed such that managers and supervisors oversee geographical regions and equipment that are located throughout various routes that often connect through multiple states with many unmanned and less traveled stations. Asset locations, including changes on short notice for where the asset will be used, and frequent inspections occur in order to keep the equipment operating safely; however, the system of record is not always updated or updated in a timely manner to reflect the location and condition of the asset in the records upon a change in asset custody. Amtrak’s equipment policy, which is inconsistent with Uniform Guidance, currently requires that the condition field be confirmed and updated as part of the two-year inventory observation requirement. Section II – Federal Awards Findings and Questioned Costs (continued) In reviewing management’s controls, the key controls identified by management are not designed such that consistent and timely proactive monitoring and/or review occurs to ensure that an inventory occurs no less than once every two years. There is an identified control that stipulates “On a monthly basis, Capital Accounting will identify all equipment that has not been observed within 2 years and communicate to the Asset Management Team for action to be taken.” This control as designed is not preventive and may not identify the non-compliance risk until after non-compliance occurs. For the instances where the unique identifier did not exist on the asset or match the asset records, this was caused by a clerical/human error in recording the asset details in the system in addition to a lack of review control to verify the accuracy of the data recording. Identification as a Repeat Finding This finding is a repeat finding of 2022-001. Recommendation We recommend that Amtrak continue to work toward a full integration or reconciliation between Amtrak’s fixed asset system of record and the different equipment-tracking systems. We recommend that management consider redesigning one of its key controls to help ensure that the monitoring of the observations is occurring on a preventive basis to help identify any exposure to non-compliance before it occurs. For example, Amtrak should consider an automated system report that would flag an asset proactively when a 2-year inventory deadline is approaching. During the observation process, management should ensure there is a review control within the process to validate that the asset is accurately tagged and such identifying information matches the equipment-tracking system. Additionally, this review control should also be performed when the asset is first logged into the equipment-tracking system. In the interim, until such processes are fully implemented, Amtrak should enhance the current control procedures surrounding the asset documentation and ensure that field personnel are aware of and are consistently and carefully updating the asset records such that clerical/human errors are minimized and that the asset records contain the necessary asset details in order to properly track equipment by federal requirements. This would include enhancing the asset chain of custody recordkeeping so that such changes are identified and reported timely. Additionally, management should consider requiring the serial number and model number to be documented in the system of record at set up in addition to the asset tag number. This will help ensure that the equipment has a unique ID number that can help it be identified and matched to the system record should an asset number not get added timely. Finally, as it relates to condition #4 above, management should investigate the root cause of the asset that could not be located and determine if additional control changes or modifications need to be made in order to prevent reoccurrence. Views of Responsible Officials Amtrak agrees with the recommendation to redesign key controls to help ensure that the monitoring of the observations happens on a preventive basis to help identify any exposure to non-compliance before it occurs. Since being created in 2022, Amtrak’s Enterprise Asset Management and Disposition team (EAMDT) has completed, with support from an outside consulting firm, a baseline assessment, as well as corrective action plans to specifically address noncompliance identified in the audit finding. Early in FY2024, Amtrak completed Phase 2 of this engagement to execute and implement a sub-set of these corrective action plans. Through this effort, EAMDT has prepared an updated Equipment Control Policy, developed standard operating procedures for equipment management, and developed a one-hour eLearning course that provides an overview of the importance for good equipment management practices and highlights the necessity for adhering to Single Audit compliance requirements of 2 CFR Part 200. The deliverables of this effort are to help ensure that assets are not capitalized without a complete record, which would include a unique asset identifier, as well as the condition and location of the assets. Additionally, EAMDT has developed reporting and analytics that enable both EAMDT and field personnel to be more proactive in managing the soon-to-be and out of compliance assets to both bring assets back into compliance, as well as to ensure an inventory is done and recorded within the two-year period. Lastly, EAMDT is working closely with Amtrak’s Digital Technology Department on the installation of location tracking technology on yard equipment and Engineering Maintenance of Way equipment, as well as developing an application that can be used on employee’s mobile devices to help ensure timely equipment assessments are completed.
Finding 2023-001: Equipment and Real Property Management Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0023-21 FR-AMT-0028-22 69A36523504100AMTDC Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations – 2 CFR 200.313 Equipment requires that: 1. Equipment must be used in the program or project for which it was acquired as long as needed, whether the project or program continues to be supported by the federal award or, when appropriate, under other Federal awards; however, the non Federal entity must not encumber the equipment without prior approval of the federal awarding agency (2 CFR 200.313(c) and (e)). 2. Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). 3. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR 200.313(d)(2)). 4. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated (2 CFR 200.313(d)(3)). Section II – Federal Awards Findings and Questioned Costs (continued) 5. Adequate maintenance procedures must be developed to keep the property in good condition (2 CFR 200.313(d)(4)). The code of federal regulations – 2 CFR 200.303 – Internal Controls requires that non-Federal entities must: 6. Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings (2 CFR 200.303(d)). 7. 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 We subjected 60 equipment assets to testing; these assets had a value of approximately $94.8 million. Of the $94.8 million, approximately $8.0 million were equipment assets purchased in previous years and were subject to our inventory observation testing and the remaining $86.8 million were equipment assets subject to both our purchases and inventory observation testing. Total acquisition cost of equipment assets within scope purchased during the year approximated $279.6 million. Net book value of all equipment purchased to date under grants within scope as of September 30, 2023 approximated $558.0 million. The following exceptions to the criteria were observed during the performance of the audit procedures: 1. For three of the equipment samples reviewed (approximately $0.3 million), it was observed that the assets did not have a unique asset identifier in the originally provided equipment population or did not have an asset identifier on the equipment. 2. For five of the equipment samples reviewed (approximately $0.5 million), it was observed that the condition data or location field in the asset records was blank. 3. During our procedures performed for two assets (approximately $1.1 million), we identified that no inventory had occurred for the assets, even though they had been placed in service over two years prior and would have required an inventory prior to our observation. As this came to our attention after the inventory was required and during our observation procedures, we investigated further and could not obtain alternative evidence to support that an inventory had occurred within the two-year period. 4. One of the equipment samples selected could not be located (approximately $0.05 million), as such we could not verify existence of the asset. 5. This is a repeat finding that has occurred over the last several audit periods. As such, Amtrak has not taken sufficient actions when instances of noncompliance are identified through audit findings to make necessary updates to their internal controls. Questioned Costs This finding resulted in a total of $0.05 million of likely questioned costs for Assistance Listing 20.315 – National Railroad Passenger Corporation Grant: FR-AMT-0028-22 This amount represents the amount per the purchase order for the asset in sub bullet #4 above that could not be located. Context We selected 60 equipment items for internal control and compliance testing of the above attributes. See condition section above for equipment amounts in both sample size and population. Effect Amtrak is not in compliance with the 2 CFR 200.313. Additionally, when assets are not accurately identified, it could lead to logistical inefficiencies as well as the difficulty in locating and identifying equipment timely. This may also put assets at greater risk of being lost, stolen, or not properly maintained. Cause The nature of much of Amtrak’s equipment is composed of moving assets that are on the tracks and operating up and down the corridors or around the yards or moving from location to location in a geographical region to achieve daily operational objectives. Furthermore, Amtrak resources are deployed such that managers and supervisors oversee geographical regions and equipment that are located throughout various routes that often connect through multiple states with many unmanned and less traveled stations. Asset locations, including changes on short notice for where the asset will be used, and frequent inspections occur in order to keep the equipment operating safely; however, the system of record is not always updated or updated in a timely manner to reflect the location and condition of the asset in the records upon a change in asset custody. Amtrak’s equipment policy, which is inconsistent with Uniform Guidance, currently requires that the condition field be confirmed and updated as part of the two-year inventory observation requirement. Section II – Federal Awards Findings and Questioned Costs (continued) In reviewing management’s controls, the key controls identified by management are not designed such that consistent and timely proactive monitoring and/or review occurs to ensure that an inventory occurs no less than once every two years. There is an identified control that stipulates “On a monthly basis, Capital Accounting will identify all equipment that has not been observed within 2 years and communicate to the Asset Management Team for action to be taken.” This control as designed is not preventive and may not identify the non-compliance risk until after non-compliance occurs. For the instances where the unique identifier did not exist on the asset or match the asset records, this was caused by a clerical/human error in recording the asset details in the system in addition to a lack of review control to verify the accuracy of the data recording. Identification as a Repeat Finding This finding is a repeat finding of 2022-001. Recommendation We recommend that Amtrak continue to work toward a full integration or reconciliation between Amtrak’s fixed asset system of record and the different equipment-tracking systems. We recommend that management consider redesigning one of its key controls to help ensure that the monitoring of the observations is occurring on a preventive basis to help identify any exposure to non-compliance before it occurs. For example, Amtrak should consider an automated system report that would flag an asset proactively when a 2-year inventory deadline is approaching. During the observation process, management should ensure there is a review control within the process to validate that the asset is accurately tagged and such identifying information matches the equipment-tracking system. Additionally, this review control should also be performed when the asset is first logged into the equipment-tracking system. In the interim, until such processes are fully implemented, Amtrak should enhance the current control procedures surrounding the asset documentation and ensure that field personnel are aware of and are consistently and carefully updating the asset records such that clerical/human errors are minimized and that the asset records contain the necessary asset details in order to properly track equipment by federal requirements. This would include enhancing the asset chain of custody recordkeeping so that such changes are identified and reported timely. Additionally, management should consider requiring the serial number and model number to be documented in the system of record at set up in addition to the asset tag number. This will help ensure that the equipment has a unique ID number that can help it be identified and matched to the system record should an asset number not get added timely. Finally, as it relates to condition #4 above, management should investigate the root cause of the asset that could not be located and determine if additional control changes or modifications need to be made in order to prevent reoccurrence. Views of Responsible Officials Amtrak agrees with the recommendation to redesign key controls to help ensure that the monitoring of the observations happens on a preventive basis to help identify any exposure to non-compliance before it occurs. Since being created in 2022, Amtrak’s Enterprise Asset Management and Disposition team (EAMDT) has completed, with support from an outside consulting firm, a baseline assessment, as well as corrective action plans to specifically address noncompliance identified in the audit finding. Early in FY2024, Amtrak completed Phase 2 of this engagement to execute and implement a sub-set of these corrective action plans. Through this effort, EAMDT has prepared an updated Equipment Control Policy, developed standard operating procedures for equipment management, and developed a one-hour eLearning course that provides an overview of the importance for good equipment management practices and highlights the necessity for adhering to Single Audit compliance requirements of 2 CFR Part 200. The deliverables of this effort are to help ensure that assets are not capitalized without a complete record, which would include a unique asset identifier, as well as the condition and location of the assets. Additionally, EAMDT has developed reporting and analytics that enable both EAMDT and field personnel to be more proactive in managing the soon-to-be and out of compliance assets to both bring assets back into compliance, as well as to ensure an inventory is done and recorded within the two-year period. Lastly, EAMDT is working closely with Amtrak’s Digital Technology Department on the installation of location tracking technology on yard equipment and Engineering Maintenance of Way equipment, as well as developing an application that can be used on employee’s mobile devices to help ensure timely equipment assessments are completed.
Finding 2023-002: Preparation and Maintenance of Equipment Population Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0022-21 FR-AMT-0026-22 FR-AMT-0028-22 Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations – 2 CFR 200.1 provides the following definition of Equipment: - Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. The code of federal regulations – 2 CFR 200.313 Equipment requires that: - Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). The code of federal regulations – 2 CFR 200.303 – Internal Controls requires that non-Federal entities 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 The following exceptions to the criteria were observed during the performance of the audit procedures as it relates to completeness and accuracy of equipment population: 1. In reviewing the equipment population provided to EY as part of the audit for FY23, we noted the Company mapped FY23 equipment activity relating to FR-AMT-0020-20, FR-AMT-0022-21 and FR-AMT-0026-22 grants to older funding sources. Per inquiry of management, FY23 Overhauled equipment activity was originally mapped incorrectly to prior year grant awards and fund source years. 2. Population contained an asset that could not be observed as the nature of the purchased equipment was a combination of tools with each individually costing less than $5,000. 3. Population contained an asset that had been replaced in 2021, and as such should not have been included in the equipment listing. Questioned Costs None. Context Population of single audit equipment records is manually prepared each period where funding sources are assigned to each asset based on the unique asset identifier. The data source used by the Capital Accounting team did not take into consideration overhaul activity during the FY23 period that was undertaken over equipment assets acquired in 2014-2016 fiscal years. (Condition 1) One of the 60 selections made for testing could not be observed, as the underlying equipment maintenance systems did not have a record of this item due to the fact that items purchased consisted of tools that were individually less than $5,000 and as such did not meet the definition of Equipment as defined by 2 CFR 200.1. The population provided to EY incorrectly included an exception as described in the Condition section above, indicating that following internal control was not functioning as designed: “Monthly, Lead Accountant, Capital Accounting exports equipment data from PP into an Excel spreadsheet (the Equipment Spreadsheet) and manually determines the eligibility of the equipment. The determination is subsequently reviewed by the Senior Manager, Capital Accounting.” (Condition 2) In the initial population provided, we noted that one of the assets had been retired and replaced in 2021 and should have not been included within the population. This was an error that was not corrected during timely updates of the maintenance records. (Condition 3) Effect Amtrak’s control procedures in place as it relates to the preparation of equipment population were not designed in such a manner that would timely identify the conditions noted. Cause The exception from the criteria noted is attributed to the following cause: 1. Highly manual process required to reconcile data between multiple systems in order to maintain a complete and accurate record for each equipment asset. 2. Internal control procedures as designed are not detailed enough to review equipment purchases to be able to determine eligibility of the asset to be classified as equipment under 2 CFR equipment valuation thresholds. Identification as a Repeat Finding Not a repeat finding. Recommendation To address the Condition identified above, we recommend Amtrak to continue integration of the systems in such a way that appropriate funding source would be tagged to each asset automatically and that required property records would automatically be consolidated into one system of record and updated in that system. Ensure that adequate IT interface and business process application controls over the completeness, accuracy, validity, confidentiality, and availability of transactions and data during application processing (input, processing, output, etc.) are in place. Additionally, management should consider breaking out large purchase orders containing multiple items of equipment and tools under one purchase request, by creating separate level 2 WBSE codes in order to distinguish between different types of items being acquired, in order to be able to provide more appropriate classification. Views of Responsible Officials Amtrak agrees with the finding related to the equipment population and believes that strengthening procedures around the preparation and review of the population is needed to prevent errors in future populations. Amtrak recognizes that remediation of this finding will require enhancing documentation around the preparation of the population and documenting a set of procedures to follow for reviewing the population. Some of these efforts have already been enacted while others will be developed and implemented prior to September 30, 2024.
Finding 2023-002: Preparation and Maintenance of Equipment Population Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0022-21 FR-AMT-0026-22 FR-AMT-0028-22 Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations – 2 CFR 200.1 provides the following definition of Equipment: - Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. The code of federal regulations – 2 CFR 200.313 Equipment requires that: - Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). The code of federal regulations – 2 CFR 200.303 – Internal Controls requires that non-Federal entities 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 The following exceptions to the criteria were observed during the performance of the audit procedures as it relates to completeness and accuracy of equipment population: 1. In reviewing the equipment population provided to EY as part of the audit for FY23, we noted the Company mapped FY23 equipment activity relating to FR-AMT-0020-20, FR-AMT-0022-21 and FR-AMT-0026-22 grants to older funding sources. Per inquiry of management, FY23 Overhauled equipment activity was originally mapped incorrectly to prior year grant awards and fund source years. 2. Population contained an asset that could not be observed as the nature of the purchased equipment was a combination of tools with each individually costing less than $5,000. 3. Population contained an asset that had been replaced in 2021, and as such should not have been included in the equipment listing. Questioned Costs None. Context Population of single audit equipment records is manually prepared each period where funding sources are assigned to each asset based on the unique asset identifier. The data source used by the Capital Accounting team did not take into consideration overhaul activity during the FY23 period that was undertaken over equipment assets acquired in 2014-2016 fiscal years. (Condition 1) One of the 60 selections made for testing could not be observed, as the underlying equipment maintenance systems did not have a record of this item due to the fact that items purchased consisted of tools that were individually less than $5,000 and as such did not meet the definition of Equipment as defined by 2 CFR 200.1. The population provided to EY incorrectly included an exception as described in the Condition section above, indicating that following internal control was not functioning as designed: “Monthly, Lead Accountant, Capital Accounting exports equipment data from PP into an Excel spreadsheet (the Equipment Spreadsheet) and manually determines the eligibility of the equipment. The determination is subsequently reviewed by the Senior Manager, Capital Accounting.” (Condition 2) In the initial population provided, we noted that one of the assets had been retired and replaced in 2021 and should have not been included within the population. This was an error that was not corrected during timely updates of the maintenance records. (Condition 3) Effect Amtrak’s control procedures in place as it relates to the preparation of equipment population were not designed in such a manner that would timely identify the conditions noted. Cause The exception from the criteria noted is attributed to the following cause: 1. Highly manual process required to reconcile data between multiple systems in order to maintain a complete and accurate record for each equipment asset. 2. Internal control procedures as designed are not detailed enough to review equipment purchases to be able to determine eligibility of the asset to be classified as equipment under 2 CFR equipment valuation thresholds. Identification as a Repeat Finding Not a repeat finding. Recommendation To address the Condition identified above, we recommend Amtrak to continue integration of the systems in such a way that appropriate funding source would be tagged to each asset automatically and that required property records would automatically be consolidated into one system of record and updated in that system. Ensure that adequate IT interface and business process application controls over the completeness, accuracy, validity, confidentiality, and availability of transactions and data during application processing (input, processing, output, etc.) are in place. Additionally, management should consider breaking out large purchase orders containing multiple items of equipment and tools under one purchase request, by creating separate level 2 WBSE codes in order to distinguish between different types of items being acquired, in order to be able to provide more appropriate classification. Views of Responsible Officials Amtrak agrees with the finding related to the equipment population and believes that strengthening procedures around the preparation and review of the population is needed to prevent errors in future populations. Amtrak recognizes that remediation of this finding will require enhancing documentation around the preparation of the population and documenting a set of procedures to follow for reviewing the population. Some of these efforts have already been enacted while others will be developed and implemented prior to September 30, 2024.
Criteria – Federal regulations and grant terms and conditions of the programs require annual fiscal reports be submitted to the awarding agencies. In accordance with Uniform Guidance 2 CFR 200.303 the Health Board should have internal controls established to ensure accuracy of information reported and ensure compliance with reporting requirements. Additionally, good internal controls require that an individual who did not prepare the report should review the report for accuracy prior to submission. Condition and Context – The annual SF-425 reports required under each program were submitted, but we noted no evidence of secondary review by an individual other than the preparer. As a result, the submitted SF-425 reports misreported total program expenditures for the period and the reports were ultimately rejected by the funding agencies causing the Health Board’s accounting department to correct and re-submit SF-425 reports subsequent to the period under audit. Cause – The Health Board does not have sufficient internal controls over their grant reporting process to ensure proper review of report prior to submission to ensure all reported information is accurate. Effect – There is an increased likelihood of errors in the information reported to federal agencies and ultimately an increased likelihood of noncompliance over reporting requirements. Questioned Costs – There were no questioned costs associated with this finding. Repeat Finding – This is not a repeat finding. Recommendation – We recommend the Health Board improve the controls over the reporting function, which includes the documentation, review, and approval of all required reports. Views of responsible officials – Management agrees with the auditors' findings and will implement the corrective action plan to address the issue identified.
Criteria – Federal regulations and grant terms and conditions of the programs require annual fiscal reports be submitted to the awarding agencies. In accordance with Uniform Guidance 2 CFR 200.303 the Health Board should have internal controls established to ensure accuracy of information reported and ensure compliance with reporting requirements. Additionally, good internal controls require that an individual who did not prepare the report should review the report for accuracy prior to submission. Condition and Context – The annual SF-425 reports required under each program were submitted, but we noted no evidence of secondary review by an individual other than the preparer. As a result, the submitted SF-425 reports misreported total program expenditures for the period and the reports were ultimately rejected by the funding agencies causing the Health Board’s accounting department to correct and re-submit SF-425 reports subsequent to the period under audit. Cause – The Health Board does not have sufficient internal controls over their grant reporting process to ensure proper review of report prior to submission to ensure all reported information is accurate. Effect – There is an increased likelihood of errors in the information reported to federal agencies and ultimately an increased likelihood of noncompliance over reporting requirements. Questioned Costs – There were no questioned costs associated with this finding. Repeat Finding – This is not a repeat finding. Recommendation – We recommend the Health Board improve the controls over the reporting function, which includes the documentation, review, and approval of all required reports. Views of responsible officials – Management agrees with the auditors' findings and will implement the corrective action plan to address the issue identified.
Criteria – Federal regulations and grant terms and conditions of the programs require annual fiscal reports be submitted to the awarding agencies. In accordance with Uniform Guidance 2 CFR 200.303 the Health Board should have internal controls established to ensure accuracy of information reported and ensure compliance with reporting requirements. Additionally, good internal controls require that an individual who did not prepare the report should review the report for accuracy prior to submission. Condition and Context – The annual SF-425 reports required under each program were submitted, but we noted no evidence of secondary review by an individual other than the preparer. As a result, the submitted SF-425 reports misreported total program expenditures for the period and the reports were ultimately rejected by the funding agencies causing the Health Board’s accounting department to correct and re-submit SF-425 reports subsequent to the period under audit. Cause – The Health Board does not have sufficient internal controls over their grant reporting process to ensure proper review of report prior to submission to ensure all reported information is accurate. Effect – There is an increased likelihood of errors in the information reported to federal agencies and ultimately an increased likelihood of noncompliance over reporting requirements. Questioned Costs – There were no questioned costs associated with this finding. Repeat Finding – This is not a repeat finding. Recommendation – We recommend the Health Board improve the controls over the reporting function, which includes the documentation, review, and approval of all required reports. Views of responsible officials – Management agrees with the auditors' findings and will implement the corrective action plan to address the issue identified.
Criteria – Federal regulations and grant terms and conditions of the programs require annual fiscal reports be submitted to the awarding agencies. In accordance with Uniform Guidance 2 CFR 200.303 the Health Board should have internal controls established to ensure accuracy of information reported and ensure compliance with reporting requirements. Additionally, good internal controls require that an individual who did not prepare the report should review the report for accuracy prior to submission. Condition and Context – The annual SF-425 reports required under each program were submitted, but we noted no evidence of secondary review by an individual other than the preparer. As a result, the submitted SF-425 reports misreported total program expenditures for the period and the reports were ultimately rejected by the funding agencies causing the Health Board’s accounting department to correct and re-submit SF-425 reports subsequent to the period under audit. Cause – The Health Board does not have sufficient internal controls over their grant reporting process to ensure proper review of report prior to submission to ensure all reported information is accurate. Effect – There is an increased likelihood of errors in the information reported to federal agencies and ultimately an increased likelihood of noncompliance over reporting requirements. Questioned Costs – There were no questioned costs associated with this finding. Repeat Finding – This is not a repeat finding. Recommendation – We recommend the Health Board improve the controls over the reporting function, which includes the documentation, review, and approval of all required reports. Views of responsible officials – Management agrees with the auditors' findings and will implement the corrective action plan to address the issue identified.
Criteria – Federal regulations and grant terms and conditions of the programs require annual fiscal reports be submitted to the awarding agencies. In accordance with Uniform Guidance 2 CFR 200.303 the Health Board should have internal controls established to ensure accuracy of information reported and ensure compliance with reporting requirements. Additionally, good internal controls require that an individual who did not prepare the report should review the report for accuracy prior to submission. Condition and Context – The annual SF-425 reports required under each program were submitted, but we noted no evidence of secondary review by an individual other than the preparer. As a result, the submitted SF-425 reports misreported total program expenditures for the period and the reports were ultimately rejected by the funding agencies causing the Health Board’s accounting department to correct and re-submit SF-425 reports subsequent to the period under audit. Cause – The Health Board does not have sufficient internal controls over their grant reporting process to ensure proper review of report prior to submission to ensure all reported information is accurate. Effect – There is an increased likelihood of errors in the information reported to federal agencies and ultimately an increased likelihood of noncompliance over reporting requirements. Questioned Costs – There were no questioned costs associated with this finding. Repeat Finding – This is not a repeat finding. Recommendation – We recommend the Health Board improve the controls over the reporting function, which includes the documentation, review, and approval of all required reports. Views of responsible officials – Management agrees with the auditors' findings and will implement the corrective action plan to address the issue identified.
Criteria – Federal regulations and grant terms and conditions of the programs require annual fiscal reports be submitted to the awarding agencies. In accordance with Uniform Guidance 2 CFR 200.303 the Health Board should have internal controls established to ensure accuracy of information reported and ensure compliance with reporting requirements. Additionally, good internal controls require that an individual who did not prepare the report should review the report for accuracy prior to submission. Condition and Context – The annual SF-425 reports required under each program were submitted, but we noted no evidence of secondary review by an individual other than the preparer. As a result, the submitted SF-425 reports misreported total program expenditures for the period and the reports were ultimately rejected by the funding agencies causing the Health Board’s accounting department to correct and re-submit SF-425 reports subsequent to the period under audit. Cause – The Health Board does not have sufficient internal controls over their grant reporting process to ensure proper review of report prior to submission to ensure all reported information is accurate. Effect – There is an increased likelihood of errors in the information reported to federal agencies and ultimately an increased likelihood of noncompliance over reporting requirements. Questioned Costs – There were no questioned costs associated with this finding. Repeat Finding – This is not a repeat finding. Recommendation – We recommend the Health Board improve the controls over the reporting function, which includes the documentation, review, and approval of all required reports. Views of responsible officials – Management agrees with the auditors' findings and will implement the corrective action plan to address the issue identified.