Finding 2023-001 – Reporting – Federal Funding Accountability and Transparency Act (FFATA) Identification of the federal program: Federal Agency: United States Agency for International Development Assistance Listing: 98.001 – USAID Foreign Assistance for Programs Overseas 98.U04 – USAID Foreign Assistance for Economic Growth Federal Award Identification Number 98.001 – 7200AA19CA00002; 72066418CA00001; 72044020CA00002; 72049218CA00008; 72060822CA00002; 72066322CA00005 98.U04 – 72026320C00005 Award Year: FY 2022 – 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”Family Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 80 Section III – Federal Award Findings and Questioned Costs (continued) As per 2 CFR Part 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subaward information should be reported no later than the end of the month following the month in which the obligation was made. Condition: We noted the following matters during our testing of the Federal Funding Accountability and Transparency Act (FFATA) reporting compliance requirements: See chart/table in the schedule of findings and questioned costs Cause: A thorough review of the required data elements prior to submission of the reports did not occur consistently in FY 2023. In addition, a detailed review of all new subaward agreements and/or modifications made during FY 2023 was not performed to identify reports that should have been submitted. Effect or Potential Effect: FHI 360 did not report accurate information or did not submit the required reports for first-tier subawards of $30,000 or more causing them not to be in compliance with federal reporting requirements. Questioned Costs: NoneFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 82 Section III – Federal Award Findings and Questioned Costs (continued) Context: Under the Transparency Act reporting requirements, each FFATA report includes the following key data elements: 1) Subawardee name, 2) Subawardee DUNS #, 3) Amount of Subaward, 4) Subaward Obligation/Action Date, 5) Subaward Number, 6) Subaward Project Description, 7) Subawardee Names and Compensation of Highly Compensated Officers, if thresholds are met and 8) Date of Report Submission. Testing of the FFATA reports included each of these data elements as well as verifying for timely submissions. The table presented above lists the specific data elements where errors were detected as well as any untimely or non-submission of the reports. Total federal expenditures under 98.001 and 98.U04 were $ 509,476,610 and $3,502,691, respectively, for the year ended September 30, 2023. Identification as a Repeat Finding: This is a repeat finding from prior year (2022-001). Recommendation: We recommend FHI 360 strengthen its internal controls and procedures over FFATA reporting to ensure they are both timely and accurately submitted to be in compliance with the federal reporting requirements. Views of Responsible Officials: Management will implement additional actions to enhance and strengthen previous year actions including global communications and meetings with key management teams, targeted and detailed refresher training on FFATA requirements and completion of the FSRS template via an e-module, and additional review of FFATA submissions via a centralized team to identify prospective transactions and perform a final review of data quality prior to data entry in FSRS. The additional review will focus on completeness and accuracy of submitted data and timeliness of submissions. Management notes there were prior year FFATA findings related to timeliness of submissions which EY concluded upon in May 2023, during the current fiscal period. The corrective action plan in response to the prior year findings was immediately developed and implemented. This fiscal year’s control exceptions related to timeliness were prior to the material findings being concluded upon and the corrective action plan being implemented
Finding 2023-002 – Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: Department of Health and Human Services – Centers for Disease Control and Prevention United States Department of State Assistance Listing: 93.U02 – National Health Initiatives, Strategies and Action Plans for Infectious Diseases 19.415 – Professional and Cultural Exchange Programs – Citizen Exchanges Federal Award Identification Number: 93.U02 – HHSD2002015M88157B – 75D30120F08105 19.415 – SECAGD22CA0060 Award Year: FY 2022 – 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the FederalFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 84 Section III – Federal Award Findings and Questioned Costs (continued) Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: During our testing of procurement and suspension and debarment compliance requirements we noted the following: • Under 93.U02, we noted for 5 transactions out of 25 tested, FHI 360 relied on the screening for suspension and debarment performed by a third-party service provider without having any additional control to validate that these specific vendors were part of the screening performed by the third-party service provider in their continuous monitoring procedures. • Under 19.415, we noted for 1 transaction out of 25 samples tested, FHI 360 did not perform the screening of the vendor prior to setting up the vendor in the system and executing the contract. Cause: Under 93.U02, FHI 360 performed suspension and debarment checks in prior periods and therefore relied on the “continuous monitoring” performed by its third-party service provider to monitor the suspension and debarment status. Under 19.415, FHI 360 performed suspension and debarment check after setting up the vendor in the system and executing the contract. Effect or Potential Effect: Under 93.U02, In the absence of having additional controls in place to verify and validate that the continuous monitoring performed by the third-party service provider includes all vendors and suppliers, FHI 360 could potentially contract with a vendor who is suspended or debarred and not detect the non-compliance timely. Similarly, under 19.415, FHI 360 could execute a contract with a vendor who is suspended or debarred. Questioned costs: NoneFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 85 Section III – Federal Award Findings and Questioned Costs (continued) Context: FHI 360 internally performs suspension and debarment checks of its vendors and suppliers. FHI 360 also utilizes a third-party service provider to perform continuous monitoring of its vendors and suppliers for suspension and debarment and receives a daily monitoring report. Although, FHI 360 received a daily monitoring report from the service provider that showed there were no matches for vendors enrolled throughout the fiscal period, the third-party service provider does not have a SOC 1 report and there were no additional controls FHI implemented to rely on the completeness of the results provided by the third-party service provider. The total amount of procurement transactions subject to suspension and debarment screening under 19.415 for FY 2023 is $1,154,561. Total expenditures reported on the Schedule of Expenditures of Federal Awards is $4,981,200. The total amount of procurement transactions subject to suspension and debarment screening under 93.U02 for FY 2023 is $3,3319,092. Total expenditures reported on the Schedule of Expenditures of Federal Awards is $9,160,477. Identification as a Repeat Finding: This is not a repeat finding from prior year. Recommendation: We recommend FHI 360 monitor new vendor set up in the system and ensure the screening for suspension and debarment is performed prior to executing a contract with a vendor. We recommend FHI 360 implement additional validation controls, when relying on continuous monitoring for suspension and debarment checks performed by any third-party service provider.Family Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 86 Section III – Federal Award Findings and Questioned Costs (continued) Views of Responsible Officials: Management will reemphasize its established policies and procedures around the restricted party screenings’ (RPS) importance highlighting the timeliness component of when the RPS is required. Management will implement additional controls to ensure the suite of controls around its use of the third party service provider adequately minimizes any related risks. Specifically, we will periodically perform RPS via the service provider and the source databases to confirm results are the same. We will also periodically compare the complete list of active vendors within our internal vendor management systems reconciles to the list of vendors within the service provider where we are relying on continuous monitoring.
Finding 2023-002 – Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: Department of Health and Human Services – Centers for Disease Control and Prevention United States Department of State Assistance Listing: 93.U02 – National Health Initiatives, Strategies and Action Plans for Infectious Diseases 19.415 – Professional and Cultural Exchange Programs – Citizen Exchanges Federal Award Identification Number: 93.U02 – HHSD2002015M88157B – 75D30120F08105 19.415 – SECAGD22CA0060 Award Year: FY 2022 – 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the FederalFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 84 Section III – Federal Award Findings and Questioned Costs (continued) Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: During our testing of procurement and suspension and debarment compliance requirements we noted the following: • Under 93.U02, we noted for 5 transactions out of 25 tested, FHI 360 relied on the screening for suspension and debarment performed by a third-party service provider without having any additional control to validate that these specific vendors were part of the screening performed by the third-party service provider in their continuous monitoring procedures. • Under 19.415, we noted for 1 transaction out of 25 samples tested, FHI 360 did not perform the screening of the vendor prior to setting up the vendor in the system and executing the contract. Cause: Under 93.U02, FHI 360 performed suspension and debarment checks in prior periods and therefore relied on the “continuous monitoring” performed by its third-party service provider to monitor the suspension and debarment status. Under 19.415, FHI 360 performed suspension and debarment check after setting up the vendor in the system and executing the contract. Effect or Potential Effect: Under 93.U02, In the absence of having additional controls in place to verify and validate that the continuous monitoring performed by the third-party service provider includes all vendors and suppliers, FHI 360 could potentially contract with a vendor who is suspended or debarred and not detect the non-compliance timely. Similarly, under 19.415, FHI 360 could execute a contract with a vendor who is suspended or debarred. Questioned costs: NoneFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 85 Section III – Federal Award Findings and Questioned Costs (continued) Context: FHI 360 internally performs suspension and debarment checks of its vendors and suppliers. FHI 360 also utilizes a third-party service provider to perform continuous monitoring of its vendors and suppliers for suspension and debarment and receives a daily monitoring report. Although, FHI 360 received a daily monitoring report from the service provider that showed there were no matches for vendors enrolled throughout the fiscal period, the third-party service provider does not have a SOC 1 report and there were no additional controls FHI implemented to rely on the completeness of the results provided by the third-party service provider. The total amount of procurement transactions subject to suspension and debarment screening under 19.415 for FY 2023 is $1,154,561. Total expenditures reported on the Schedule of Expenditures of Federal Awards is $4,981,200. The total amount of procurement transactions subject to suspension and debarment screening under 93.U02 for FY 2023 is $3,3319,092. Total expenditures reported on the Schedule of Expenditures of Federal Awards is $9,160,477. Identification as a Repeat Finding: This is not a repeat finding from prior year. Recommendation: We recommend FHI 360 monitor new vendor set up in the system and ensure the screening for suspension and debarment is performed prior to executing a contract with a vendor. We recommend FHI 360 implement additional validation controls, when relying on continuous monitoring for suspension and debarment checks performed by any third-party service provider.Family Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 86 Section III – Federal Award Findings and Questioned Costs (continued) Views of Responsible Officials: Management will reemphasize its established policies and procedures around the restricted party screenings’ (RPS) importance highlighting the timeliness component of when the RPS is required. Management will implement additional controls to ensure the suite of controls around its use of the third party service provider adequately minimizes any related risks. Specifically, we will periodically perform RPS via the service provider and the source databases to confirm results are the same. We will also periodically compare the complete list of active vendors within our internal vendor management systems reconciles to the list of vendors within the service provider where we are relying on continuous monitoring.
Finding 2023-001 – Reporting – Federal Funding Accountability and Transparency Act (FFATA) Identification of the federal program: Federal Agency: United States Agency for International Development Assistance Listing: 98.001 – USAID Foreign Assistance for Programs Overseas 98.U04 – USAID Foreign Assistance for Economic Growth Federal Award Identification Number 98.001 – 7200AA19CA00002; 72066418CA00001; 72044020CA00002; 72049218CA00008; 72060822CA00002; 72066322CA00005 98.U04 – 72026320C00005 Award Year: FY 2022 – 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”Family Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 80 Section III – Federal Award Findings and Questioned Costs (continued) As per 2 CFR Part 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subaward information should be reported no later than the end of the month following the month in which the obligation was made. Condition: We noted the following matters during our testing of the Federal Funding Accountability and Transparency Act (FFATA) reporting compliance requirements: See chart/table in the schedule of findings and questioned costs Cause: A thorough review of the required data elements prior to submission of the reports did not occur consistently in FY 2023. In addition, a detailed review of all new subaward agreements and/or modifications made during FY 2023 was not performed to identify reports that should have been submitted. Effect or Potential Effect: FHI 360 did not report accurate information or did not submit the required reports for first-tier subawards of $30,000 or more causing them not to be in compliance with federal reporting requirements. Questioned Costs: NoneFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 82 Section III – Federal Award Findings and Questioned Costs (continued) Context: Under the Transparency Act reporting requirements, each FFATA report includes the following key data elements: 1) Subawardee name, 2) Subawardee DUNS #, 3) Amount of Subaward, 4) Subaward Obligation/Action Date, 5) Subaward Number, 6) Subaward Project Description, 7) Subawardee Names and Compensation of Highly Compensated Officers, if thresholds are met and 8) Date of Report Submission. Testing of the FFATA reports included each of these data elements as well as verifying for timely submissions. The table presented above lists the specific data elements where errors were detected as well as any untimely or non-submission of the reports. Total federal expenditures under 98.001 and 98.U04 were $ 509,476,610 and $3,502,691, respectively, for the year ended September 30, 2023. Identification as a Repeat Finding: This is a repeat finding from prior year (2022-001). Recommendation: We recommend FHI 360 strengthen its internal controls and procedures over FFATA reporting to ensure they are both timely and accurately submitted to be in compliance with the federal reporting requirements. Views of Responsible Officials: Management will implement additional actions to enhance and strengthen previous year actions including global communications and meetings with key management teams, targeted and detailed refresher training on FFATA requirements and completion of the FSRS template via an e-module, and additional review of FFATA submissions via a centralized team to identify prospective transactions and perform a final review of data quality prior to data entry in FSRS. The additional review will focus on completeness and accuracy of submitted data and timeliness of submissions. Management notes there were prior year FFATA findings related to timeliness of submissions which EY concluded upon in May 2023, during the current fiscal period. The corrective action plan in response to the prior year findings was immediately developed and implemented. This fiscal year’s control exceptions related to timeliness were prior to the material findings being concluded upon and the corrective action plan being implemented
Finding 2023-001 – Reporting – Federal Funding Accountability and Transparency Act (FFATA) Identification of the federal program: Federal Agency: United States Agency for International Development Assistance Listing: 98.001 – USAID Foreign Assistance for Programs Overseas 98.U04 – USAID Foreign Assistance for Economic Growth Federal Award Identification Number 98.001 – 7200AA19CA00002; 72066418CA00001; 72044020CA00002; 72049218CA00008; 72060822CA00002; 72066322CA00005 98.U04 – 72026320C00005 Award Year: FY 2022 – 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”Family Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 80 Section III – Federal Award Findings and Questioned Costs (continued) As per 2 CFR Part 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subaward information should be reported no later than the end of the month following the month in which the obligation was made. Condition: We noted the following matters during our testing of the Federal Funding Accountability and Transparency Act (FFATA) reporting compliance requirements: See chart/table in the schedule of findings and questioned costs Cause: A thorough review of the required data elements prior to submission of the reports did not occur consistently in FY 2023. In addition, a detailed review of all new subaward agreements and/or modifications made during FY 2023 was not performed to identify reports that should have been submitted. Effect or Potential Effect: FHI 360 did not report accurate information or did not submit the required reports for first-tier subawards of $30,000 or more causing them not to be in compliance with federal reporting requirements. Questioned Costs: NoneFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 82 Section III – Federal Award Findings and Questioned Costs (continued) Context: Under the Transparency Act reporting requirements, each FFATA report includes the following key data elements: 1) Subawardee name, 2) Subawardee DUNS #, 3) Amount of Subaward, 4) Subaward Obligation/Action Date, 5) Subaward Number, 6) Subaward Project Description, 7) Subawardee Names and Compensation of Highly Compensated Officers, if thresholds are met and 8) Date of Report Submission. Testing of the FFATA reports included each of these data elements as well as verifying for timely submissions. The table presented above lists the specific data elements where errors were detected as well as any untimely or non-submission of the reports. Total federal expenditures under 98.001 and 98.U04 were $ 509,476,610 and $3,502,691, respectively, for the year ended September 30, 2023. Identification as a Repeat Finding: This is a repeat finding from prior year (2022-001). Recommendation: We recommend FHI 360 strengthen its internal controls and procedures over FFATA reporting to ensure they are both timely and accurately submitted to be in compliance with the federal reporting requirements. Views of Responsible Officials: Management will implement additional actions to enhance and strengthen previous year actions including global communications and meetings with key management teams, targeted and detailed refresher training on FFATA requirements and completion of the FSRS template via an e-module, and additional review of FFATA submissions via a centralized team to identify prospective transactions and perform a final review of data quality prior to data entry in FSRS. The additional review will focus on completeness and accuracy of submitted data and timeliness of submissions. Management notes there were prior year FFATA findings related to timeliness of submissions which EY concluded upon in May 2023, during the current fiscal period. The corrective action plan in response to the prior year findings was immediately developed and implemented. This fiscal year’s control exceptions related to timeliness were prior to the material findings being concluded upon and the corrective action plan being implemented
Finding 2023-001 – Reporting – Federal Funding Accountability and Transparency Act (FFATA) Identification of the federal program: Federal Agency: United States Agency for International Development Assistance Listing: 98.001 – USAID Foreign Assistance for Programs Overseas 98.U04 – USAID Foreign Assistance for Economic Growth Federal Award Identification Number 98.001 – 7200AA19CA00002; 72066418CA00001; 72044020CA00002; 72049218CA00008; 72060822CA00002; 72066322CA00005 98.U04 – 72026320C00005 Award Year: FY 2022 – 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”Family Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 80 Section III – Federal Award Findings and Questioned Costs (continued) As per 2 CFR Part 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subaward information should be reported no later than the end of the month following the month in which the obligation was made. Condition: We noted the following matters during our testing of the Federal Funding Accountability and Transparency Act (FFATA) reporting compliance requirements: See chart/table in the schedule of findings and questioned costs Cause: A thorough review of the required data elements prior to submission of the reports did not occur consistently in FY 2023. In addition, a detailed review of all new subaward agreements and/or modifications made during FY 2023 was not performed to identify reports that should have been submitted. Effect or Potential Effect: FHI 360 did not report accurate information or did not submit the required reports for first-tier subawards of $30,000 or more causing them not to be in compliance with federal reporting requirements. Questioned Costs: NoneFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 82 Section III – Federal Award Findings and Questioned Costs (continued) Context: Under the Transparency Act reporting requirements, each FFATA report includes the following key data elements: 1) Subawardee name, 2) Subawardee DUNS #, 3) Amount of Subaward, 4) Subaward Obligation/Action Date, 5) Subaward Number, 6) Subaward Project Description, 7) Subawardee Names and Compensation of Highly Compensated Officers, if thresholds are met and 8) Date of Report Submission. Testing of the FFATA reports included each of these data elements as well as verifying for timely submissions. The table presented above lists the specific data elements where errors were detected as well as any untimely or non-submission of the reports. Total federal expenditures under 98.001 and 98.U04 were $ 509,476,610 and $3,502,691, respectively, for the year ended September 30, 2023. Identification as a Repeat Finding: This is a repeat finding from prior year (2022-001). Recommendation: We recommend FHI 360 strengthen its internal controls and procedures over FFATA reporting to ensure they are both timely and accurately submitted to be in compliance with the federal reporting requirements. Views of Responsible Officials: Management will implement additional actions to enhance and strengthen previous year actions including global communications and meetings with key management teams, targeted and detailed refresher training on FFATA requirements and completion of the FSRS template via an e-module, and additional review of FFATA submissions via a centralized team to identify prospective transactions and perform a final review of data quality prior to data entry in FSRS. The additional review will focus on completeness and accuracy of submitted data and timeliness of submissions. Management notes there were prior year FFATA findings related to timeliness of submissions which EY concluded upon in May 2023, during the current fiscal period. The corrective action plan in response to the prior year findings was immediately developed and implemented. This fiscal year’s control exceptions related to timeliness were prior to the material findings being concluded upon and the corrective action plan being implemented
Finding 2023-001 – Reporting – Federal Funding Accountability and Transparency Act (FFATA) Identification of the federal program: Federal Agency: United States Agency for International Development Assistance Listing: 98.001 – USAID Foreign Assistance for Programs Overseas 98.U04 – USAID Foreign Assistance for Economic Growth Federal Award Identification Number 98.001 – 7200AA19CA00002; 72066418CA00001; 72044020CA00002; 72049218CA00008; 72060822CA00002; 72066322CA00005 98.U04 – 72026320C00005 Award Year: FY 2022 – 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”Family Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 80 Section III – Federal Award Findings and Questioned Costs (continued) As per 2 CFR Part 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subaward information should be reported no later than the end of the month following the month in which the obligation was made. Condition: We noted the following matters during our testing of the Federal Funding Accountability and Transparency Act (FFATA) reporting compliance requirements: See chart/table in the schedule of findings and questioned costs Cause: A thorough review of the required data elements prior to submission of the reports did not occur consistently in FY 2023. In addition, a detailed review of all new subaward agreements and/or modifications made during FY 2023 was not performed to identify reports that should have been submitted. Effect or Potential Effect: FHI 360 did not report accurate information or did not submit the required reports for first-tier subawards of $30,000 or more causing them not to be in compliance with federal reporting requirements. Questioned Costs: NoneFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 82 Section III – Federal Award Findings and Questioned Costs (continued) Context: Under the Transparency Act reporting requirements, each FFATA report includes the following key data elements: 1) Subawardee name, 2) Subawardee DUNS #, 3) Amount of Subaward, 4) Subaward Obligation/Action Date, 5) Subaward Number, 6) Subaward Project Description, 7) Subawardee Names and Compensation of Highly Compensated Officers, if thresholds are met and 8) Date of Report Submission. Testing of the FFATA reports included each of these data elements as well as verifying for timely submissions. The table presented above lists the specific data elements where errors were detected as well as any untimely or non-submission of the reports. Total federal expenditures under 98.001 and 98.U04 were $ 509,476,610 and $3,502,691, respectively, for the year ended September 30, 2023. Identification as a Repeat Finding: This is a repeat finding from prior year (2022-001). Recommendation: We recommend FHI 360 strengthen its internal controls and procedures over FFATA reporting to ensure they are both timely and accurately submitted to be in compliance with the federal reporting requirements. Views of Responsible Officials: Management will implement additional actions to enhance and strengthen previous year actions including global communications and meetings with key management teams, targeted and detailed refresher training on FFATA requirements and completion of the FSRS template via an e-module, and additional review of FFATA submissions via a centralized team to identify prospective transactions and perform a final review of data quality prior to data entry in FSRS. The additional review will focus on completeness and accuracy of submitted data and timeliness of submissions. Management notes there were prior year FFATA findings related to timeliness of submissions which EY concluded upon in May 2023, during the current fiscal period. The corrective action plan in response to the prior year findings was immediately developed and implemented. This fiscal year’s control exceptions related to timeliness were prior to the material findings being concluded upon and the corrective action plan being implemented
Finding 2023-001 – Reporting – Federal Funding Accountability and Transparency Act (FFATA) Identification of the federal program: Federal Agency: United States Agency for International Development Assistance Listing: 98.001 – USAID Foreign Assistance for Programs Overseas 98.U04 – USAID Foreign Assistance for Economic Growth Federal Award Identification Number 98.001 – 7200AA19CA00002; 72066418CA00001; 72044020CA00002; 72049218CA00008; 72060822CA00002; 72066322CA00005 98.U04 – 72026320C00005 Award Year: FY 2022 – 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”Family Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 80 Section III – Federal Award Findings and Questioned Costs (continued) As per 2 CFR Part 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subaward information should be reported no later than the end of the month following the month in which the obligation was made. Condition: We noted the following matters during our testing of the Federal Funding Accountability and Transparency Act (FFATA) reporting compliance requirements: See chart/table in the schedule of findings and questioned costs Cause: A thorough review of the required data elements prior to submission of the reports did not occur consistently in FY 2023. In addition, a detailed review of all new subaward agreements and/or modifications made during FY 2023 was not performed to identify reports that should have been submitted. Effect or Potential Effect: FHI 360 did not report accurate information or did not submit the required reports for first-tier subawards of $30,000 or more causing them not to be in compliance with federal reporting requirements. Questioned Costs: NoneFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 82 Section III – Federal Award Findings and Questioned Costs (continued) Context: Under the Transparency Act reporting requirements, each FFATA report includes the following key data elements: 1) Subawardee name, 2) Subawardee DUNS #, 3) Amount of Subaward, 4) Subaward Obligation/Action Date, 5) Subaward Number, 6) Subaward Project Description, 7) Subawardee Names and Compensation of Highly Compensated Officers, if thresholds are met and 8) Date of Report Submission. Testing of the FFATA reports included each of these data elements as well as verifying for timely submissions. The table presented above lists the specific data elements where errors were detected as well as any untimely or non-submission of the reports. Total federal expenditures under 98.001 and 98.U04 were $ 509,476,610 and $3,502,691, respectively, for the year ended September 30, 2023. Identification as a Repeat Finding: This is a repeat finding from prior year (2022-001). Recommendation: We recommend FHI 360 strengthen its internal controls and procedures over FFATA reporting to ensure they are both timely and accurately submitted to be in compliance with the federal reporting requirements. Views of Responsible Officials: Management will implement additional actions to enhance and strengthen previous year actions including global communications and meetings with key management teams, targeted and detailed refresher training on FFATA requirements and completion of the FSRS template via an e-module, and additional review of FFATA submissions via a centralized team to identify prospective transactions and perform a final review of data quality prior to data entry in FSRS. The additional review will focus on completeness and accuracy of submitted data and timeliness of submissions. Management notes there were prior year FFATA findings related to timeliness of submissions which EY concluded upon in May 2023, during the current fiscal period. The corrective action plan in response to the prior year findings was immediately developed and implemented. This fiscal year’s control exceptions related to timeliness were prior to the material findings being concluded upon and the corrective action plan being implemented
Finding 2023-001 – Reporting – Federal Funding Accountability and Transparency Act (FFATA) Identification of the federal program: Federal Agency: United States Agency for International Development Assistance Listing: 98.001 – USAID Foreign Assistance for Programs Overseas 98.U04 – USAID Foreign Assistance for Economic Growth Federal Award Identification Number 98.001 – 7200AA19CA00002; 72066418CA00001; 72044020CA00002; 72049218CA00008; 72060822CA00002; 72066322CA00005 98.U04 – 72026320C00005 Award Year: FY 2022 – 2023 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”Family Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 80 Section III – Federal Award Findings and Questioned Costs (continued) As per 2 CFR Part 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subaward information should be reported no later than the end of the month following the month in which the obligation was made. Condition: We noted the following matters during our testing of the Federal Funding Accountability and Transparency Act (FFATA) reporting compliance requirements: See chart/table in the schedule of findings and questioned costs Cause: A thorough review of the required data elements prior to submission of the reports did not occur consistently in FY 2023. In addition, a detailed review of all new subaward agreements and/or modifications made during FY 2023 was not performed to identify reports that should have been submitted. Effect or Potential Effect: FHI 360 did not report accurate information or did not submit the required reports for first-tier subawards of $30,000 or more causing them not to be in compliance with federal reporting requirements. Questioned Costs: NoneFamily Health International Schedule of Findings and Questioned Costs (continued) Year Ended September 30, 2023 2311-4384437 82 Section III – Federal Award Findings and Questioned Costs (continued) Context: Under the Transparency Act reporting requirements, each FFATA report includes the following key data elements: 1) Subawardee name, 2) Subawardee DUNS #, 3) Amount of Subaward, 4) Subaward Obligation/Action Date, 5) Subaward Number, 6) Subaward Project Description, 7) Subawardee Names and Compensation of Highly Compensated Officers, if thresholds are met and 8) Date of Report Submission. Testing of the FFATA reports included each of these data elements as well as verifying for timely submissions. The table presented above lists the specific data elements where errors were detected as well as any untimely or non-submission of the reports. Total federal expenditures under 98.001 and 98.U04 were $ 509,476,610 and $3,502,691, respectively, for the year ended September 30, 2023. Identification as a Repeat Finding: This is a repeat finding from prior year (2022-001). Recommendation: We recommend FHI 360 strengthen its internal controls and procedures over FFATA reporting to ensure they are both timely and accurately submitted to be in compliance with the federal reporting requirements. Views of Responsible Officials: Management will implement additional actions to enhance and strengthen previous year actions including global communications and meetings with key management teams, targeted and detailed refresher training on FFATA requirements and completion of the FSRS template via an e-module, and additional review of FFATA submissions via a centralized team to identify prospective transactions and perform a final review of data quality prior to data entry in FSRS. The additional review will focus on completeness and accuracy of submitted data and timeliness of submissions. Management notes there were prior year FFATA findings related to timeliness of submissions which EY concluded upon in May 2023, during the current fiscal period. The corrective action plan in response to the prior year findings was immediately developed and implemented. This fiscal year’s control exceptions related to timeliness were prior to the material findings being concluded upon and the corrective action plan being implemented
Criteria: Per section 3401(a) of the American Rescue Plan (ARP) Act of 2021, ARP funds shall be available for reimbursement for: (a) payroll of public transportation entities, (b) operating costs to maintain service due to lost revenue due as a result of the coronavirus public health emergency, and (c) paying administrative leave of operations or contractor personnel due to reductions of service. In addition, Title 2 CFR § 200.303 requires the recipient of federal funds 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. Moreover, Title 2 CFR 200.403 (a) and (b) state that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance of the Federal award and be allocable thereto under 2 CFR part 200, subpart E, and (b) conform to any limitations or exclusions set forth in 2 CFR part 200, subpart E or in the Federal award as to types or amount of cost items. Condition: As part of audit procedures over a sample of 25 non-payroll transactions we identified one transaction for $8,510 relating to legislative consulting services which was not an allowable activity under the grant agreement. As a result of further review of the general ledger account in which the above item was recorded, we identified 13 additional transactions for similar unallowable activities representing $581,987. We did not identify any indirect costs that were associated with these unallowable costs. Total questioned cost identified through the audit procedures performed was approximately $590,403. Total expenditures for the Federal Transit Cluster were approximately $243,258,597. Cause: Historically, grants received by METRO have generally been specific to specified projects, which allowed METRO to establish projects in advance for tracking, accumulating, and approving/monitoring costs incurred. As such, METRO’s internal controls are designed with this project-based focus in mind. In the current year METRO received this grant which allows them to seek reimbursement for certain prior year costs not already reimbursed by the Federal government. Given the broad nature of costs allowed under this grant and the ability to seek reimbursement for prior year costs, management identified costs which were included in general ledger accounts not typically subject to detailed allowability assessments in accordance with federal requirements, and as a result METRO inadvertently placed an increased reliance on the knowledge of grants department personnel to understand the nature of general ledger accounts and transactions, as well as an increased reliance on reviewers identifying unallowable costs in the summary of expenditures submitted for reimbursement. Effect: Certain of the costs incurred and submitted for reimbursement by METRO were unallowable. Auditor’s Recommendation: METRO should establish appropriate processes and controls to guide grant personnel in the aggregation of grant costs. In particular, management should focus on the processes and controls associated with grants for which predefined projects are not established in advance of incurring grant related expenditures.
Criteria: Per section 3401(a) of the American Rescue Plan (ARP) Act of 2021, ARP funds shall be available for reimbursement for: (a) payroll of public transportation entities, (b) operating costs to maintain service due to lost revenue due as a result of the coronavirus public health emergency, and (c) paying administrative leave of operations or contractor personnel due to reductions of service. In addition, Title 2 CFR § 200.303 requires the recipient of federal funds 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. Moreover, Title 2 CFR 200.403 (a) and (b) state that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance of the Federal award and be allocable thereto under 2 CFR part 200, subpart E, and (b) conform to any limitations or exclusions set forth in 2 CFR part 200, subpart E or in the Federal award as to types or amount of cost items. Condition: As part of audit procedures over a sample of 25 non-payroll transactions we identified one transaction for $8,510 relating to legislative consulting services which was not an allowable activity under the grant agreement. As a result of further review of the general ledger account in which the above item was recorded, we identified 13 additional transactions for similar unallowable activities representing $581,987. We did not identify any indirect costs that were associated with these unallowable costs. Total questioned cost identified through the audit procedures performed was approximately $590,403. Total expenditures for the Federal Transit Cluster were approximately $243,258,597. Cause: Historically, grants received by METRO have generally been specific to specified projects, which allowed METRO to establish projects in advance for tracking, accumulating, and approving/monitoring costs incurred. As such, METRO’s internal controls are designed with this project-based focus in mind. In the current year METRO received this grant which allows them to seek reimbursement for certain prior year costs not already reimbursed by the Federal government. Given the broad nature of costs allowed under this grant and the ability to seek reimbursement for prior year costs, management identified costs which were included in general ledger accounts not typically subject to detailed allowability assessments in accordance with federal requirements, and as a result METRO inadvertently placed an increased reliance on the knowledge of grants department personnel to understand the nature of general ledger accounts and transactions, as well as an increased reliance on reviewers identifying unallowable costs in the summary of expenditures submitted for reimbursement. Effect: Certain of the costs incurred and submitted for reimbursement by METRO were unallowable. Auditor’s Recommendation: METRO should establish appropriate processes and controls to guide grant personnel in the aggregation of grant costs. In particular, management should focus on the processes and controls associated with grants for which predefined projects are not established in advance of incurring grant related expenditures.
Criteria: Per section 3401(a) of the American Rescue Plan (ARP) Act of 2021, ARP funds shall be available for reimbursement for: (a) payroll of public transportation entities, (b) operating costs to maintain service due to lost revenue due as a result of the coronavirus public health emergency, and (c) paying administrative leave of operations or contractor personnel due to reductions of service. In addition, Title 2 CFR § 200.303 requires the recipient of federal funds 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. Moreover, Title 2 CFR 200.403 (a) and (b) state that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance of the Federal award and be allocable thereto under 2 CFR part 200, subpart E, and (b) conform to any limitations or exclusions set forth in 2 CFR part 200, subpart E or in the Federal award as to types or amount of cost items. Condition: As part of audit procedures over a sample of 25 non-payroll transactions we identified one transaction for $8,510 relating to legislative consulting services which was not an allowable activity under the grant agreement. As a result of further review of the general ledger account in which the above item was recorded, we identified 13 additional transactions for similar unallowable activities representing $581,987. We did not identify any indirect costs that were associated with these unallowable costs. Total questioned cost identified through the audit procedures performed was approximately $590,403. Total expenditures for the Federal Transit Cluster were approximately $243,258,597. Cause: Historically, grants received by METRO have generally been specific to specified projects, which allowed METRO to establish projects in advance for tracking, accumulating, and approving/monitoring costs incurred. As such, METRO’s internal controls are designed with this project-based focus in mind. In the current year METRO received this grant which allows them to seek reimbursement for certain prior year costs not already reimbursed by the Federal government. Given the broad nature of costs allowed under this grant and the ability to seek reimbursement for prior year costs, management identified costs which were included in general ledger accounts not typically subject to detailed allowability assessments in accordance with federal requirements, and as a result METRO inadvertently placed an increased reliance on the knowledge of grants department personnel to understand the nature of general ledger accounts and transactions, as well as an increased reliance on reviewers identifying unallowable costs in the summary of expenditures submitted for reimbursement. Effect: Certain of the costs incurred and submitted for reimbursement by METRO were unallowable. Auditor’s Recommendation: METRO should establish appropriate processes and controls to guide grant personnel in the aggregation of grant costs. In particular, management should focus on the processes and controls associated with grants for which predefined projects are not established in advance of incurring grant related expenditures.
Criteria: Per section 3401(a) of the American Rescue Plan (ARP) Act of 2021, ARP funds shall be available for reimbursement for: (a) payroll of public transportation entities, (b) operating costs to maintain service due to lost revenue due as a result of the coronavirus public health emergency, and (c) paying administrative leave of operations or contractor personnel due to reductions of service. In addition, Title 2 CFR § 200.303 requires the recipient of federal funds 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. Moreover, Title 2 CFR 200.403 (a) and (b) state that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance of the Federal award and be allocable thereto under 2 CFR part 200, subpart E, and (b) conform to any limitations or exclusions set forth in 2 CFR part 200, subpart E or in the Federal award as to types or amount of cost items. Condition: As part of audit procedures over a sample of 25 non-payroll transactions we identified one transaction for $8,510 relating to legislative consulting services which was not an allowable activity under the grant agreement. As a result of further review of the general ledger account in which the above item was recorded, we identified 13 additional transactions for similar unallowable activities representing $581,987. We did not identify any indirect costs that were associated with these unallowable costs. Total questioned cost identified through the audit procedures performed was approximately $590,403. Total expenditures for the Federal Transit Cluster were approximately $243,258,597. Cause: Historically, grants received by METRO have generally been specific to specified projects, which allowed METRO to establish projects in advance for tracking, accumulating, and approving/monitoring costs incurred. As such, METRO’s internal controls are designed with this project-based focus in mind. In the current year METRO received this grant which allows them to seek reimbursement for certain prior year costs not already reimbursed by the Federal government. Given the broad nature of costs allowed under this grant and the ability to seek reimbursement for prior year costs, management identified costs which were included in general ledger accounts not typically subject to detailed allowability assessments in accordance with federal requirements, and as a result METRO inadvertently placed an increased reliance on the knowledge of grants department personnel to understand the nature of general ledger accounts and transactions, as well as an increased reliance on reviewers identifying unallowable costs in the summary of expenditures submitted for reimbursement. Effect: Certain of the costs incurred and submitted for reimbursement by METRO were unallowable. Auditor’s Recommendation: METRO should establish appropriate processes and controls to guide grant personnel in the aggregation of grant costs. In particular, management should focus on the processes and controls associated with grants for which predefined projects are not established in advance of incurring grant related expenditures.
Item 2023‐002 Written policies, procedures, and standards of conduct COVID 19 – Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number 21.027 U.S. Department of Treasury Grant period: Year ended September 30, 2023 Questioned Costs – $0 Condition – The City does not have all of the written policies, procedures and standards of conduct required by UG. Criteria – 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.” Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non‐ Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non‐ Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: § 200.302 Financial management § 200.305 Payment § 200.319 Competition § 200.320 Methods of procurement to be followed § 200.430 Compensation—personal services § 200.431 Compensation—fringe benefits Cause of Condition – The City has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Potential Effect of Condition – Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation – We recommend that the City implement the required written policies and procedures. Management’s Response – Management agrees with the finding and will implement the necessary written policies to comply with the UG. Management anticipates completion by September 30, 2024.
Item 2023‐003 Performance Reporting – Annual Project and Expenditure Report Coronavirus State and Local Fiscal Recovery Fund ALN# 21.027 U.S. Department of Treasury Grant period – Year ended September 30, 2023 Criteria – 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.” Grantees should have controls in place to ensure that required reporting requirements under the compliance supplement are satisfied. 2 CFR 200.328 requires the City to file the Annual Project and Expenditure Report under the Performance Reporting requirement of the grant. Condition – Adequate controls were not in place to ensure that annual reporting was filed in accordance with performance reporting requirements. Cause – Changes in leadership roles at the grantee led to a lack of sufficient controls over the communication of the reporting requirement to ensure the accuracy and completeness of performance reporting under the grant. Effect – Lack of notification of the reporting requirement could lead to disallowed costs. We noted that the annual report was subsequently submitted to the grantor. However, our audit disclosed no instances of unallowable costs. Questioned Costs – Not determinable. Recommendation – We recommend the strengthening of controls to ensure annual reporting required under the compliance supplement is performed in a timely manner. Management’s Response – The City will strengthen the controls in place to provide assurance that annual reporting is performed timely in accordance with program guidelines.
Finding No. 2023-004: Internal Control over Period of Performance – Significant Deficiency in Internal Control over Compliance U.S. Agency for International Development, USAID Foreign Assistant for Programs Overseas, Assistance Listing Number 98.001. Criteria As per the Code of Federal Regulations (CFR) § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). This includes ensuring that expenses are incurred during the period of performance stated in the federal award. Context During our testing over the period of performance, we noted 3 payroll charges that were recorded to the grant after the period of performance on the grant award had ended. The Organization was able to replace the $1,824 in payroll charges with eligible consultant charges incurred during the period to support the recognition of this total. Cause This was due to a breakdown in internal control over the review and approval of charges incurred by the appropriate personnel for amounts charged against the federal award. Effect Charging expenditures incurred outside of the award period can result in refusal of these reimbursements by the federal grantor as well as the possibility of loss of grant funding for future periods. Questioned Costs None Recommendation We recommend that the Organization review and enhance its current internal control procedures over its financial close process specifically related to the period of performance around federal awards to ensure that there are procedures in place to ensure that the expenditures claimed fall within the appropriate period of the federal award and are recognized in the correct period in accordance with generally accepted accounting principles on a timely basis. Views of Responsible Officials and Planned Corrective Actions See Corrective Action Plan
Item 2023‐001 – Suspension and Debarment (Repeat) COVID-19 Coronavirus State and Local Fiscal Recovery – ALN # 21.027 U.S. Department of Treasury Federal Award Year ‐ 2021 Criteria – 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.” Non‐Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition – Adequate controls were not in place to provide for proper review of covered transactions for suspension and debarment. Covered transactions, over $25,000 paid with grant funding were not reviewed for suspension and debarment. Cause – The County lacked sufficient controls to ensure evidence of compliance with suspension and debarment. Questioned Costs – Not determinable Effect – Failure to properly verify that a potential vendor has not been suspended or debarred could result in unallowable expenditures and disallowed costs. Recommendation – We recommend that controls should be put into place to better monitor and document the compliance of vendors for suspension and debarment. Management’s Response – Management agrees with the finding. The County will implement additional controls to ensure there is evidence of review of covered transactions over $25,000 for suspension and debarment prior to payment. Deputy Clerk, Finance will be responsible for the corrective action and anticipates completion of corrective action will be taken before September 30, 2024.
Item 2023‐001 (Originally of 2022‐001) Special Tests and Provisions – Wage Rate Requirements Education Stabilization Fund (ESF) ALN# 84.425 (Repeated) U.S. Department of Education Passed through the State Department of Education Grant period – Years ended September 30, 2022 and September 30, 2023 (84.425U) (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 provided 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 payments to contractors did not have supporting documentation of certified payrolls. However, our audit disclosed no instances of unallowable costs. Questioned Costs – $110,029. 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 from each week in which construction work is performed.
Item 2023‐001 (Originally of 2022‐001) Special Tests and Provisions – Wage Rate Requirements Education Stabilization Fund (ESF) ALN# 84.425 (Repeated) U.S. Department of Education Passed through the State Department of Education Grant period – Years ended September 30, 2022 and September 30, 2023 (84.425U) (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 provided 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 payments to contractors did not have supporting documentation of certified payrolls. However, our audit disclosed no instances of unallowable costs. Questioned Costs – $110,029. 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 from each week in which construction work is performed.
Item 2023‐002 – Equipment and Real Property Management Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Year ended September 30, 2023 (84.425U) (84.425D) Criteria – Grantees should have controls in place to ensure that all capital equipment or improvements to land, building, or equipment that were purchased with grant funds received prior approval prior to encumbrance of the expenditure. 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 200.313 and 2 CFR 200.439 requires that the following rules of allow ability must apply to equipment and other capital expenditures “Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass‐through entity.” Condition – Adequate controls were not in place to ensure that prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment was obtained prior to incurring the expenditure. Cause – Certain Capital Equipment and improvements to building expenditures were not included in the approved budget to grantor. There was a lack of sufficient controls over the review of capital expenditures to ensure that they were included in the approved budget. Effect – Lack of approval over equipment and capital improvements could lead to disallowed costs. We noted that certain equipment and improvement projects were not included in approved budget for ESSER Funds. Questioned Costs – $33,716 Recommendation – We recommend the strengthening of controls to ensure that proper approval is received prior to the acquisition of improvements to land, building or equipment. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper approval is obtained from grantor agency prior to the purchase of equipment and real property.
Item 2023‐002 – Equipment and Real Property Management Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Year ended September 30, 2023 (84.425U) (84.425D) Criteria – Grantees should have controls in place to ensure that all capital equipment or improvements to land, building, or equipment that were purchased with grant funds received prior approval prior to encumbrance of the expenditure. 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 200.313 and 2 CFR 200.439 requires that the following rules of allow ability must apply to equipment and other capital expenditures “Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass‐through entity.” Condition – Adequate controls were not in place to ensure that prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment was obtained prior to incurring the expenditure. Cause – Certain Capital Equipment and improvements to building expenditures were not included in the approved budget to grantor. There was a lack of sufficient controls over the review of capital expenditures to ensure that they were included in the approved budget. Effect – Lack of approval over equipment and capital improvements could lead to disallowed costs. We noted that certain equipment and improvement projects were not included in approved budget for ESSER Funds. Questioned Costs – $33,716 Recommendation – We recommend the strengthening of controls to ensure that proper approval is received prior to the acquisition of improvements to land, building or equipment. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper approval is obtained from grantor agency prior to the purchase of equipment and real property.
Item 2023-003: Reporting [See table in report] Federal and state agencies: • 93.231, 93.479, 93.772 – U.S. Department of Health and Human Services • 435.566 – Wisconsin Department of Health Services • 445.65859 – Wisconsin Department of Workforce Development Pass-through entity: None Criteria: The Organization is required to comply with 2 CFR section 200.303 which 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: During our testing of reporting requirements, we noted that there was no documentation that reports were reviewed prior to submission to grantor. Cause: Staffing changes in the finance department. A review is performed, however this review is not documented due to the electronic filing of the reports. Due to these events, management has not documented review of the reports. Effect: Likelihood of inaccurate reporting is increased when reports are not thoroughly reviewed. Questioned costs: None Prevalence: The population of reports subject to reporting requirements included 28 reports. For 13 of the 13 reports tested, the Organization did not have documentation showing the reports were reviewed. The sample size of 13 was determined using guidance in the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide—Government Auditing Standards and Single Audits. Our sample was not a statistical sample. Repeat finding: No Recommendation: We recommend that the Organization review their processes to ensure review of all reports required are accurately reviewed and documented. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2023-003: Reporting [See table in report] Federal and state agencies: • 93.231, 93.479, 93.772 – U.S. Department of Health and Human Services • 435.566 – Wisconsin Department of Health Services • 445.65859 – Wisconsin Department of Workforce Development Pass-through entity: None Criteria: The Organization is required to comply with 2 CFR section 200.303 which 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: During our testing of reporting requirements, we noted that there was no documentation that reports were reviewed prior to submission to grantor. Cause: Staffing changes in the finance department. A review is performed, however this review is not documented due to the electronic filing of the reports. Due to these events, management has not documented review of the reports. Effect: Likelihood of inaccurate reporting is increased when reports are not thoroughly reviewed. Questioned costs: None Prevalence: The population of reports subject to reporting requirements included 28 reports. For 13 of the 13 reports tested, the Organization did not have documentation showing the reports were reviewed. The sample size of 13 was determined using guidance in the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide—Government Auditing Standards and Single Audits. Our sample was not a statistical sample. Repeat finding: No Recommendation: We recommend that the Organization review their processes to ensure review of all reports required are accurately reviewed and documented. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2023-003: Reporting [See table in report] Federal and state agencies: • 93.231, 93.479, 93.772 – U.S. Department of Health and Human Services • 435.566 – Wisconsin Department of Health Services • 445.65859 – Wisconsin Department of Workforce Development Pass-through entity: None Criteria: The Organization is required to comply with 2 CFR section 200.303 which 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: During our testing of reporting requirements, we noted that there was no documentation that reports were reviewed prior to submission to grantor. Cause: Staffing changes in the finance department. A review is performed, however this review is not documented due to the electronic filing of the reports. Due to these events, management has not documented review of the reports. Effect: Likelihood of inaccurate reporting is increased when reports are not thoroughly reviewed. Questioned costs: None Prevalence: The population of reports subject to reporting requirements included 28 reports. For 13 of the 13 reports tested, the Organization did not have documentation showing the reports were reviewed. The sample size of 13 was determined using guidance in the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide—Government Auditing Standards and Single Audits. Our sample was not a statistical sample. Repeat finding: No Recommendation: We recommend that the Organization review their processes to ensure review of all reports required are accurately reviewed and documented. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2023-003: Reporting [See table in report] Federal and state agencies: • 93.231, 93.479, 93.772 – U.S. Department of Health and Human Services • 435.566 – Wisconsin Department of Health Services • 445.65859 – Wisconsin Department of Workforce Development Pass-through entity: None Criteria: The Organization is required to comply with 2 CFR section 200.303 which 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: During our testing of reporting requirements, we noted that there was no documentation that reports were reviewed prior to submission to grantor. Cause: Staffing changes in the finance department. A review is performed, however this review is not documented due to the electronic filing of the reports. Due to these events, management has not documented review of the reports. Effect: Likelihood of inaccurate reporting is increased when reports are not thoroughly reviewed. Questioned costs: None Prevalence: The population of reports subject to reporting requirements included 28 reports. For 13 of the 13 reports tested, the Organization did not have documentation showing the reports were reviewed. The sample size of 13 was determined using guidance in the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide—Government Auditing Standards and Single Audits. Our sample was not a statistical sample. Repeat finding: No Recommendation: We recommend that the Organization review their processes to ensure review of all reports required are accurately reviewed and documented. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Section III – Federal Award Findings and Questioned Costs Finding 2023-002: Overdrawn Federal Funding Compliance Requirement: Allowable Costs/Costs Principles and Cash Management Type: Material Noncompliance and Material Weakness over Internal Control Federal Agency: U.S. Department of Health and Human Services AL Numbers and Titles: 93.809 – National Center for Chronic Disease Prevention and Health Promotion Federal Award Number: NU58DP006510 Questioned Costs: $380,644 Repeat Finding: No Criteria: NACDD requests funds from the U.S. Department of Health and Human Services under the advance payment method. In accordance with 45 CFR 74.22, cash advances to a recipient organization shall be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the recipient organization in carrying out the purpose of the approved program or project. The timing and amount of cash advances shall be as close as is administratively feasible to the actual disbursements by the recipient organization for direct program or project costs and the proportionate share of any allowable indirect costs. According to 2 CFR §200.403 - §200.405 (Allowable Costs/Cost Principles), costs must be necessary, reasonable, and allocable to the federal award. Additionally, Section 200.303 of the Uniform Guidance indicates that 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 statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” (Green Book) issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by COSO. The Office of Management and Budget (OMB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition: During our testing, we identified duplicated federal award expenditures amounting to $380,644, resulting in overdrawn federal funds by $380,644. The excess cash on hand was not returned to the funding source in a timely manner. Cause: This issue occurred due to inadequate controls over the recording of expenses and the drawdown of federal funds. 28 ASSOCIATION OF STATE AND TERRITORIAL CHRONIC DISEASE PROGRAM DIRECTORS D/B/A THE NATIONAL ASSOCIATION OF CHRONIC DISEASE DIRECTORS SCHEDULE OF FINDINGS AND QUESTIONED COSTS - Continued Section III – Federal Award Findings and Questioned Costs – continued Finding 2023-002: Overdrawn Federal Funding - continued Effect: NACDD is not in compliance with federal regulations concerning allowable costs, disbursement of federal funds and excess cash. In addition, a lack of adequate controls over allowable costs and cash management could result in a reasonable possibility that NACDD would not detect errors in the normal course of performing duties and correct them in a timely manner. Recommendation: We recommend that management conduct regular reconciliations of grant expenses to identify and correct duplicate entries promptly and review cash management practices to prevent overdraws on federal funds. Views of Responsible Officials Corrective Actions: Management agrees with this finding. Please refer to the Corrective Action Plan.
MW 2023-001 REPORTING Assistance Listing No. 14.228 Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii 2022-2023 Funding U.S. Department of Housing and Urban Development Passed through the Florida Department of Economic Opportunity Per 2 CFR 200.303, non-Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance and the Florida Small Cities Community Development Block Grant Program Act. CONDITION: The following reports were not reviewed prior to submission to the State of Florida Department of Economic Opportunity: . Quarterly Progress Report, Form SC-65; i. Contract and Subcontract Activity form, Form HUD-2516; and ii. Section 3 Summary Report, form HUD-60002 Additionally, two out of the two Quarterly Progress Reports tested were filed late. For one out of the two Contract and Subcontract Activity forms tested, the City did not have evidence of the submission to the State of Florida Department of Economic Opportunity. CAUSE OF CONDITION: Procedures are not in place internally for the review and approval of reports required by the State of Florida Department of Economic Opportunity for CDBG grant funding. POTENTIAL EFFECT OF CONDITION: Potential for unintended errors to occur without being immediately identified and corrected. The City was not in compliance with the Uniform Guidance and the Florida Small Cities Community Development Block Grant Program Act. PERSPECTIVE: All of the reports identified above were not reviewed. RECOMMENDATION: Reports prepared by the Special Projects Manager should be reviewed by an independent person to ensure completeness and accuracy. Additionally, the City should design a control to ensure reports are submitted in a timely manner in accordance with compliance requirements. MANAGEMENT RESPONSE: The City agrees with the recommendation to strengthen internal controls over grant reporting processes. To enhance accountability and accuracy, grant reports authored by the designated grant recipient, who is the City employee tasked with managing the grant activity, will now undergo a review by someone else in the City independent of the report preparation. This review will focus on ensuring the reports are complete, accurate, and fully compliant with all stipulated grant requirements.
2023-002 – COVID 19: Community Development Block Grants/Entitlement Grants Federal Awarding Agency – U.S. Department of Housing and Urban Development Assistance Listing Number – 14.218 FAIN – B-20-UW-12-0017 & B-21-UC-12-0017 Award Year – 2021 & 2022 Questioned costs – none Criteria: 2 CFR Part 200 in general and 2 CFR section 200.303(a) require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, period of performance, and special tests and provisions – wage rate requirements. The related compliance requirements are set in 24 CFR Part 570 Subpart D and sections 570.200 through .710, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the April 30, 2021 Quick Guide, CDBG-CV PPR Tieback Flexibilities, Title I of the Housing Community Development Act (HCDA) of 1974, as amended (Pub. L. No. 93-383) (42 USC 5301), 2 CFR Part 200, Subpart E, Appendices III-V11, and sections 200.330, .331, and .501(h), 31 USC 1552, Section III.B.7 of CDBG-CV Notice, Section 110(a) of the HCD Act, federal awarding agency regulations, and the terms and conditions of the award. Condition: Internal controls related to review of certain invoices, including construction payments and payments to subrecipients, did not have evidence of all required approvals necessary to ensure compliance with allowable costs, cost principles, and period of performance requirements or such approvals were not documented in a manner that is reperformable. Weekly payroll reports were not reviewed as part of the special tests and provisions – wage rate requirements compliance requirement, resulting in material noncompliance. Cause: Internal controls over certain payments, including payments requiring review of contractor and subcontractor wage rates were not evidenced with clear documentation. Effect: Allowable costs, cost principles, and period of performance compliance requirements may not be met due to lack of reperformable internal controls. Wage rate requirements were not complied with. Recommendation: We recommend that the City ensure wage rate requirement compliance is prioritized when applicable. We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
2023-003 – COVID 19: Coronavirus State and Local Fiscal Recovery Funds Federal Awarding Agency – U.S. Department of the Treasury Assistance Listing Number – 21.027 FAIN – n/a Award Year – 2021 Questioned costs – none Criteria: 2 CFR Part 200 in general and 2 CFR sections 200.303(a) require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, and earmarking. The related compliance requirements are set in 2 CFR Part 200 sections 200.514(c), 200.212, 200.318(h), 200.332, 180.300 and subpart E; 48 CFR section 52.209-6; 31 CFR section 19.300; sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 as codified at 42 USC 802 and 803 and 31 CFR Part 35, federal awarding agency regulations, and the terms and conditions of the award. Condition: Controls related to calculation and reporting of lost revenue were not effective and the amount calculated as base year revenue was incorrectly reported. Cause: Base year calculation of revenue was performed using interim financial information and was not reconciled to final audited reports. Base year calculation of revenue was not clearly documented. Subsequent year revenue calculations were performed by a consultant who was not engaged to review the base year calculation. Controls over such calculations were not effective. Effect: Calculation of lost revenue was incorrectly reported. Expenditures related to the provision of government services related to such lost revenue did not exceed the actual lost revenue. Recommendation: We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
2023-003 – COVID 19: Coronavirus State and Local Fiscal Recovery Funds Federal Awarding Agency – U.S. Department of the Treasury Assistance Listing Number – 21.027 FAIN – n/a Award Year – 2021 Questioned costs – none Criteria: 2 CFR Part 200 in general and 2 CFR sections 200.303(a) require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, and earmarking. The related compliance requirements are set in 2 CFR Part 200 sections 200.514(c), 200.212, 200.318(h), 200.332, 180.300 and subpart E; 48 CFR section 52.209-6; 31 CFR section 19.300; sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 as codified at 42 USC 802 and 803 and 31 CFR Part 35, federal awarding agency regulations, and the terms and conditions of the award. Condition: Controls related to calculation and reporting of lost revenue were not effective and the amount calculated as base year revenue was incorrectly reported. Cause: Base year calculation of revenue was performed using interim financial information and was not reconciled to final audited reports. Base year calculation of revenue was not clearly documented. Subsequent year revenue calculations were performed by a consultant who was not engaged to review the base year calculation. Controls over such calculations were not effective. Effect: Calculation of lost revenue was incorrectly reported. Expenditures related to the provision of government services related to such lost revenue did not exceed the actual lost revenue. Recommendation: We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
Criteria: 2 CFR 200.303 requires that internal control must provide reasonable assurance that the Ministry complies with the requirements of the Uniform Guidance and its grant agreements. If not complied with, it could result in the disallowance of costs and repayment of funds to the granting agency. The standards mentioned above require that internal control be established and maintained to ensure compliance. Condition: The Ministry's Congregate Meal program reports meals served using computerized software. This information is prepared using original documentation prepared at the point of service. During the fiscal year under audit, instances were identified of inconsistencies between the software reports and the original documentation of the meals served to participants. Cause: The Ministry's procedures for preparing meal reports primarily relies on summary-level information and does not include more detailed reconciliations by individuals to the records prepared at the senior center. Effect or Potential Effect: The reported meal counts were materially in agreement with the underlying documentation, but the lack of more detailed review could cause reimbursement requests to be made for meals not actually served. Questioned Costs: None. Recommendation: We recommend the Ministry increase the detail of the review process over the tracking of meals, including both the financial function and those with direct knowledge and supervision of the services being performed. We recommend the Ministry consider additional training for program staff. Management’s Response: Management agrees with the recommendation and has established and implemented written procedures to ensure future compliance.
Criteria: 2 CFR 200.303 requires that internal control must provide reasonable assurance that the Ministry complies with the requirements of the Uniform Guidance and its grant agreements. If not complied with, it could result in the disallowance of costs and repayment of funds to the granting agency. The standards mentioned above require that internal control be established and maintained to ensure compliance. Condition: The Ministry's Congregate Meal program reports meals served using computerized software. This information is prepared using original documentation prepared at the point of service. During the fiscal year under audit, instances were identified of inconsistencies between the software reports and the original documentation of the meals served to participants. Cause: The Ministry's procedures for preparing meal reports primarily relies on summary-level information and does not include more detailed reconciliations by individuals to the records prepared at the senior center. Effect or Potential Effect: The reported meal counts were materially in agreement with the underlying documentation, but the lack of more detailed review could cause reimbursement requests to be made for meals not actually served. Questioned Costs: None. Recommendation: We recommend the Ministry increase the detail of the review process over the tracking of meals, including both the financial function and those with direct knowledge and supervision of the services being performed. We recommend the Ministry consider additional training for program staff. Management’s Response: Management agrees with the recommendation and has established and implemented written procedures to ensure future compliance.
2023-001 Retaining Sliding Scale Determination Documentation Special Tests and Provisions ALN 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) US Department of Health and Human Services Contract Numbers H80CS30749-06 and H80CS30749-07 Contract Periods April 1, 2022 – March 31, 2023 and April 1, 2023 – March 31, 2024 Conditions and Criteria: The requirement under 45 CFR 75.361 provides requirements for the retention of records for grantees. In addition, 2 CFR 200.303 provides requirements to establish and maintain effective internal controls over Federal awards. Specifically, it states that financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Health and Human Services awarding agency of pass-through entity in the case of a subrecipient. In the 2023 audit, for 5 out of 40 samples selected for testing, it was noted that OCHS did not retain the proper documents that the patients had submitted that included their income and family size or the documents completed by OCHS showing the sliding fee discount determination for these patients. Effect: The effect is that records that are required to be retained were not retained and evidence of how the sliding fee discount was determined could not be examined. Questioned Costs: Any likely questioned costs could not be determined since compliance testing was unable to be performed due to the lack of documentation. It should be noted that there were no exceptions for 35 samples that were able to be tested, and for 5 samples with insignificant documentation, 3 had partial documentation of income (i.e., pay stubs) and 2 had no documentation of income as it was not maintained. However, the sliding scale calculation was completed for all 40 samples. Cause: Determining the sliding fee discount level for each patient is reassessed on an annual basis. During the year, there was employee turnover in the compliance department. Although OCHS has a records retention policy, there was a lack of monitoring in place to ensure that the requirement under 45 CFR 75.361 was adhered to. Auditor Recommendation: A procedure should be put in place to monitor whether the record retention policy is followed. Planned Corrective Action: See the following Corrective Action Plan section for management’s planned corrective action.
2023-001 Retaining Sliding Scale Determination Documentation Special Tests and Provisions ALN 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) US Department of Health and Human Services Contract Numbers H80CS30749-06 and H80CS30749-07 Contract Periods April 1, 2022 – March 31, 2023 and April 1, 2023 – March 31, 2024 Conditions and Criteria: The requirement under 45 CFR 75.361 provides requirements for the retention of records for grantees. In addition, 2 CFR 200.303 provides requirements to establish and maintain effective internal controls over Federal awards. Specifically, it states that financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Health and Human Services awarding agency of pass-through entity in the case of a subrecipient. In the 2023 audit, for 5 out of 40 samples selected for testing, it was noted that OCHS did not retain the proper documents that the patients had submitted that included their income and family size or the documents completed by OCHS showing the sliding fee discount determination for these patients. Effect: The effect is that records that are required to be retained were not retained and evidence of how the sliding fee discount was determined could not be examined. Questioned Costs: Any likely questioned costs could not be determined since compliance testing was unable to be performed due to the lack of documentation. It should be noted that there were no exceptions for 35 samples that were able to be tested, and for 5 samples with insignificant documentation, 3 had partial documentation of income (i.e., pay stubs) and 2 had no documentation of income as it was not maintained. However, the sliding scale calculation was completed for all 40 samples. Cause: Determining the sliding fee discount level for each patient is reassessed on an annual basis. During the year, there was employee turnover in the compliance department. Although OCHS has a records retention policy, there was a lack of monitoring in place to ensure that the requirement under 45 CFR 75.361 was adhered to. Auditor Recommendation: A procedure should be put in place to monitor whether the record retention policy is followed. Planned Corrective Action: See the following Corrective Action Plan section for management’s planned corrective action.
2023-001 Retaining Sliding Scale Determination Documentation Special Tests and Provisions ALN 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) US Department of Health and Human Services Contract Numbers H80CS30749-06 and H80CS30749-07 Contract Periods April 1, 2022 – March 31, 2023 and April 1, 2023 – March 31, 2024 Conditions and Criteria: The requirement under 45 CFR 75.361 provides requirements for the retention of records for grantees. In addition, 2 CFR 200.303 provides requirements to establish and maintain effective internal controls over Federal awards. Specifically, it states that financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Health and Human Services awarding agency of pass-through entity in the case of a subrecipient. In the 2023 audit, for 5 out of 40 samples selected for testing, it was noted that OCHS did not retain the proper documents that the patients had submitted that included their income and family size or the documents completed by OCHS showing the sliding fee discount determination for these patients. Effect: The effect is that records that are required to be retained were not retained and evidence of how the sliding fee discount was determined could not be examined. Questioned Costs: Any likely questioned costs could not be determined since compliance testing was unable to be performed due to the lack of documentation. It should be noted that there were no exceptions for 35 samples that were able to be tested, and for 5 samples with insignificant documentation, 3 had partial documentation of income (i.e., pay stubs) and 2 had no documentation of income as it was not maintained. However, the sliding scale calculation was completed for all 40 samples. Cause: Determining the sliding fee discount level for each patient is reassessed on an annual basis. During the year, there was employee turnover in the compliance department. Although OCHS has a records retention policy, there was a lack of monitoring in place to ensure that the requirement under 45 CFR 75.361 was adhered to. Auditor Recommendation: A procedure should be put in place to monitor whether the record retention policy is followed. Planned Corrective Action: See the following Corrective Action Plan section for management’s planned corrective action.
2023-002 Reporting - Significant Deficiency AL Number and Title: 93.932 - Native Hawaiian Health Care Systems Award Number and Award Year: 5H1CCS0016-32-00 2022 Federal Agency: Department of Health and Human Services Criteria: 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. Condition: During our audit, we noted one instance out of forty that the employees timesheet did not agree to the payroll register. The hours on the timesheet were 45, while the hours on the payroll register were 48 hours. This resulted in an overcharge of $159 to the program. We also noted one out of seventy one timesheets were not approved by a supervisor. Cause: This finding was due to management oversight and a clerical error. Effect: Without an effective internal control system over allowable costs, costs may be charged to the federal aware improperly. Projecting this error to the amount of costs in the sample ($79,528) to the population ($1,464,088) resulted in a projected error of $2,927. As the projected error is less than $25,000, no amounts are reported as questioned costs. Repeat Finding? No Recommendation Ke Ola Mamo should exercise greater care in reviewing timesheets and data entered into the payroll system to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Planned Corrective Action Ke Ola Mamo agrees with the finding and the recommendation. See Part V Correction Action Plan.
Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
GRANT REPORTING U.S. Department of Treasury ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds Contract No. 23.saa.900.46 (2023) Passed through the Florida Department of State Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls. Reports and reimbursement requests should be subject to independent review to verify completeness, validity and timeliness of submission. Condition: Review of quarterly reports was not documented by City officials before submittal by their third party consultant. Cause of condition: The City does not have a process in place to document their review of progress reports submitted to the Florida Department of State by their third party consultant. Potential effect of condition: Reports submitted to the Florida Department of State may be incomplete, include errors, or be submitted late. Perspective: The City utilized a third party consultant to assist in the management of this specific grant contract under this federal program. CRI noted the City did have documentation of review of grant reports prepared by the City for the other grant contract awarded to the City under this federal program. 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 independently reviewed prior to being submitted to the grantor. This should include review of reports prepared by any third party consultants. Management’s Response: The City will update its control process to incorporate procedures to ensure that reviews of reports prepared by third party consultants are subject to independent review by City personnel prior to the reports being remitted to the grantor and that such reviews will be documented.
SUSPENSION AND DEBARMENT U.S. Department of Treasury ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds Contract No. 23.saa.900.46 (2023) Passed through the Florida Department of State U.S. Department of Environmental Protection ALN 66.458 – Clean Water State Revolving Funds Cluster Contract No. WW6409A0/4C-02D38022-0 (2022) Passed through the Florida Department of Environmental Protection U.S. Department of Environmental Protection ALN 66.468 – Drinking Water State Revolving Funds Cluster Contract No. DW640990/FS98452220-0 (2021) Passed through the Florida Department of Environmental Protection Criteria: 2 CFR 180.300 requires the City to ensure vendors and contractors are not disqualified, excluded, or debarred prior to entering into a covered transaction. Further, 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls. The City should have a process to ensure compliance with 2 CFR 180.300. Condition: The City did not document their initial verification (SAM check) that a vendor was not suspended or debarred before entering into a covered transaction for all vendors and contractors participating on Federally-funded projects, and follow-up verifications were not consistently performed. Cause of condition: Procedures for documentation of verification that vendors or contractors were eligible to participate on federally-funded projects checks were not consistently applied to all vendors. Potential effect of condition: Without initial verification of a vendor’s status to participate on federally-funded projects and timely follow-up SAM checks, the City may inadvertently enter into covered transactions with federally suspended or debarred vendors. Perspective: The City properly performed SAM checks for some, but not all, of the vendors and contractors used in covered transactions. None of the vendors tested during our audit were disqualified, excluded, or debarred per verification performed by the auditors. Additionally, the Florida Department of Environmental Protection and the Florida Department of State provide for on-going oversight and review, which mitigates the risk of non-compliance. Questioned costs: None. Recommendation: The City should evaluate its current procedures for ensuring that vendors are eligible to participate in federally-funded projects prior to signing contracts or issuing purchase orders to those vendors. Changes to procedures should be implemented, as necessary, to improve controls over compliance. Additionally, a process for periodic follow-up verification should be performed no less than annually. Management’s Response: The City will set up the following controls to monitor and ensure compliance with Sam.gov requirements on an ongoing basis. • The City’s procurement process for federally funded projects will include an item on the Vendor Questionnaire where vendors can upload their Sam.gov proof at the time of their bid submission. • The City’s Purchasing staff will review all bid submissions against Sam.gov and provide screenshots of when the information was checked. These screenshots will be saved in the bid file. Any vendor that does not show an active Sam.gov status will be rejected as non-responsive. • Any new vendor that is intended for use on a federally funded project will also be checked at the time of vendor entry into the City’s financial software by Finance. A copy of this Sam.gov check will be included with the vendor file. • Current vendors will be checked for Sam.gov compliance on an annual basis. The annual checks will be screenshot and uploaded into the vendor files. Vendor files will be updated accordingly with the date of the Sam.gov check by Finance. The annual compliance check will become part of the end-of-fiscal year closeout process. • Current vendors working on federally funded projects will also be checked for Sam.gov compliance at the time of any change order, amendment, or contract adjustment that is requested.
SUSPENSION AND DEBARMENT U.S. Department of Treasury ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds Contract No. 23.saa.900.46 (2023) Passed through the Florida Department of State U.S. Department of Environmental Protection ALN 66.458 – Clean Water State Revolving Funds Cluster Contract No. WW6409A0/4C-02D38022-0 (2022) Passed through the Florida Department of Environmental Protection U.S. Department of Environmental Protection ALN 66.468 – Drinking Water State Revolving Funds Cluster Contract No. DW640990/FS98452220-0 (2021) Passed through the Florida Department of Environmental Protection Criteria: 2 CFR 180.300 requires the City to ensure vendors and contractors are not disqualified, excluded, or debarred prior to entering into a covered transaction. Further, 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls. The City should have a process to ensure compliance with 2 CFR 180.300. Condition: The City did not document their initial verification (SAM check) that a vendor was not suspended or debarred before entering into a covered transaction for all vendors and contractors participating on Federally-funded projects, and follow-up verifications were not consistently performed. Cause of condition: Procedures for documentation of verification that vendors or contractors were eligible to participate on federally-funded projects checks were not consistently applied to all vendors. Potential effect of condition: Without initial verification of a vendor’s status to participate on federally-funded projects and timely follow-up SAM checks, the City may inadvertently enter into covered transactions with federally suspended or debarred vendors. Perspective: The City properly performed SAM checks for some, but not all, of the vendors and contractors used in covered transactions. None of the vendors tested during our audit were disqualified, excluded, or debarred per verification performed by the auditors. Additionally, the Florida Department of Environmental Protection and the Florida Department of State provide for on-going oversight and review, which mitigates the risk of non-compliance. Questioned costs: None. Recommendation: The City should evaluate its current procedures for ensuring that vendors are eligible to participate in federally-funded projects prior to signing contracts or issuing purchase orders to those vendors. Changes to procedures should be implemented, as necessary, to improve controls over compliance. Additionally, a process for periodic follow-up verification should be performed no less than annually. Management’s Response: The City will set up the following controls to monitor and ensure compliance with Sam.gov requirements on an ongoing basis. • The City’s procurement process for federally funded projects will include an item on the Vendor Questionnaire where vendors can upload their Sam.gov proof at the time of their bid submission. • The City’s Purchasing staff will review all bid submissions against Sam.gov and provide screenshots of when the information was checked. These screenshots will be saved in the bid file. Any vendor that does not show an active Sam.gov status will be rejected as non-responsive. • Any new vendor that is intended for use on a federally funded project will also be checked at the time of vendor entry into the City’s financial software by Finance. A copy of this Sam.gov check will be included with the vendor file. • Current vendors will be checked for Sam.gov compliance on an annual basis. The annual checks will be screenshot and uploaded into the vendor files. Vendor files will be updated accordingly with the date of the Sam.gov check by Finance. The annual compliance check will become part of the end-of-fiscal year closeout process. • Current vendors working on federally funded projects will also be checked for Sam.gov compliance at the time of any change order, amendment, or contract adjustment that is requested.
SUSPENSION AND DEBARMENT U.S. Department of Treasury ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds Contract No. 23.saa.900.46 (2023) Passed through the Florida Department of State U.S. Department of Environmental Protection ALN 66.458 – Clean Water State Revolving Funds Cluster Contract No. WW6409A0/4C-02D38022-0 (2022) Passed through the Florida Department of Environmental Protection U.S. Department of Environmental Protection ALN 66.468 – Drinking Water State Revolving Funds Cluster Contract No. DW640990/FS98452220-0 (2021) Passed through the Florida Department of Environmental Protection Criteria: 2 CFR 180.300 requires the City to ensure vendors and contractors are not disqualified, excluded, or debarred prior to entering into a covered transaction. Further, 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls. The City should have a process to ensure compliance with 2 CFR 180.300. Condition: The City did not document their initial verification (SAM check) that a vendor was not suspended or debarred before entering into a covered transaction for all vendors and contractors participating on Federally-funded projects, and follow-up verifications were not consistently performed. Cause of condition: Procedures for documentation of verification that vendors or contractors were eligible to participate on federally-funded projects checks were not consistently applied to all vendors. Potential effect of condition: Without initial verification of a vendor’s status to participate on federally-funded projects and timely follow-up SAM checks, the City may inadvertently enter into covered transactions with federally suspended or debarred vendors. Perspective: The City properly performed SAM checks for some, but not all, of the vendors and contractors used in covered transactions. None of the vendors tested during our audit were disqualified, excluded, or debarred per verification performed by the auditors. Additionally, the Florida Department of Environmental Protection and the Florida Department of State provide for on-going oversight and review, which mitigates the risk of non-compliance. Questioned costs: None. Recommendation: The City should evaluate its current procedures for ensuring that vendors are eligible to participate in federally-funded projects prior to signing contracts or issuing purchase orders to those vendors. Changes to procedures should be implemented, as necessary, to improve controls over compliance. Additionally, a process for periodic follow-up verification should be performed no less than annually. Management’s Response: The City will set up the following controls to monitor and ensure compliance with Sam.gov requirements on an ongoing basis. • The City’s procurement process for federally funded projects will include an item on the Vendor Questionnaire where vendors can upload their Sam.gov proof at the time of their bid submission. • The City’s Purchasing staff will review all bid submissions against Sam.gov and provide screenshots of when the information was checked. These screenshots will be saved in the bid file. Any vendor that does not show an active Sam.gov status will be rejected as non-responsive. • Any new vendor that is intended for use on a federally funded project will also be checked at the time of vendor entry into the City’s financial software by Finance. A copy of this Sam.gov check will be included with the vendor file. • Current vendors will be checked for Sam.gov compliance on an annual basis. The annual checks will be screenshot and uploaded into the vendor files. Vendor files will be updated accordingly with the date of the Sam.gov check by Finance. The annual compliance check will become part of the end-of-fiscal year closeout process. • Current vendors working on federally funded projects will also be checked for Sam.gov compliance at the time of any change order, amendment, or contract adjustment that is requested.
Item 2023-001 Special Tests and Provisions – Wage Rate Requirements Education Stabilization Fund (ESF) ALN# 84.425U U.S. Department of Education Passed through the State Department of Education, Pass Through Grantor Number 199 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 provided 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 that accurate and complete certified payrolls were 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 payments to contractors did not have supporting documentation of certified payrolls. However, our audit disclosed no instances of unallowable costs. Questioned Costs – $149,982 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 from each week in which construction work is performed.
2023-004 United States Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance and Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Section 4 of the loan resolution security agreements dated March 28, 2012 states the Hospital must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the cash sweep general fund account which was not established as a separate bookkeeping account or as a separate bank account. The Hospital had excess cash available to cover the required reserve amount. Cause: The Hospital was unaware the funds were required to be maintained in a separate bookkeeping account or as a separate bank account. Effect: The Hospital could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2022-004 Recommendation: We recommend the Hospital transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal governments or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2023-004 United States Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance and Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Section 4 of the loan resolution security agreements dated March 28, 2012 states the Hospital must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the cash sweep general fund account which was not established as a separate bookkeeping account or as a separate bank account. The Hospital had excess cash available to cover the required reserve amount. Cause: The Hospital was unaware the funds were required to be maintained in a separate bookkeeping account or as a separate bank account. Effect: The Hospital could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2022-004 Recommendation: We recommend the Hospital transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal governments or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2023-004 United States Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance and Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Section 4 of the loan resolution security agreements dated March 28, 2012 states the Hospital must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the cash sweep general fund account which was not established as a separate bookkeeping account or as a separate bank account. The Hospital had excess cash available to cover the required reserve amount. Cause: The Hospital was unaware the funds were required to be maintained in a separate bookkeeping account or as a separate bank account. Effect: The Hospital could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2022-004 Recommendation: We recommend the Hospital transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal governments or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2023-005 United States Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control 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 Hospital’s requests for reimbursement under the Community Facilities Grant Agreement were not reviewed and approved by a separate individual. Cause: The Hospital had multiple individuals involved in the process for identifying and compiling the requests for reimbursement; however, the Hospital did not have a formal documented review and approval process in place. Effect: Without a documented review and approval, there is a possibility ineligible expenditures may be claimed under the program. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 4 ($134,681) out of a population of 9 transactions ($221,625) relating to equipment items were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital implement a control process which includes a formally documented review and approval over the requests for reimbursement submitted under the Community Facilities Grant Agreement. Views of Responsible Officials: Management agrees with the finding.