Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: Medicaid Cluster 2205TX5ADM, 2205TX5MAP, 2205TXIMPL; 2305TX5ADM, 2305TX5MAP, 2305TXIMPL October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. Per 2 CFR 200.334, 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 Federal awarding agency or pass-through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. In order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Allowable Costs/Cost Principles – Cost Allocations, Matching, Level of Effort, Earmarking (CHIP Only) Federal Agency: U.S. Department of Health and Human Services U.S. Department of Agriculture U.S. Department of Education Social Security Administration Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Temporary Assistance for Needy Families (TANF) Social Services Block Grant (SSBG) Children’s Health Insurance Program (CHIP) Block Grants for Community Mental Health Services (MHBG) Block Grants for Prevention and Treatment of Substance Abuse (SABG) Medicaid Cluster Aging Cluster (nonmajor) Disability Insurance/SSI Cluster (nonmajor) Money Follows the Person Rebalancing Demonstration (nonmajor) CCDF Cluster (nonmajor) SNAP Cluster (nonmajor) Special Education-Grants for Infants and Families (nonmajor) ALN: 10.557 93.558 93.667 93.767 93.958 93.959 93.775, 93.777, 93.778 93.044, 93.045, 93.053 (nonmajor) 96.001, 96.006 (nonmajor) 93.791 (nonmajor) 93.575, 93.596, 93.489 (nonmajor) 10.551, 10.561 (nonmajor) 84.181 (nonmajor) Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: WIC 6TX700527, 6TX700507 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023, October 1, 2022 – September 30, 2024 TANF 2301TXTANF, 2301TXTAN3, 2201TXTANF, and 2201TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2021 – September 30, 2022 SSBG 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023 CHIP 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 MHBG 1B09SM087345, 6B09SM087345-01M001, 6B09SM087345-01M002, 6B09SM087345-01M003, 1B09SM087322-01,1B09SM085994-01, 6B09SM085994-01M001, 6B09SM085994-01M002, 6B09SM085994-01M003, 1B09SM083999 -01, 6B09SM083999-01M001, 1B09SM083830-01, 6B09SM083830- 01M001 October 1, 2022 – September 30, 2024, October 17, 2022 – October 16, 2024, October 1, 2021 – September 30, 2023, March 15, 2021 – March 14, 2024, March 15, 2021 – March 14, 2023, and October 1, 2020 – September 30, 2022 SABG 1B08TI085835-01,6B08TI085835-01M001, 6B08TI084673-01M001, 6B08TI084673-01M002, 1B08TI084673-01, 6B08TI083478-01 6B08TI083478- 01M002, 6B08TI083478-01M003, 6B08TI083478-01M004 October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 Medicaid Cluster 2205TX5ADM, 2205TX5MAP, 2205TXIMPL; 2305TX5ADM, 2305TX5MAP, 2305TXIMPL October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 45 CFR Section 95.507, the State shall submit a cost allocation plan for the State agency as required below to the Director, Division of Cost Allocation (DCA), in the appropriate HHS Regional Office. The plan shall describe the procedures used to identify, measure, and allocate all costs to each of the programs operated by the State agency. The cost allocation plan shall contain the procedures used to identify, measure, and allocate all costs to each benefitting program and activity. Per 45 CFR Section 95.509, the State shall promptly amend the cost allocation plan and submit the amended plan to the Director, DCA, if any of the following events occur, including if other changes occur which make the allocation basis or procedures in the approval cost allocation plan invalid. Condition: HHSC’s approved Public Assistance Cost Allocation Plan (PACAP) expenditures and revenues are initially allocated based on an estimate of Project ID percentages. After actual base statistical data is available, expenditures are reallocated and adjustments between estimated and actual costs are made. The adjustments will result in costs claimed for each period being allocated based on actual base statistics for the same period. Data is updated either by voucher, monthly, quarterly, semi-annually, or annually, depending on the Project ID. HHSC experienced significant delays in updating factors. By the end of the fiscal year, cost allocations had been updated only through August 2022. Although there is no documented policy over when the FMAP should be updated, HHSC will allocate costs at the FMAP that is in effect at the time of the transaction and will reallocate the transactions using the FMAP in effect at the time of the reallocation. This procedure was not followed in 2023 when the costs for four of 40 sample allocations tested in the CHIP program were allocated using a rate other than the current one in effect resulting in noncompliance with matching requirements. Questioned costs: Unknown Context: See “Condition.” Cause: HHSC’s General Ledger Unit is responsible for cost allocations. At the start of fiscal year 2023, the Unit suffered a loss of more than half of its staff due to turnover. Additionally, the current Federal Medical Assistance Percentage (FMAP) rates were in a stepdown process whereby the rate changed quarterly as opposed to yearly which intensified the workload. In addition, since transformation, the number of Public Assistance Cost Allocation Plan (PACAP) methodologies (Project IDs) has increased by 243%. These methodologies have become increasingly more complex, now including over 80 dependent factors of which some comprise more than 100 fund sources each. This huge increase in both volume and complexity has greatly increased calculation labor and risk of error. Effect: Failure to update factor allocations timely can result in questioned costs. Repeat finding: 2022-010, 2021-004, 2020-016, 2019-006, 2018-005, 2017-009, and 2016-024 Recommendation: HHSC should allocate adequate resources to ensure factor allocations are performed and reallocations are updated timely in order to present accurate information. Views of responsible officials: HHSC concurs with the finding.
Allowable Costs/Cost Principles – Cost Allocations, Matching, Level of Effort, Earmarking (CHIP Only) Federal Agency: U.S. Department of Health and Human Services U.S. Department of Agriculture U.S. Department of Education Social Security Administration Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Temporary Assistance for Needy Families (TANF) Social Services Block Grant (SSBG) Children’s Health Insurance Program (CHIP) Block Grants for Community Mental Health Services (MHBG) Block Grants for Prevention and Treatment of Substance Abuse (SABG) Medicaid Cluster Aging Cluster (nonmajor) Disability Insurance/SSI Cluster (nonmajor) Money Follows the Person Rebalancing Demonstration (nonmajor) CCDF Cluster (nonmajor) SNAP Cluster (nonmajor) Special Education-Grants for Infants and Families (nonmajor) ALN: 10.557 93.558 93.667 93.767 93.958 93.959 93.775, 93.777, 93.778 93.044, 93.045, 93.053 (nonmajor) 96.001, 96.006 (nonmajor) 93.791 (nonmajor) 93.575, 93.596, 93.489 (nonmajor) 10.551, 10.561 (nonmajor) 84.181 (nonmajor) Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: WIC 6TX700527, 6TX700507 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023, October 1, 2022 – September 30, 2024 TANF 2301TXTANF, 2301TXTAN3, 2201TXTANF, and 2201TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2021 – September 30, 2022 SSBG 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023 CHIP 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 MHBG 1B09SM087345, 6B09SM087345-01M001, 6B09SM087345-01M002, 6B09SM087345-01M003, 1B09SM087322-01,1B09SM085994-01, 6B09SM085994-01M001, 6B09SM085994-01M002, 6B09SM085994-01M003, 1B09SM083999 -01, 6B09SM083999-01M001, 1B09SM083830-01, 6B09SM083830- 01M001 October 1, 2022 – September 30, 2024, October 17, 2022 – October 16, 2024, October 1, 2021 – September 30, 2023, March 15, 2021 – March 14, 2024, March 15, 2021 – March 14, 2023, and October 1, 2020 – September 30, 2022 SABG 1B08TI085835-01,6B08TI085835-01M001, 6B08TI084673-01M001, 6B08TI084673-01M002, 1B08TI084673-01, 6B08TI083478-01 6B08TI083478- 01M002, 6B08TI083478-01M003, 6B08TI083478-01M004 October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 Medicaid Cluster 2205TX5ADM, 2205TX5MAP, 2205TXIMPL; 2305TX5ADM, 2305TX5MAP, 2305TXIMPL October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 45 CFR Section 95.507, the State shall submit a cost allocation plan for the State agency as required below to the Director, Division of Cost Allocation (DCA), in the appropriate HHS Regional Office. The plan shall describe the procedures used to identify, measure, and allocate all costs to each of the programs operated by the State agency. The cost allocation plan shall contain the procedures used to identify, measure, and allocate all costs to each benefitting program and activity. Per 45 CFR Section 95.509, the State shall promptly amend the cost allocation plan and submit the amended plan to the Director, DCA, if any of the following events occur, including if other changes occur which make the allocation basis or procedures in the approval cost allocation plan invalid. Condition: HHSC’s approved Public Assistance Cost Allocation Plan (PACAP) expenditures and revenues are initially allocated based on an estimate of Project ID percentages. After actual base statistical data is available, expenditures are reallocated and adjustments between estimated and actual costs are made. The adjustments will result in costs claimed for each period being allocated based on actual base statistics for the same period. Data is updated either by voucher, monthly, quarterly, semi-annually, or annually, depending on the Project ID. HHSC experienced significant delays in updating factors. By the end of the fiscal year, cost allocations had been updated only through August 2022. Although there is no documented policy over when the FMAP should be updated, HHSC will allocate costs at the FMAP that is in effect at the time of the transaction and will reallocate the transactions using the FMAP in effect at the time of the reallocation. This procedure was not followed in 2023 when the costs for four of 40 sample allocations tested in the CHIP program were allocated using a rate other than the current one in effect resulting in noncompliance with matching requirements. Questioned costs: Unknown Context: See “Condition.” Cause: HHSC’s General Ledger Unit is responsible for cost allocations. At the start of fiscal year 2023, the Unit suffered a loss of more than half of its staff due to turnover. Additionally, the current Federal Medical Assistance Percentage (FMAP) rates were in a stepdown process whereby the rate changed quarterly as opposed to yearly which intensified the workload. In addition, since transformation, the number of Public Assistance Cost Allocation Plan (PACAP) methodologies (Project IDs) has increased by 243%. These methodologies have become increasingly more complex, now including over 80 dependent factors of which some comprise more than 100 fund sources each. This huge increase in both volume and complexity has greatly increased calculation labor and risk of error. Effect: Failure to update factor allocations timely can result in questioned costs. Repeat finding: 2022-010, 2021-004, 2020-016, 2019-006, 2018-005, 2017-009, and 2016-024 Recommendation: HHSC should allocate adequate resources to ensure factor allocations are performed and reallocations are updated timely in order to present accurate information. Views of responsible officials: HHSC concurs with the finding.
Allowable Costs/Cost Principles – Cost Allocations, Matching, Level of Effort, Earmarking (CHIP Only) Federal Agency: U.S. Department of Health and Human Services U.S. Department of Agriculture U.S. Department of Education Social Security Administration Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Temporary Assistance for Needy Families (TANF) Social Services Block Grant (SSBG) Children’s Health Insurance Program (CHIP) Block Grants for Community Mental Health Services (MHBG) Block Grants for Prevention and Treatment of Substance Abuse (SABG) Medicaid Cluster Aging Cluster (nonmajor) Disability Insurance/SSI Cluster (nonmajor) Money Follows the Person Rebalancing Demonstration (nonmajor) CCDF Cluster (nonmajor) SNAP Cluster (nonmajor) Special Education-Grants for Infants and Families (nonmajor) ALN: 10.557 93.558 93.667 93.767 93.958 93.959 93.775, 93.777, 93.778 93.044, 93.045, 93.053 (nonmajor) 96.001, 96.006 (nonmajor) 93.791 (nonmajor) 93.575, 93.596, 93.489 (nonmajor) 10.551, 10.561 (nonmajor) 84.181 (nonmajor) Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: WIC 6TX700527, 6TX700507 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023, October 1, 2022 – September 30, 2024 TANF 2301TXTANF, 2301TXTAN3, 2201TXTANF, and 2201TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2021 – September 30, 2022 SSBG 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023 CHIP 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 MHBG 1B09SM087345, 6B09SM087345-01M001, 6B09SM087345-01M002, 6B09SM087345-01M003, 1B09SM087322-01,1B09SM085994-01, 6B09SM085994-01M001, 6B09SM085994-01M002, 6B09SM085994-01M003, 1B09SM083999 -01, 6B09SM083999-01M001, 1B09SM083830-01, 6B09SM083830- 01M001 October 1, 2022 – September 30, 2024, October 17, 2022 – October 16, 2024, October 1, 2021 – September 30, 2023, March 15, 2021 – March 14, 2024, March 15, 2021 – March 14, 2023, and October 1, 2020 – September 30, 2022 SABG 1B08TI085835-01,6B08TI085835-01M001, 6B08TI084673-01M001, 6B08TI084673-01M002, 1B08TI084673-01, 6B08TI083478-01 6B08TI083478- 01M002, 6B08TI083478-01M003, 6B08TI083478-01M004 October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 Medicaid Cluster 2205TX5ADM, 2205TX5MAP, 2205TXIMPL; 2305TX5ADM, 2305TX5MAP, 2305TXIMPL October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 45 CFR Section 95.507, the State shall submit a cost allocation plan for the State agency as required below to the Director, Division of Cost Allocation (DCA), in the appropriate HHS Regional Office. The plan shall describe the procedures used to identify, measure, and allocate all costs to each of the programs operated by the State agency. The cost allocation plan shall contain the procedures used to identify, measure, and allocate all costs to each benefitting program and activity. Per 45 CFR Section 95.509, the State shall promptly amend the cost allocation plan and submit the amended plan to the Director, DCA, if any of the following events occur, including if other changes occur which make the allocation basis or procedures in the approval cost allocation plan invalid. Condition: HHSC’s approved Public Assistance Cost Allocation Plan (PACAP) expenditures and revenues are initially allocated based on an estimate of Project ID percentages. After actual base statistical data is available, expenditures are reallocated and adjustments between estimated and actual costs are made. The adjustments will result in costs claimed for each period being allocated based on actual base statistics for the same period. Data is updated either by voucher, monthly, quarterly, semi-annually, or annually, depending on the Project ID. HHSC experienced significant delays in updating factors. By the end of the fiscal year, cost allocations had been updated only through August 2022. Although there is no documented policy over when the FMAP should be updated, HHSC will allocate costs at the FMAP that is in effect at the time of the transaction and will reallocate the transactions using the FMAP in effect at the time of the reallocation. This procedure was not followed in 2023 when the costs for four of 40 sample allocations tested in the CHIP program were allocated using a rate other than the current one in effect resulting in noncompliance with matching requirements. Questioned costs: Unknown Context: See “Condition.” Cause: HHSC’s General Ledger Unit is responsible for cost allocations. At the start of fiscal year 2023, the Unit suffered a loss of more than half of its staff due to turnover. Additionally, the current Federal Medical Assistance Percentage (FMAP) rates were in a stepdown process whereby the rate changed quarterly as opposed to yearly which intensified the workload. In addition, since transformation, the number of Public Assistance Cost Allocation Plan (PACAP) methodologies (Project IDs) has increased by 243%. These methodologies have become increasingly more complex, now including over 80 dependent factors of which some comprise more than 100 fund sources each. This huge increase in both volume and complexity has greatly increased calculation labor and risk of error. Effect: Failure to update factor allocations timely can result in questioned costs. Repeat finding: 2022-010, 2021-004, 2020-016, 2019-006, 2018-005, 2017-009, and 2016-024 Recommendation: HHSC should allocate adequate resources to ensure factor allocations are performed and reallocations are updated timely in order to present accurate information. Views of responsible officials: HHSC concurs with the finding.
Finding 2023 001: Inaccurate Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN # and Program Expenditures: 84.063 ($9,402,496) 84.268 ($198,862,889) Federal Award Numbers: P063P211371, P063P221371 P268K221371, P268K231371, P268K241371 Federal Award Year: September 1, 2022 to August 31, 2023 Questioned Costs: None Compliance Requirement: Enrollment Reporting Criteria According to 34 CFR Sections 690.83(b)(2) and 685.309, under the Pell grant and Federal Direct loan (FDL) programs, institutions must complete and return the Enrollment Reporting Roster File via the National Student Loan Data System (NSLDS) within 15 days of receipt. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster File. Unless an institution expects to submit its next updated enrollment report to the USDE within the next 60 days, an institution must notify NSLDS within 30 days after the date that the institution discovers that (1) a Direct loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended; or (2) a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include establishing procedures to ensure student campus and program level enrollment status changes are accurately reported to the NSLDS. Condition Found The University did not accurately report student enrollment status change at both the campus level and program level to the NSLDS. USDE uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. During our testing of 25 borrowers under the FDL program and/or Pell Grant recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the status change for one graduated student was reported incorrectly to the NSLDS as a Withdrawal (W) status rather than Graduated (G) status. Upon further review, management evaluated and identified an additional 38 graduates who had the same reporting errors. We further noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment and student data submitted to NSLDS was accurate. The University disbursed FDL loans to 1,411 students during the required reporting period from March 1, 2023 through the year ended August 31, 2023 for which enrollment reporting requirements applied. Cause In discussing these conditions with University officials, they stated University records maintained students’ statuses within a certain business program as active after graduating from the program inaccurately in anticipation of potential future enrollment in classes. Possible Asserted Effect Inaccurate submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules. Repeat Finding This is not a repeat finding. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures to ensure accurate reporting of student information and enrollment status information to the NSLDS. Views of University Officials The University agrees with this finding. The University will revisit management review controls and procedures to ensure a level of precision for submitting accurate graduate student data to the NSLDS.
Finding 2023 001: Inaccurate Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN # and Program Expenditures: 84.063 ($9,402,496) 84.268 ($198,862,889) Federal Award Numbers: P063P211371, P063P221371 P268K221371, P268K231371, P268K241371 Federal Award Year: September 1, 2022 to August 31, 2023 Questioned Costs: None Compliance Requirement: Enrollment Reporting Criteria According to 34 CFR Sections 690.83(b)(2) and 685.309, under the Pell grant and Federal Direct loan (FDL) programs, institutions must complete and return the Enrollment Reporting Roster File via the National Student Loan Data System (NSLDS) within 15 days of receipt. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster File. Unless an institution expects to submit its next updated enrollment report to the USDE within the next 60 days, an institution must notify NSLDS within 30 days after the date that the institution discovers that (1) a Direct loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended; or (2) a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include establishing procedures to ensure student campus and program level enrollment status changes are accurately reported to the NSLDS. Condition Found The University did not accurately report student enrollment status change at both the campus level and program level to the NSLDS. USDE uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. During our testing of 25 borrowers under the FDL program and/or Pell Grant recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the status change for one graduated student was reported incorrectly to the NSLDS as a Withdrawal (W) status rather than Graduated (G) status. Upon further review, management evaluated and identified an additional 38 graduates who had the same reporting errors. We further noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment and student data submitted to NSLDS was accurate. The University disbursed FDL loans to 1,411 students during the required reporting period from March 1, 2023 through the year ended August 31, 2023 for which enrollment reporting requirements applied. Cause In discussing these conditions with University officials, they stated University records maintained students’ statuses within a certain business program as active after graduating from the program inaccurately in anticipation of potential future enrollment in classes. Possible Asserted Effect Inaccurate submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules. Repeat Finding This is not a repeat finding. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures to ensure accurate reporting of student information and enrollment status information to the NSLDS. Views of University Officials The University agrees with this finding. The University will revisit management review controls and procedures to ensure a level of precision for submitting accurate graduate student data to the NSLDS.
Finding 2023 001: Inaccurate Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN # and Program Expenditures: 84.063 ($9,402,496) 84.268 ($198,862,889) Federal Award Numbers: P063P211371, P063P221371 P268K221371, P268K231371, P268K241371 Federal Award Year: September 1, 2022 to August 31, 2023 Questioned Costs: None Compliance Requirement: Enrollment Reporting Criteria According to 34 CFR Sections 690.83(b)(2) and 685.309, under the Pell grant and Federal Direct loan (FDL) programs, institutions must complete and return the Enrollment Reporting Roster File via the National Student Loan Data System (NSLDS) within 15 days of receipt. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster File. Unless an institution expects to submit its next updated enrollment report to the USDE within the next 60 days, an institution must notify NSLDS within 30 days after the date that the institution discovers that (1) a Direct loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended; or (2) a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include establishing procedures to ensure student campus and program level enrollment status changes are accurately reported to the NSLDS. Condition Found The University did not accurately report student enrollment status change at both the campus level and program level to the NSLDS. USDE uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. During our testing of 25 borrowers under the FDL program and/or Pell Grant recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the status change for one graduated student was reported incorrectly to the NSLDS as a Withdrawal (W) status rather than Graduated (G) status. Upon further review, management evaluated and identified an additional 38 graduates who had the same reporting errors. We further noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment and student data submitted to NSLDS was accurate. The University disbursed FDL loans to 1,411 students during the required reporting period from March 1, 2023 through the year ended August 31, 2023 for which enrollment reporting requirements applied. Cause In discussing these conditions with University officials, they stated University records maintained students’ statuses within a certain business program as active after graduating from the program inaccurately in anticipation of potential future enrollment in classes. Possible Asserted Effect Inaccurate submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules. Repeat Finding This is not a repeat finding. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures to ensure accurate reporting of student information and enrollment status information to the NSLDS. Views of University Officials The University agrees with this finding. The University will revisit management review controls and procedures to ensure a level of precision for submitting accurate graduate student data to the NSLDS.
Finding 2023 001: Inaccurate Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN # and Program Expenditures: 84.063 ($9,402,496) 84.268 ($198,862,889) Federal Award Numbers: P063P211371, P063P221371 P268K221371, P268K231371, P268K241371 Federal Award Year: September 1, 2022 to August 31, 2023 Questioned Costs: None Compliance Requirement: Enrollment Reporting Criteria According to 34 CFR Sections 690.83(b)(2) and 685.309, under the Pell grant and Federal Direct loan (FDL) programs, institutions must complete and return the Enrollment Reporting Roster File via the National Student Loan Data System (NSLDS) within 15 days of receipt. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster File. Unless an institution expects to submit its next updated enrollment report to the USDE within the next 60 days, an institution must notify NSLDS within 30 days after the date that the institution discovers that (1) a Direct loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended; or (2) a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include establishing procedures to ensure student campus and program level enrollment status changes are accurately reported to the NSLDS. Condition Found The University did not accurately report student enrollment status change at both the campus level and program level to the NSLDS. USDE uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. During our testing of 25 borrowers under the FDL program and/or Pell Grant recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the status change for one graduated student was reported incorrectly to the NSLDS as a Withdrawal (W) status rather than Graduated (G) status. Upon further review, management evaluated and identified an additional 38 graduates who had the same reporting errors. We further noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment and student data submitted to NSLDS was accurate. The University disbursed FDL loans to 1,411 students during the required reporting period from March 1, 2023 through the year ended August 31, 2023 for which enrollment reporting requirements applied. Cause In discussing these conditions with University officials, they stated University records maintained students’ statuses within a certain business program as active after graduating from the program inaccurately in anticipation of potential future enrollment in classes. Possible Asserted Effect Inaccurate submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules. Repeat Finding This is not a repeat finding. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures to ensure accurate reporting of student information and enrollment status information to the NSLDS. Views of University Officials The University agrees with this finding. The University will revisit management review controls and procedures to ensure a level of precision for submitting accurate graduate student data to the NSLDS.
Finding 2023 001: Inaccurate Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN # and Program Expenditures: 84.063 ($9,402,496) 84.268 ($198,862,889) Federal Award Numbers: P063P211371, P063P221371 P268K221371, P268K231371, P268K241371 Federal Award Year: September 1, 2022 to August 31, 2023 Questioned Costs: None Compliance Requirement: Enrollment Reporting Criteria According to 34 CFR Sections 690.83(b)(2) and 685.309, under the Pell grant and Federal Direct loan (FDL) programs, institutions must complete and return the Enrollment Reporting Roster File via the National Student Loan Data System (NSLDS) within 15 days of receipt. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster File. Unless an institution expects to submit its next updated enrollment report to the USDE within the next 60 days, an institution must notify NSLDS within 30 days after the date that the institution discovers that (1) a Direct loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended; or (2) a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include establishing procedures to ensure student campus and program level enrollment status changes are accurately reported to the NSLDS. Condition Found The University did not accurately report student enrollment status change at both the campus level and program level to the NSLDS. USDE uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. During our testing of 25 borrowers under the FDL program and/or Pell Grant recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the status change for one graduated student was reported incorrectly to the NSLDS as a Withdrawal (W) status rather than Graduated (G) status. Upon further review, management evaluated and identified an additional 38 graduates who had the same reporting errors. We further noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment and student data submitted to NSLDS was accurate. The University disbursed FDL loans to 1,411 students during the required reporting period from March 1, 2023 through the year ended August 31, 2023 for which enrollment reporting requirements applied. Cause In discussing these conditions with University officials, they stated University records maintained students’ statuses within a certain business program as active after graduating from the program inaccurately in anticipation of potential future enrollment in classes. Possible Asserted Effect Inaccurate submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules. Repeat Finding This is not a repeat finding. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures to ensure accurate reporting of student information and enrollment status information to the NSLDS. Views of University Officials The University agrees with this finding. The University will revisit management review controls and procedures to ensure a level of precision for submitting accurate graduate student data to the NSLDS.
Reference Number: 2023‐003 Annual Report Card, High School Graduation rate compliance ALN 84.010 Title I Grants for Local Education Agencies Pass through identifying number: 23610101245902 Award Year: 2022‐2023 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non‐federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a). ESEA section 8101(25)(B), states: (B) COHORT REMOVAL—To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the District must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. Condition Found: During our review of students that were removed from the adjusted cohort, one student removal was not supported by appropriate written documentation. Cause: The documentation regarding removing the student from the adjusted cohort was not maintained. Turnover in the District PEIMS director position caused difficulties in the District locating the appropriate written documentation. Effect: The District could fail to appropriately support removing students from the adjusted cohort. Questioned Cost: $0 Recommendation: We recommend the District to maintain written documentation each time a student is removed from the adjusted cohort and place within the student file for easy access. Views of Responsible Officials: Management agrees with the findings.
2023 – 004 Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund - Higher Education Emergency Relief Fund Assistance Listing Numbers: 84.425E and 84.425F Federal Award Identification Number and Year: P425F201294; all grants were awarded within the 2019-20, 2020-21, 2021-22. 2022-23 award years. Award Period: September 1, 2022, through August 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. There are three components to reporting for Higher Education Emergency Relief Fund (HEERF): 1) public reporting on the (a)(1) Student Aid Portion; 2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. Condition: During our testing of compliance, we noted that management had not provided proper documentation of review and had not maintained all reports on the College website. Questioned Costs: N/A Context: None of the reports tested had documented the review for the College’s reports. Additionally, one of the four quarterly reports was not displayed on the College’s website. Effect: The College is not complying with awarding requirements, which could affect the amount of Federal funding received. Repeat Finding: Yes – 2022-005 Recommendation: The College should review their reporting internal controls and documentation of review around grant reporting to ensure all reporting requirements are being met and controls are documented. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.
2023 – 004 Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund - Higher Education Emergency Relief Fund Assistance Listing Numbers: 84.425E and 84.425F Federal Award Identification Number and Year: P425F201294; all grants were awarded within the 2019-20, 2020-21, 2021-22. 2022-23 award years. Award Period: September 1, 2022, through August 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. There are three components to reporting for Higher Education Emergency Relief Fund (HEERF): 1) public reporting on the (a)(1) Student Aid Portion; 2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. Condition: During our testing of compliance, we noted that management had not provided proper documentation of review and had not maintained all reports on the College website. Questioned Costs: N/A Context: None of the reports tested had documented the review for the College’s reports. Additionally, one of the four quarterly reports was not displayed on the College’s website. Effect: The College is not complying with awarding requirements, which could affect the amount of Federal funding received. Repeat Finding: Yes – 2022-005 Recommendation: The College should review their reporting internal controls and documentation of review around grant reporting to ensure all reporting requirements are being met and controls are documented. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster Assistance Listing Numbers: 84.007 – Federal Supplemental Education Opportunity Grants 84.033 – Federal Work Study Program 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans Federal Award Identification Number and Year: N/A Award Period: September 1, 2022 to August 31, 2023 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). In addition, per Uniform Guidance 2 CFR 200.303, federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned Costs: None Context: During our review of the GLBA reports for Alamo Community College District, we noted one of the eight required GLBA safeguards was missing from the written information security plan (District’s Enterprise Data Governance Standard), and there was no review of the plan. Cause: The Enterprise Data Governance Standard did not include one of the required GLBA safeguards. Effect: The District is not in full compliance with GLBA. Repeat Finding: No Recommendation: We recommend that the District review the updated GLBA requirements and ensure their Enterprise Data Governance Standard includes all required elements. Views of Responsible Officials: There is no disagreement with the audit finding. The District has a plan to correct the finding.
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster Assistance Listing Numbers: 84.007 – Federal Supplemental Education Opportunity Grants 84.033 – Federal Work Study Program 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans Federal Award Identification Number and Year: N/A Award Period: September 1, 2022 to August 31, 2023 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). In addition, per Uniform Guidance 2 CFR 200.303, federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned Costs: None Context: During our review of the GLBA reports for Alamo Community College District, we noted one of the eight required GLBA safeguards was missing from the written information security plan (District’s Enterprise Data Governance Standard), and there was no review of the plan. Cause: The Enterprise Data Governance Standard did not include one of the required GLBA safeguards. Effect: The District is not in full compliance with GLBA. Repeat Finding: No Recommendation: We recommend that the District review the updated GLBA requirements and ensure their Enterprise Data Governance Standard includes all required elements. Views of Responsible Officials: There is no disagreement with the audit finding. The District has a plan to correct the finding.
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster Assistance Listing Numbers: 84.007 – Federal Supplemental Education Opportunity Grants 84.033 – Federal Work Study Program 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans Federal Award Identification Number and Year: N/A Award Period: September 1, 2022 to August 31, 2023 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). In addition, per Uniform Guidance 2 CFR 200.303, federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned Costs: None Context: During our review of the GLBA reports for Alamo Community College District, we noted one of the eight required GLBA safeguards was missing from the written information security plan (District’s Enterprise Data Governance Standard), and there was no review of the plan. Cause: The Enterprise Data Governance Standard did not include one of the required GLBA safeguards. Effect: The District is not in full compliance with GLBA. Repeat Finding: No Recommendation: We recommend that the District review the updated GLBA requirements and ensure their Enterprise Data Governance Standard includes all required elements. Views of Responsible Officials: There is no disagreement with the audit finding. The District has a plan to correct the finding.
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster Assistance Listing Numbers: 84.007 – Federal Supplemental Education Opportunity Grants 84.033 – Federal Work Study Program 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans Federal Award Identification Number and Year: N/A Award Period: September 1, 2022 to August 31, 2023 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). In addition, per Uniform Guidance 2 CFR 200.303, federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned Costs: None Context: During our review of the GLBA reports for Alamo Community College District, we noted one of the eight required GLBA safeguards was missing from the written information security plan (District’s Enterprise Data Governance Standard), and there was no review of the plan. Cause: The Enterprise Data Governance Standard did not include one of the required GLBA safeguards. Effect: The District is not in full compliance with GLBA. Repeat Finding: No Recommendation: We recommend that the District review the updated GLBA requirements and ensure their Enterprise Data Governance Standard includes all required elements. Views of Responsible Officials: There is no disagreement with the audit finding. The District has a plan to correct the finding.
Federal Agency: Department of Education Federal Program: Education Stabilization Fund Assistance Listing Number: 84.425E Federal Award Identification Number and Year: N/A Award Period: September 1, 2022 to August 31, 2023 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: In accordance with 2 CFR Section 200.407, institutions distributing HEERF funding are required to ensure that students meet the eligibility requirements of the program while following established policies and procedures. In addition, per Uniform Guidance 2 CFR 200.303, entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. Condition: During our testing of student expenditures of HEERF funding, we identified certain internal control policies of the District were not followed. Questioned Costs: None Context: During our testing of the HEERF student expenditures, we identified certain instances where internal control policies of the District were not followed at Northwest Vista College. Cause: The District in certain instances did not follow the internal control policies implemented around the awarding of HEERF student funds. Effect: There were certain instances where HEERF funds were disbursed that did not follow the District’s internal control policies. Repeat Finding: No Recommendation: We recommend that the District review their internal processes and ensure all internal control policies are followed. Views of Responsible Officials: There is no disagreement with the audit finding. The District has a plan to correct the finding.
Assistance Listing, Federal Agency, and Program Name - 93.918, U.S. Department of Health and Human Services, Health Resources and Services Administration (HRSA), Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Federal Award Identification Number and Year - H76HA00107, 2022 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Framework, issued by the Committee of Sponoring Organizations of the Treadwy Commission (COSO). Condition - Management did not have controls in place to ensure required reporting submissions to HRSA were reviewed for accuracy, completeness, and compliance with the terms and conditions prescribed by the funding agency by an individual other than the indvidual preparing the report. Questioned Costs - None Identification of How Questioned Costs Were Computed -Not applicable, as no questioned costs were identified. Context - During testing of the Institute's annual submission of its Federal Financial Report (FFR or SF-425), we noted the individual compiling the information also prepared the report without a secondary level of review. Cause and Effect - Though some elements of the report automatically populate from HRSA's Payment Management System, other key pieces of information are manually added to the report from underlying ledgers or other reports. Without a level of review in advance of the submission, information in the report could be materially mistated or out of compliance with HRSA's reporting requirements. Recommendation - We recommend management implement a level of review in advance of the report submission to ensure individuals who prepare reports are different from those who review and file the reports and to ensure reports are prepared in compliance with funding agency requirements. Views of Responsible Officials and Corrective Action Plan - Management concurs with the recommendation and will review the appropriate guidance and implement enhanced procedures for including secondary levels of review.
Assistance Listing, Federal Agency, and Program Name - 93.918, U.S. Department of Health and Human Services, Health Resources and Services Administration (HRSA), Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Federal Award Identification Number and Year - H76HA00107, 2022 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Framework, issued by the Committee of Sponoring Organizations of the Treadwy Commission (COSO). Condition - Management did not have controls in place to ensure required reporting submissions to HRSA were reviewed for accuracy, completeness, and compliance with the terms and conditions prescribed by the funding agency by an individual other than the indvidual preparing the report. Questioned Costs - None Identification of How Questioned Costs Were Computed -Not applicable, as no questioned costs were identified. Context - During testing of the Institute's annual submission of its Federal Financial Report (FFR or SF-425), we noted the individual compiling the information also prepared the report without a secondary level of review. Cause and Effect - Though some elements of the report automatically populate from HRSA's Payment Management System, other key pieces of information are manually added to the report from underlying ledgers or other reports. Without a level of review in advance of the submission, information in the report could be materially mistated or out of compliance with HRSA's reporting requirements. Recommendation - We recommend management implement a level of review in advance of the report submission to ensure individuals who prepare reports are different from those who review and file the reports and to ensure reports are prepared in compliance with funding agency requirements. Views of Responsible Officials and Corrective Action Plan - Management concurs with the recommendation and will review the appropriate guidance and implement enhanced procedures for including secondary levels of review.
Assistance Listing, Federal Agency, and Program Name - 93.918, U.S. Department of Health and Human Services, Health Resources and Services Administration (HRSA), Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Federal Award Identification Number and Year - H76HA00107, 2022 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Framework, issued by the Committee of Sponoring Organizations of the Treadwy Commission (COSO). Condition - Management did not have controls in place to ensure required reporting submissions to HRSA were reviewed for accuracy, completeness, and compliance with the terms and conditions prescribed by the funding agency by an individual other than the indvidual preparing the report. Questioned Costs - None Identification of How Questioned Costs Were Computed -Not applicable, as no questioned costs were identified. Context - During testing of the Institute's annual submission of its Federal Financial Report (FFR or SF-425), we noted the individual compiling the information also prepared the report without a secondary level of review. Cause and Effect - Though some elements of the report automatically populate from HRSA's Payment Management System, other key pieces of information are manually added to the report from underlying ledgers or other reports. Without a level of review in advance of the submission, information in the report could be materially mistated or out of compliance with HRSA's reporting requirements. Recommendation - We recommend management implement a level of review in advance of the report submission to ensure individuals who prepare reports are different from those who review and file the reports and to ensure reports are prepared in compliance with funding agency requirements. Views of Responsible Officials and Corrective Action Plan - Management concurs with the recommendation and will review the appropriate guidance and implement enhanced procedures for including secondary levels of review.
Finding 2023-001: Procurement United States Department of Agriculture – Child Nutrition Cluster United States Department of Agriculture – Child and Adult Care Food Program Criteria: The non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rational for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR section 200.318(i)). The non-federal entity must also establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a)). Condition: Records detailing which vendors were contacted, when they were contacted, and support for the rationale in choosing the vendor, is not documented. Questioned Costs: None Cause: Management did not maintain a detailed history of procurement and did not document a review process. Effect: There is no reasonable assurance that the Organization managed the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Recommendation: Purchasers should record, and keep on file, backup detailing which vendors were contacted, when they were contacted, support for the rationale in choosing the vendor. Management should implement a system of internal controls for this process. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding and will implement a process for documenting the procurement history and establishing a system of internal controls.
Finding 2023-001: Procurement United States Department of Agriculture – Child Nutrition Cluster United States Department of Agriculture – Child and Adult Care Food Program Criteria: The non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rational for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR section 200.318(i)). The non-federal entity must also establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a)). Condition: Records detailing which vendors were contacted, when they were contacted, and support for the rationale in choosing the vendor, is not documented. Questioned Costs: None Cause: Management did not maintain a detailed history of procurement and did not document a review process. Effect: There is no reasonable assurance that the Organization managed the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Recommendation: Purchasers should record, and keep on file, backup detailing which vendors were contacted, when they were contacted, support for the rationale in choosing the vendor. Management should implement a system of internal controls for this process. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding and will implement a process for documenting the procurement history and establishing a system of internal controls.
Finding 2023-001: Procurement United States Department of Agriculture – Child Nutrition Cluster United States Department of Agriculture – Child and Adult Care Food Program Criteria: The non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rational for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR section 200.318(i)). The non-federal entity must also establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a)). Condition: Records detailing which vendors were contacted, when they were contacted, and support for the rationale in choosing the vendor, is not documented. Questioned Costs: None Cause: Management did not maintain a detailed history of procurement and did not document a review process. Effect: There is no reasonable assurance that the Organization managed the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Recommendation: Purchasers should record, and keep on file, backup detailing which vendors were contacted, when they were contacted, support for the rationale in choosing the vendor. Management should implement a system of internal controls for this process. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding and will implement a process for documenting the procurement history and establishing a system of internal controls.
Finding 2023-001: Procurement United States Department of Agriculture – Child Nutrition Cluster United States Department of Agriculture – Child and Adult Care Food Program Criteria: The non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rational for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR section 200.318(i)). The non-federal entity must also establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a)). Condition: Records detailing which vendors were contacted, when they were contacted, and support for the rationale in choosing the vendor, is not documented. Questioned Costs: None Cause: Management did not maintain a detailed history of procurement and did not document a review process. Effect: There is no reasonable assurance that the Organization managed the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Recommendation: Purchasers should record, and keep on file, backup detailing which vendors were contacted, when they were contacted, support for the rationale in choosing the vendor. Management should implement a system of internal controls for this process. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding and will implement a process for documenting the procurement history and establishing a system of internal controls.
Finding 2023-001: Procurement United States Department of Agriculture – Child Nutrition Cluster United States Department of Agriculture – Child and Adult Care Food Program Criteria: The non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rational for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR section 200.318(i)). The non-federal entity must also establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a)). Condition: Records detailing which vendors were contacted, when they were contacted, and support for the rationale in choosing the vendor, is not documented. Questioned Costs: None Cause: Management did not maintain a detailed history of procurement and did not document a review process. Effect: There is no reasonable assurance that the Organization managed the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Recommendation: Purchasers should record, and keep on file, backup detailing which vendors were contacted, when they were contacted, support for the rationale in choosing the vendor. Management should implement a system of internal controls for this process. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding and will implement a process for documenting the procurement history and establishing a system of internal controls.
Finding 2023-001: Procurement United States Department of Agriculture – Child Nutrition Cluster United States Department of Agriculture – Child and Adult Care Food Program Criteria: The non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rational for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR section 200.318(i)). The non-federal entity must also establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a)). Condition: Records detailing which vendors were contacted, when they were contacted, and support for the rationale in choosing the vendor, is not documented. Questioned Costs: None Cause: Management did not maintain a detailed history of procurement and did not document a review process. Effect: There is no reasonable assurance that the Organization managed the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Recommendation: Purchasers should record, and keep on file, backup detailing which vendors were contacted, when they were contacted, support for the rationale in choosing the vendor. Management should implement a system of internal controls for this process. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding and will implement a process for documenting the procurement history and establishing a system of internal controls.
: Per 2 CFR 200.302, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
2023-001 Segregation of Duties Title and Assistance Listing Number of the Federal Program: ALN 94.006 AmeriCorps State and National and ALN 94.006 COVID 19 - AmeriCorps State and National Year Finding Originated: 2022 Compliance Requirement: 2 CFR 200.303 Internal Controls Name of Federal Agency: Corporation for National and Community Service Pass-through Agency: State of Louisiana/Volunteer Louisiana Questioned Costs: None. Condition: During our audit, we obtained an understanding and tested LDSC’s internal control for purposes of planning and performing our audit procedures. In obtaining our understanding and testing LDSC’s internal controls, we determined there were inadequate segregation of duties involving certain aspects of the financial reporting cycle. Criteria: As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Cause: Due to the size of LDSC’s administrative staff, certain duties are performed by the same individual, as follows: Initiate and approve vendor invoices for payment, Write checks or initiating electronic disbursements, Review and approve payroll, including the approver’s payroll Initiate and approve reimbursements to themselves as the agency head, Access to check stock, check signing authority, and approval authorization. The following responsibilities over cash receipts are performed by the same individual: Receive and open mail, Prepare bank deposits and deposit monies received, Invoices customers for services provided (host sites). Effect: There is not adequate segregation of duties. Recommendation: To the extent possible, we recommend that board members or the contract accountant become further involved in the financial reporting process; such examples include, but are not limited to: Approve monthly financial statements, Bank statements and reconciliations, Reimbursements (travel, expense, etc.) made to agency head, Credit card activity initiated by the agency head, The board of directors should adopt an annual budget and monitor on a periodic basis. We further recommend that management incorporate these recommendations to their financial policies and procedures handbook. This will ensure that financial policies are conducted consistently and in accordance with the expectations set by management and board governance. Additionally, such policies and procedures provide structure within LDSC in the event of employee turnover or absenteeism. Views of Responsible Officials: See views of responsible officials on page 29.
2023-002 Approval of Living Allowance Payments Title and Assistance Listing Number of the Federal Program: ALN 94.006 AmeriCorps State and National and ALN 94.006 COVID 19 - AmeriCorps State and National Year Finding Originated: 2023 Compliance Requirement: 2 CFR 200.303 Internal Controls, 2 CFR 200.404, 45 CFR 2522.230 Name of Federal Agency: Corporation for National and Community Service Pass-through Agency: State of Louisiana/Volunteer Louisiana Questioned Costs: None meeting the reporting threshold of $25,000. Condition: For two out of the thirteen living allowance periods tested, approval of the payroll disbursements was not able to be provided. For one of the thirteen living allowance payroll disbursement periods tested, approval was granted, however, the payment did not appear reasonable, as required by 2 CFR 200.404. In this instance, an individual completed approximately 68% of their hourly commitment in the program but was paid approximately 95% of their annual contracted amount. Our sample was not statistically valid. Criteria: As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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).” As noted in 2 CFR 200.404 “A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.” As noted in 45 CFR 2522.230 “An AmeriCorps program may release a participant from completing a term of service for compelling personal circumstances, as determined by the program, or for cause.” Cause: Internal controls over approval of living allowances are not operating effectively. Effect: Disbursements under the program may not have been for allowable purposes. Recommendation: LDSC should ensure internal controls over approval of living allowances are implemented as designed. Views of Responsible Officials: See views of responsible officials on page 29.
2023-001 Segregation of Duties Title and Assistance Listing Number of the Federal Program: ALN 94.006 AmeriCorps State and National and ALN 94.006 COVID 19 - AmeriCorps State and National Year Finding Originated: 2022 Compliance Requirement: 2 CFR 200.303 Internal Controls Name of Federal Agency: Corporation for National and Community Service Pass-through Agency: State of Louisiana/Volunteer Louisiana Questioned Costs: None. Condition: During our audit, we obtained an understanding and tested LDSC’s internal control for purposes of planning and performing our audit procedures. In obtaining our understanding and testing LDSC’s internal controls, we determined there were inadequate segregation of duties involving certain aspects of the financial reporting cycle. Criteria: As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Cause: Due to the size of LDSC’s administrative staff, certain duties are performed by the same individual, as follows: Initiate and approve vendor invoices for payment, Write checks or initiating electronic disbursements, Review and approve payroll, including the approver’s payroll Initiate and approve reimbursements to themselves as the agency head, Access to check stock, check signing authority, and approval authorization. The following responsibilities over cash receipts are performed by the same individual: Receive and open mail, Prepare bank deposits and deposit monies received, Invoices customers for services provided (host sites). Effect: There is not adequate segregation of duties. Recommendation: To the extent possible, we recommend that board members or the contract accountant become further involved in the financial reporting process; such examples include, but are not limited to: Approve monthly financial statements, Bank statements and reconciliations, Reimbursements (travel, expense, etc.) made to agency head, Credit card activity initiated by the agency head, The board of directors should adopt an annual budget and monitor on a periodic basis. We further recommend that management incorporate these recommendations to their financial policies and procedures handbook. This will ensure that financial policies are conducted consistently and in accordance with the expectations set by management and board governance. Additionally, such policies and procedures provide structure within LDSC in the event of employee turnover or absenteeism. Views of Responsible Officials: See views of responsible officials on page 29.
2023-002 Approval of Living Allowance Payments Title and Assistance Listing Number of the Federal Program: ALN 94.006 AmeriCorps State and National and ALN 94.006 COVID 19 - AmeriCorps State and National Year Finding Originated: 2023 Compliance Requirement: 2 CFR 200.303 Internal Controls, 2 CFR 200.404, 45 CFR 2522.230 Name of Federal Agency: Corporation for National and Community Service Pass-through Agency: State of Louisiana/Volunteer Louisiana Questioned Costs: None meeting the reporting threshold of $25,000. Condition: For two out of the thirteen living allowance periods tested, approval of the payroll disbursements was not able to be provided. For one of the thirteen living allowance payroll disbursement periods tested, approval was granted, however, the payment did not appear reasonable, as required by 2 CFR 200.404. In this instance, an individual completed approximately 68% of their hourly commitment in the program but was paid approximately 95% of their annual contracted amount. Our sample was not statistically valid. Criteria: As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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).” As noted in 2 CFR 200.404 “A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.” As noted in 45 CFR 2522.230 “An AmeriCorps program may release a participant from completing a term of service for compelling personal circumstances, as determined by the program, or for cause.” Cause: Internal controls over approval of living allowances are not operating effectively. Effect: Disbursements under the program may not have been for allowable purposes. Recommendation: LDSC should ensure internal controls over approval of living allowances are implemented as designed. Views of Responsible Officials: See views of responsible officials on page 29.
2023‐002 Department of the Treasury Federal Assistance Listing #21.027 COVID‐19 Coronavirus State and Local Fiscal Recovery Funds 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: BHD, LLC calculated their indirect cost rate based on the total grant budget and took an equal amount of that per month instead of calculating the indirect cost rate per direct expenditures for each month. Cause: BHD, LLC did not have an internal control process in place to ensure the correct amounts of indirect costs were requested based on the direct costs for the same period. Effect: Without an effective internal control process in place, improper costs could be charged to the program. Questioned Costs: None reported. Context: A nonstatistical sample of 4 out of 10 indirect expenditures were selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend BHD, LLC enhance internal control procedures to ensure the indirect cost rate is applied against the monthly direct costs when requestion program reimbursements. Views of Responsible Officials: Management agrees with the finding.
Assistance Listing Number: 84.425F Program Name: COVID-19: HEERF – Institutional Portion Pass Through Identifying Number: N/A Award Year: 2022-2023 Federal Agency: U.S. Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a). Management should ensure that internal controls related to federal and state awards are appropriately designed and operating effectively in order to comply with 2 CFR 200.305. Condition: The College did not ensure that internal controls were appropriately designed and operating in regards to HEERF drawdowns which resulted in the incorrect classification of two different awards within G-5, an overdraw of funds in the amount of $1.9M and the incorrect recording of associated grant revenues. Cause: Turnover at the College had led to unqualified personnel at the management level. Effect: Journal entries for drawdown of HEERF funds were not approved within Colleague, drawdown requests were not reviewed and approved prior to submitting within G5 reporting system. Additionally, bank reconciliations were not reviewed by the CFO/VP of Finance and Business Operations in order to reconcile payments received from the DOE to grant accounts. It was determined that controls in place were not operating effectively during the fiscal year. Questioned costs: N/A Recommendation: Management must review the roles and responsibilities of accounting personnel and ensure they have the necessary background and training to properly execute required accounting functions and adhere to necessary internal control functions. Management should review the controls in place and assess that such controls are designed appropriately given the positions in roles within the accounting department. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the findings and, as discussed, the College is currently searching for a candidate to fulfill the CFO position with the appropriate level of training. The College does intend to interview accounting professionals from the community to determine if appropriate levels are present. Responsible Party: Dr. Justin Hoggard, Board President and Dixie Lytle, Director of Human Resources Expected Completion: December 31, 2024 Anticipated Completion: December 31, 2024
U.S. Department of Education Education Stabilization Fund 84.425 Federal award identification number P425E204935 Requirements: (A) Activities Allowed or Unallowed and (B) Allowable Costs Condition: For 37 tested grant disbursements to students, the College provided documentation of management approval, but was unable to provide documentation of Executive Committee approval. Criteria: Per 2 CFR section 200.303, recipients of federal awards must establish, document, and maintain effective internal controls to provide reasonable assurance that the recipient manages the federal award in compliance with statutes, regulations, terms and conditions applicable to the federal award. The College’s internal control policies state that all institutional expenses above $100 must be approved by an Executive Committee Member. Cause: The College failed to document this required approval due to management level staff turnover and new staff not being aware of the approval process. Effect: The College could not demonstrate that grant disbursements totaling $60,311 were approved by the Executive Committee. Repeat Finding: Repeat of 2022-07 Recommendation: RBT recommends that the College develop and document detailed controls over grants. Perspective: This control deficiency appears to be systemic and could impact an additional 497 grant disbursements totaling $800,540 that were not tested. Management’s Response: See corrective action plan.
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #370645239 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization included a lost revenues in the Department of Health and Human Services (HHS) special report for Period 4 that were incorrectly calculated which caused the report to be inaccurate. Cause: The Organization did not have an adequate internal control policy in place to ensure the lost revenue calculation that was reported on the HHS report was complete and accurate. Effect: The lack of adequate policies governing report preparation and submission increases the risk that the report could be filed incorrectly. Questioned Costs: None reported. Had the lost revenue calculation been reported correctly, lost revenue would have decreased by $512,211. However, the Organization did not claim any lost revenue in Period 4, so there would be no funds to return. Context: There was one lost revenue calculation required for the HHS Period 4 special report, and it was selected for testing. Repeat Finding from Prior Years: Yes, Finding 2021‐009. Recommendation: We recommend that the Organization implement procedures to ensure the lost revenue calculation reported on the HHS special report meet the requirements of the federal program. Views of Responsible Officials: Management agrees with the finding.
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #370645239 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. The Organization claimed expenses based on specifically identified COVID related expenses and general and administrative expenses. Condition: During our testing, there was no documentation of review and approval of the expenditure listing or lost revenue calculation. The Organization also miscalculated the portion of an expense that was reimbursed by another source. Cause: The Organization did not have an adequate internal control policy in place to ensure review and approval of expenditures and lost revenue claimed under the federal programs was documented and that all claimed expenditures were accurately calculated and claimed. Effect: The lack of adequate policies governing review and approval over the expenditure listing and lost revenue calculation increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance and miscalculation of reimbursement by other sources in a timely manner. Question Costs: None reported. Context/Sampling: A nonstatistical sample of 65 expenditures were selected for testing, which accounted for $172,298 of $940,628 direct program expenditures. Of these 65, the Medicare reimbursement was miscalculated for one selected item. There was one lost revenue calculation and one expenditure detail and both were tested. Repeat Finding from Prior Year: Yes, Finding 2021‐008. Recommendation: We recommend that the Organization enhance internal control policies to ensure the expenditure listing and lost revenue calculation are reviewed and approved to ensure that all payments are necessary, correct, meet the requirements of the federal program, and are properly recorded in the reports required to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.
Internal Control over Compliance Finding No. 2023-003 – Documentation of Internal Controls Material Weakness Federal program: Student Financial Aid Cluster – Federal Direct Student Loans (ALN 84.268), U.S. Department of Education Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: We noted that controls identified by management over material compliance requirements lacked sufficient documentation to conclude application of controls is in place. Cause: The cause is due to ineffective internal control procedures with no physical indication of review or an audit trail that indicates that the identified control took place. Effect: Ineffective internal control procedures resulted in compliance findings. See Finding No. 2023-002. Reportable questioned costs: None Context: Internal controls in place over material compliance requirements identified by management had no documentation in place to demonstrate application of controls. Repeat finding: This is a repeat finding of 2022-001. Recommendation: We recommend that the Institute ensures that all internal control procedures in place include documentation that demonstrates application of controls. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #370645239 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization included a lost revenues in the Department of Health and Human Services (HHS) special report for Period 4 that were incorrectly calculated which caused the report to be inaccurate. Cause: The Organization did not have an adequate internal control policy in place to ensure the lost revenue calculation that was reported on the HHS report was complete and accurate. Effect: The lack of adequate policies governing report preparation and submission increases the risk that the report could be filed incorrectly. Questioned Costs: None reported. Had the lost revenue calculation been reported correctly, lost revenue would have decreased by $512,211. However, the Organization did not claim any lost revenue in Period 4, so there would be no funds to return. Context: There was one lost revenue calculation required for the HHS Period 4 special report, and it was selected for testing. Repeat Finding from Prior Years: Yes, Finding 2021‐009. Recommendation: We recommend that the Organization implement procedures to ensure the lost revenue calculation reported on the HHS special report meet the requirements of the federal program. Views of Responsible Officials: Management agrees with the finding.
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #370645239 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. The Organization claimed expenses based on specifically identified COVID related expenses and general and administrative expenses. Condition: During our testing, there was no documentation of review and approval of the expenditure listing or lost revenue calculation. The Organization also miscalculated the portion of an expense that was reimbursed by another source. Cause: The Organization did not have an adequate internal control policy in place to ensure review and approval of expenditures and lost revenue claimed under the federal programs was documented and that all claimed expenditures were accurately calculated and claimed. Effect: The lack of adequate policies governing review and approval over the expenditure listing and lost revenue calculation increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance and miscalculation of reimbursement by other sources in a timely manner. Question Costs: None reported. Context/Sampling: A nonstatistical sample of 65 expenditures were selected for testing, which accounted for $172,298 of $940,628 direct program expenditures. Of these 65, the Medicare reimbursement was miscalculated for one selected item. There was one lost revenue calculation and one expenditure detail and both were tested. Repeat Finding from Prior Year: Yes, Finding 2021‐008. Recommendation: We recommend that the Organization enhance internal control policies to ensure the expenditure listing and lost revenue calculation are reviewed and approved to ensure that all payments are necessary, correct, meet the requirements of the federal program, and are properly recorded in the reports required to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.
Internal Control over Compliance Finding No. 2023-003 – Documentation of Internal Controls Material Weakness Federal program: Student Financial Aid Cluster – Federal Direct Student Loans (ALN 84.268), U.S. Department of Education Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: We noted that controls identified by management over material compliance requirements lacked sufficient documentation to conclude application of controls is in place. Cause: The cause is due to ineffective internal control procedures with no physical indication of review or an audit trail that indicates that the identified control took place. Effect: Ineffective internal control procedures resulted in compliance findings. See Finding No. 2023-002. Reportable questioned costs: None Context: Internal controls in place over material compliance requirements identified by management had no documentation in place to demonstrate application of controls. Repeat finding: This is a repeat finding of 2022-001. Recommendation: We recommend that the Institute ensures that all internal control procedures in place include documentation that demonstrates application of controls. Views of responsible officials: Management agrees with the finding. See corrective action plan.
Finding: Item 2023-001 – Procurement and Debarment Federal Program – Child and Adult Care Food Program ALN (CFDA) Numbers – 10.558 Agency Award Number – DC-55-811 Federal Award Year – June 30, 2023 Federal Agency – U.S. Department of Agriculture Pass-Through Entity – Oklahoma Dept. of Education Questioned Costs $ - Criteria: 2 CFR § 200.303, Internal Controls requires that a non-Federal entity establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Food Bank's procurement policy states: The CEO will not enter into any new contracts or purchase agreements or new commitments of any kind valued at or above $500,000 per year without Board review and approval. Condition/contex: The Food Bank did not obtain proper approval by the Board for procurement of the food products used for the Child and Adult Care Food Program based on the policy for acquiring goods and services. Cause: The Food Bank did not follow its procurement policy for Board review and approval of the purchase contract under the federal program. Effect: Without appropriate approvals, the Food Bank could obtain food products that are not needed or from vendors who are not approved under the program. Repeat finding: Finding is a repeat of finding 2022-001. Recommendation: The Food Bank should institute a procedure to ensure appropriate approval of all purchases under the program. View of responsible officials: Management's response is reported in "Management's Views and Corrective Action Plan" at the end of this report.
Program - AL 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Suspension & Debarment Grant Number & Year - SLFRP0847, March 3, 2021, through December 31, 2024 Federal Grantor Agency -U.S. Department of the Treasury Criteria -Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.303 (January 1, 2023) states the following, in relevant part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR § 200.214 (January 1, 2023) states the following: Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The U.S. Department of the Treasury adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR § 1000.10 (January 1, 2023), which states the following: Except for the deviations set forth elsewhere in this Part, the Department of the Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200. 2 CFR § 180.300 (January 1, 2023) requires non-Federal entities to verify that an entity is not excluded or disqualified prior to entering into a covered transaction by “(a) Checking SAM Exclusions; or (b) Collecting a certification from that . . . [entity]; or (c) Adding a clause or condition to the covered transaction with that . . . [entity].” A good internal control plan requires the County to have proper procedures in place to verify that contractors paid with Federal funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. Condition -Dawson County could not provide documentation to support that the County implemented effective internal controls to ensure that suspension and debarment requirements were followed and adequately documented. We noted the County used Coronavirus State and Local Fiscal Recovery Funds to pay five vendors over $25,000 each, totaling $638,407, during the fiscal year ended June 30, 2023. The County failed to ensure that these vendors were not excluded or disqualified prior to entering into these covered transactions. We reviewed SAM.gov, and noted that none of these vendors were suspended, debarred, or otherwise excluded from participation in Federal programs or activities as of the date testing was performed. Repeat Finding - No Questioned Costs - None Statistical Sample - No Context - The following table provides details of the covered transactions noted: Cause - Lack of procedures and knowledge regarding suspension and debarment requirements. Effect - Without adequate procedures to ensure contractors are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations, leading to possible Federal sanctions. Recommendation - We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that a contractor is not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and those procedures are adequately documented. View of Officials - The County has put procedures in place; when a contractor is hired, sam.gov will be utilized to verify the entity has not been suspended or debarred.
Federal Agency: U.S. Department of Education Federal Program Name: TRIO Cluster – Educational Opportunity Centers Assistance Listing Number: 84.066 Federal Award Identification Number and Year: P066A210018 - 2022 Award Period: September 1, 2022 through August 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance Requirement – Cash Management Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, subpart D, § 200.303 requires that non-federal entities must evaluate and monitor their compliance with statutes, regulations, and the terms and conditions of Federal awards. Condition: We tested six (6) cash drawdowns for the fiscal year 2023 grant program as part of our cash management testing. Three (3) of the cash drawdowns tested did not have documented evidence of review and approval over the benefits expense rate drawn on the grant program. Questioned costs: None Context: Three (3) out of six (6) cash drawdown requests tested. The sampling was a statistically valid sample. During testing, we noted the Corporation requested a flat percentage rate of 20.6% for benefits expense reimbursements. This flat rate applied by the Corporation did not agree to the approved grant budget of 20% for the fiscal year 2023 grant program. We noted the difference did not result in noncompliance with the grant award due to the fact the total reallocation did not exceed the 25% reallocation threshold of the grant award as allowed by the Department of Education. Cause: Internal controls were not implemented to ensure the benefits expense reimbursement rate was updated subsequent to the rate change for the fiscal year 2023 grant program. Effect: The federal program funds were drawn down at the incorrect rate for the requests tested. Management corrected the reimbursement rate in the drawdown template subsequent to our communication about the condition. Repeat Finding: No Recommendation: We recommend management perform a documented review of the federal drawdowns to the ensure benefits reimbursement rate is timely updated in accordance with the requirements new grant awards. Views of Responsible Officials: Management notes that this finding did not result in any questioned or improper cost to the Federal awarding agency. The impact of this finding, had the matter not been detected, would have been that slightly more costs would have been drawn down as benefits and slightly less would have been drawn down as salaries. Both are permitted costs under the Uniform Guidance and a shift of costs from salaries to benefits does not require requesting prior approval from the Federal awarding agency. VSAC also notes the presence and performance of compensating controls which would preclude the charging to the Department of Education of any costs of a nature not permitted under the Uniform Guidance or by the grant application budget. VSAC also notes the presence and performance of compensating controls which would preclude drawing down more than the annual maximum amount permitted under this Federal award.
Finding 2023-001 – Return of Title IV Funds – Enrollment Reporting Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Pell Grant Program: 84.063 Federal Direct Student Loans: 84.268 Federal Supplemental Educational Opportunity Grants 84.007 Federal Award Year 2022-2023 Condition For eight out of ten students tested (80%) who withdrew from the College, the students' status change at the campus level and program level was not reported to the National Student Loan Data System (NSLDS) within the 60 day requirement. Criteria CFR section 685.309 and 690.83(b)(2) requires the College to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that enrollment status changes are reported timely. Questioned Costs There were no questioned costs related to testing of enrollment reporting. Cause Certain reports submitted by the College to the NSLDS contained formatting errors that needed to be cleared by the College before they could be processed. The College did not clear the errors timely and therefore missed the 60-day requirement to report students’ status changes at the campus and program level. Prevalence Frequent. Eight out of ten students selected for testing. Effect Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Recommendation We recommend the College implement monitoring procedures which will promptly notify the financial aid office of any errors in submission of the enrollment data to the National Student Clearinghouse. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes to the lender in a timely manner and resolving any errors in submissions. The College should implement a review process to ensure all submission errors are addressed by the financial aid office in a timely manner. Views of responsible officials We agree with this finding. See corrective action plan.
Finding 2023-001 – Return of Title IV Funds – Enrollment Reporting Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Pell Grant Program: 84.063 Federal Direct Student Loans: 84.268 Federal Supplemental Educational Opportunity Grants 84.007 Federal Award Year 2022-2023 Condition For eight out of ten students tested (80%) who withdrew from the College, the students' status change at the campus level and program level was not reported to the National Student Loan Data System (NSLDS) within the 60 day requirement. Criteria CFR section 685.309 and 690.83(b)(2) requires the College to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that enrollment status changes are reported timely. Questioned Costs There were no questioned costs related to testing of enrollment reporting. Cause Certain reports submitted by the College to the NSLDS contained formatting errors that needed to be cleared by the College before they could be processed. The College did not clear the errors timely and therefore missed the 60-day requirement to report students’ status changes at the campus and program level. Prevalence Frequent. Eight out of ten students selected for testing. Effect Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Recommendation We recommend the College implement monitoring procedures which will promptly notify the financial aid office of any errors in submission of the enrollment data to the National Student Clearinghouse. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes to the lender in a timely manner and resolving any errors in submissions. The College should implement a review process to ensure all submission errors are addressed by the financial aid office in a timely manner. Views of responsible officials We agree with this finding. See corrective action plan.
Finding 2023-001 – Return of Title IV Funds – Enrollment Reporting Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Pell Grant Program: 84.063 Federal Direct Student Loans: 84.268 Federal Supplemental Educational Opportunity Grants 84.007 Federal Award Year 2022-2023 Condition For eight out of ten students tested (80%) who withdrew from the College, the students' status change at the campus level and program level was not reported to the National Student Loan Data System (NSLDS) within the 60 day requirement. Criteria CFR section 685.309 and 690.83(b)(2) requires the College to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that enrollment status changes are reported timely. Questioned Costs There were no questioned costs related to testing of enrollment reporting. Cause Certain reports submitted by the College to the NSLDS contained formatting errors that needed to be cleared by the College before they could be processed. The College did not clear the errors timely and therefore missed the 60-day requirement to report students’ status changes at the campus and program level. Prevalence Frequent. Eight out of ten students selected for testing. Effect Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Recommendation We recommend the College implement monitoring procedures which will promptly notify the financial aid office of any errors in submission of the enrollment data to the National Student Clearinghouse. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes to the lender in a timely manner and resolving any errors in submissions. The College should implement a review process to ensure all submission errors are addressed by the financial aid office in a timely manner. Views of responsible officials We agree with this finding. See corrective action plan.
Finding 2023-001 – Return of Title IV Funds – Enrollment Reporting Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Pell Grant Program: 84.063 Federal Direct Student Loans: 84.268 Federal Supplemental Educational Opportunity Grants 84.007 Federal Award Year 2022-2023 Condition For eight out of ten students tested (80%) who withdrew from the College, the students' status change at the campus level and program level was not reported to the National Student Loan Data System (NSLDS) within the 60 day requirement. Criteria CFR section 685.309 and 690.83(b)(2) requires the College to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that enrollment status changes are reported timely. Questioned Costs There were no questioned costs related to testing of enrollment reporting. Cause Certain reports submitted by the College to the NSLDS contained formatting errors that needed to be cleared by the College before they could be processed. The College did not clear the errors timely and therefore missed the 60-day requirement to report students’ status changes at the campus and program level. Prevalence Frequent. Eight out of ten students selected for testing. Effect Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Recommendation We recommend the College implement monitoring procedures which will promptly notify the financial aid office of any errors in submission of the enrollment data to the National Student Clearinghouse. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes to the lender in a timely manner and resolving any errors in submissions. The College should implement a review process to ensure all submission errors are addressed by the financial aid office in a timely manner. Views of responsible officials We agree with this finding. See corrective action plan.
Finding 2023-001 – Return of Title IV Funds – Enrollment Reporting Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Pell Grant Program: 84.063 Federal Direct Student Loans: 84.268 Federal Supplemental Educational Opportunity Grants 84.007 Federal Award Year 2022-2023 Condition For eight out of ten students tested (80%) who withdrew from the College, the students' status change at the campus level and program level was not reported to the National Student Loan Data System (NSLDS) within the 60 day requirement. Criteria CFR section 685.309 and 690.83(b)(2) requires the College to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that enrollment status changes are reported timely. Questioned Costs There were no questioned costs related to testing of enrollment reporting. Cause Certain reports submitted by the College to the NSLDS contained formatting errors that needed to be cleared by the College before they could be processed. The College did not clear the errors timely and therefore missed the 60-day requirement to report students’ status changes at the campus and program level. Prevalence Frequent. Eight out of ten students selected for testing. Effect Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Recommendation We recommend the College implement monitoring procedures which will promptly notify the financial aid office of any errors in submission of the enrollment data to the National Student Clearinghouse. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes to the lender in a timely manner and resolving any errors in submissions. The College should implement a review process to ensure all submission errors are addressed by the financial aid office in a timely manner. Views of responsible officials We agree with this finding. See corrective action plan.
Finding 2023-001 – Return of Title IV Funds – Enrollment Reporting Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Pell Grant Program: 84.063 Federal Direct Student Loans: 84.268 Federal Supplemental Educational Opportunity Grants 84.007 Federal Award Year 2022-2023 Condition For eight out of ten students tested (80%) who withdrew from the College, the students' status change at the campus level and program level was not reported to the National Student Loan Data System (NSLDS) within the 60 day requirement. Criteria CFR section 685.309 and 690.83(b)(2) requires the College to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that enrollment status changes are reported timely. Questioned Costs There were no questioned costs related to testing of enrollment reporting. Cause Certain reports submitted by the College to the NSLDS contained formatting errors that needed to be cleared by the College before they could be processed. The College did not clear the errors timely and therefore missed the 60-day requirement to report students’ status changes at the campus and program level. Prevalence Frequent. Eight out of ten students selected for testing. Effect Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Recommendation We recommend the College implement monitoring procedures which will promptly notify the financial aid office of any errors in submission of the enrollment data to the National Student Clearinghouse. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes to the lender in a timely manner and resolving any errors in submissions. The College should implement a review process to ensure all submission errors are addressed by the financial aid office in a timely manner. Views of responsible officials We agree with this finding. See corrective action plan.
Finding 2023-005 – Program Eligibility – Clock to Credit Hour Conversion Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Pell Grant Program: 84.063 Federal Direct Student Loans: 84.268 Federal Supplemental Educational Opportunity Grants 84.007 Federal Award Year 2022-2023 Condition The College did not apply the appropriate clock to credit hour conversion formula for certain applicable financial aid eligible programs. The College also did not have sufficient evidence of controls being in place to ensure compliance with this requirement. Criteria Under Uniform Grant Guidance (34 CFR 688.8) if the institution offers an undergraduate educational program in credit hours in what is considered a non-degree program, the appropriate conversion formula must be applied unless: • The program is at least two academic years in length and provides an associate degree, a bachelor’s degree, a professional degree, or an equivalent as determined by the Department (Note that this does not permit an institution to ask for a determination that a non-degree program is equivalent to a degree program); or • Each course within the program is acceptable for full credit toward a single associate degree, bachelor’s degree, or professional degree provided by that institution, or equivalent degree as determined by the Department, provided that the institution’s degree requires at least two academic years of study and the institution can demonstrate that students enroll in, and graduate from the degree program. The formula will determine if, after the conversion, the program includes the minimum number of credit hours to qualify as an eligible program for financial aid purposes. The formula also determines the number of Title IV credit hours associated with each class that an institution can use to determine a student’s enrollment status during the program. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures in place to ensure that the appropriate clock to credit hour conversion formula is applied to applicable programs. Questioned Costs Unknown Cause The College failed to identify certain applicable requirements and therefore did not perform this calculation. Prevalence Frequent. Five out of five programs selected for testing. Effect Lack of proper clock to credit hour conversions could result in the over awarding of financial aid to students enrolled in certain programs. Recommendation We recommend the College review current processes, policies and procedures to ensure that clock to credit hour conversion formulas are being properly applied and documentation is being retained by the College. Views of responsible officials We agree with this finding. See corrective action plan.