Finding No: 2023-002 Reporting Federal Agency: U.S. Department of Health and Human Services Pass-Through Entities: N/A Assistance Listing Number: 93.498 Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Year: January 1 to March 31, 2023 (Period 4) and July 1 to September 30, 2023 (Period 5) Criteria or Requirement Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Found, Including Perspective The review of lost revenue and related personnel expenses was not at a sufficient level of detail to demonstrate the supporting expenditures agreed to the portal reports. Although management reviewed and reconciled the expenditures to the portal reports, it was not evident how the 2022 adjustments to lost revenue made by HRSA and identified during the 2022 single audit impacted the current year portal reporting. Only a portion of the adjustments were reflected in the Period 4 and Period 5 reporting and management was not tracking which HRSA adjustments had been made, what was left to be made, and to which entities the adjustments were related to. Possible Cause Management did not have a single owner of the portal reports reconciliation process whom could identify that the HRSA adjustments were not being tracked. Questioned Cost None Effect During the audit, the System updated the reconciliation to agree to the portal reports for lost revenue amounts that had been adjusted and determined the remaining portion of the 2022 adjustments that needed to be included in Period 6 reporting. Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year Not a repeat finding. Recommendation The System should strengthen controls over the management review process to ensure the amounts reported the HRSA portal are supported. View of Responsible Officials Management concurs with the finding. This did not result in an overstatement of qualifying expenditures and no repayment of funding was required. The reconciliation review process will be enhanced for funding that applies to multiple funding periods.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $142,860 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment List. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two walk‐in freezers for $71,430 each, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment List. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $142,860 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment List. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two walk‐in freezers for $71,430 each, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment List. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $142,860 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment List. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two walk‐in freezers for $71,430 each, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment List. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $142,860 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment List. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two walk‐in freezers for $71,430 each, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment List. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
Finding 2023-001: Cut off of Expenses Information on the Federal Program: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Title 2 CFR 200 Section 200.303 “Internal Controls” requires recipients of Federal funds to establish internal controls that should be in compliance with guidance in the "Integral Control Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our audit, we noted expenses that were applicable to fiscal year ended June 30, 2022 that were entered into their accounting system in the fiscal year ended June 30, 2023. In addition, as a result of these items being in the wrong period, management did a search and noted items applicable to the fiscal year ended June 30, 2023 that were initially recorded in fiscal year ending June 30, 2024. Cause: The employee that is in charge of submitting invoices to Bill.com for grant payments failed to submit these into their accounting system in the proper period. Effect or Potential Effect: This caused the Schedule of Expenditures of Federal Awards to be understated for the year ended June 30, 2022 and overstated for the year ended June 30, 2023. Questioned Costs: None Context: Our audit procedures over accounts payable consisted of items over our materiality threshold These items were identified through these tests. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that AUCD develop additional procedures to ensure that the employee in charge of this program records all invoices to be paid in the proper period.
Finding 2023-001: Cut off of Expenses Information on the Federal Program: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Title 2 CFR 200 Section 200.303 “Internal Controls” requires recipients of Federal funds to establish internal controls that should be in compliance with guidance in the "Integral Control Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our audit, we noted expenses that were applicable to fiscal year ended June 30, 2022 that were entered into their accounting system in the fiscal year ended June 30, 2023. In addition, as a result of these items being in the wrong period, management did a search and noted items applicable to the fiscal year ended June 30, 2023 that were initially recorded in fiscal year ending June 30, 2024. Cause: The employee that is in charge of submitting invoices to Bill.com for grant payments failed to submit these into their accounting system in the proper period. Effect or Potential Effect: This caused the Schedule of Expenditures of Federal Awards to be understated for the year ended June 30, 2022 and overstated for the year ended June 30, 2023. Questioned Costs: None Context: Our audit procedures over accounts payable consisted of items over our materiality threshold These items were identified through these tests. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that AUCD develop additional procedures to ensure that the employee in charge of this program records all invoices to be paid in the proper period.
Federal Award Year: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests, Enrollment Reporting Criteria or Requirement According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via the National Students Loan Data System (NSLDS) within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school 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. Department of Education lists several certification methods for enrollment reporting, including certifying directly through the NSLDS web site, certifying through the NLSDS’s batch enrollment reporting process, or through certification of rosters provided to the National Student Clearinghouse (NSC). Additionally, there are two categories of enrollment information within NSLDS, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Found The College generally certifies its enrollment reports through rosters provided to the NSC. Of the forty (40) students with enrollment changes we selected for test work, we noted that for four (4) students, the College did not report the student’s status/enrollment change timely to NSLDS. The College did not report the status change until 145 days following notification of the change in status. Possible Cause and Effect The College’s internal control processes did not operate consistently to ensure that all enrollment status changes are submitted timely to NSLDS. The students identified in our sample as being reported late were identified as graduates in their enrollment system however were missing certain requirements to complete their degree. The College reported them beyond the allowed 30 or 60 days as withdrawn (W) until their degree requirements are completed at which time they will change the status to graduated (G). Delayed submission of student enrollment status information affects the determination that lenders and servicers of student loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the College review its process to ensure that any enrollment changes are accurately reported within the required 30 or 60 day time frame to NSLDS. The College should work with NSC as needed to ensure proper protocols of transmission to NSLDS occur. View of College Officials The Office of the Registrar recognizes the importance of both timely and accurate reporting of enrollment status changes for lenders and servicers of student loans to determine in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies.
Federal Award Year: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests, Enrollment Reporting Criteria or Requirement According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via the National Students Loan Data System (NSLDS) within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school 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. Department of Education lists several certification methods for enrollment reporting, including certifying directly through the NSLDS web site, certifying through the NLSDS’s batch enrollment reporting process, or through certification of rosters provided to the National Student Clearinghouse (NSC). Additionally, there are two categories of enrollment information within NSLDS, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Found The College generally certifies its enrollment reports through rosters provided to the NSC. Of the forty (40) students with enrollment changes we selected for test work, we noted that for four (4) students, the College did not report the student’s status/enrollment change timely to NSLDS. The College did not report the status change until 145 days following notification of the change in status. Possible Cause and Effect The College’s internal control processes did not operate consistently to ensure that all enrollment status changes are submitted timely to NSLDS. The students identified in our sample as being reported late were identified as graduates in their enrollment system however were missing certain requirements to complete their degree. The College reported them beyond the allowed 30 or 60 days as withdrawn (W) until their degree requirements are completed at which time they will change the status to graduated (G). Delayed submission of student enrollment status information affects the determination that lenders and servicers of student loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the College review its process to ensure that any enrollment changes are accurately reported within the required 30 or 60 day time frame to NSLDS. The College should work with NSC as needed to ensure proper protocols of transmission to NSLDS occur. View of College Officials The Office of the Registrar recognizes the importance of both timely and accurate reporting of enrollment status changes for lenders and servicers of student loans to determine in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies.
Federal Award Year: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests, Enrollment Reporting Criteria or Requirement According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via the National Students Loan Data System (NSLDS) within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school 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. Department of Education lists several certification methods for enrollment reporting, including certifying directly through the NSLDS web site, certifying through the NLSDS’s batch enrollment reporting process, or through certification of rosters provided to the National Student Clearinghouse (NSC). Additionally, there are two categories of enrollment information within NSLDS, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Found The College generally certifies its enrollment reports through rosters provided to the NSC. Of the forty (40) students with enrollment changes we selected for test work, we noted that for four (4) students, the College did not report the student’s status/enrollment change timely to NSLDS. The College did not report the status change until 145 days following notification of the change in status. Possible Cause and Effect The College’s internal control processes did not operate consistently to ensure that all enrollment status changes are submitted timely to NSLDS. The students identified in our sample as being reported late were identified as graduates in their enrollment system however were missing certain requirements to complete their degree. The College reported them beyond the allowed 30 or 60 days as withdrawn (W) until their degree requirements are completed at which time they will change the status to graduated (G). Delayed submission of student enrollment status information affects the determination that lenders and servicers of student loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the College review its process to ensure that any enrollment changes are accurately reported within the required 30 or 60 day time frame to NSLDS. The College should work with NSC as needed to ensure proper protocols of transmission to NSLDS occur. View of College Officials The Office of the Registrar recognizes the importance of both timely and accurate reporting of enrollment status changes for lenders and servicers of student loans to determine in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies.
Federal Award Year: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests, Enrollment Reporting Criteria or Requirement According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via the National Students Loan Data System (NSLDS) within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school 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. Department of Education lists several certification methods for enrollment reporting, including certifying directly through the NSLDS web site, certifying through the NLSDS’s batch enrollment reporting process, or through certification of rosters provided to the National Student Clearinghouse (NSC). Additionally, there are two categories of enrollment information within NSLDS, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Found The College generally certifies its enrollment reports through rosters provided to the NSC. Of the forty (40) students with enrollment changes we selected for test work, we noted that for four (4) students, the College did not report the student’s status/enrollment change timely to NSLDS. The College did not report the status change until 145 days following notification of the change in status. Possible Cause and Effect The College’s internal control processes did not operate consistently to ensure that all enrollment status changes are submitted timely to NSLDS. The students identified in our sample as being reported late were identified as graduates in their enrollment system however were missing certain requirements to complete their degree. The College reported them beyond the allowed 30 or 60 days as withdrawn (W) until their degree requirements are completed at which time they will change the status to graduated (G). Delayed submission of student enrollment status information affects the determination that lenders and servicers of student loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the College review its process to ensure that any enrollment changes are accurately reported within the required 30 or 60 day time frame to NSLDS. The College should work with NSC as needed to ensure proper protocols of transmission to NSLDS occur. View of College Officials The Office of the Registrar recognizes the importance of both timely and accurate reporting of enrollment status changes for lenders and servicers of student loans to determine in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies.
Federal Award Year: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests, Enrollment Reporting Criteria or Requirement According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via the National Students Loan Data System (NSLDS) within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school 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. Department of Education lists several certification methods for enrollment reporting, including certifying directly through the NSLDS web site, certifying through the NLSDS’s batch enrollment reporting process, or through certification of rosters provided to the National Student Clearinghouse (NSC). Additionally, there are two categories of enrollment information within NSLDS, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Found The College generally certifies its enrollment reports through rosters provided to the NSC. Of the forty (40) students with enrollment changes we selected for test work, we noted that for four (4) students, the College did not report the student’s status/enrollment change timely to NSLDS. The College did not report the status change until 145 days following notification of the change in status. Possible Cause and Effect The College’s internal control processes did not operate consistently to ensure that all enrollment status changes are submitted timely to NSLDS. The students identified in our sample as being reported late were identified as graduates in their enrollment system however were missing certain requirements to complete their degree. The College reported them beyond the allowed 30 or 60 days as withdrawn (W) until their degree requirements are completed at which time they will change the status to graduated (G). Delayed submission of student enrollment status information affects the determination that lenders and servicers of student loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that the College review its process to ensure that any enrollment changes are accurately reported within the required 30 or 60 day time frame to NSLDS. The College should work with NSC as needed to ensure proper protocols of transmission to NSLDS occur. View of College Officials The Office of the Registrar recognizes the importance of both timely and accurate reporting of enrollment status changes for lenders and servicers of student loans to determine in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies.
Type of Finding – Significant Deficiency in Internal Control Over Compliance Condition/Context – Internal control procedures over reporting requirements did not ensure compliance with federal awards. The reports prepared by the Director of Grant Compliance and Procurement are not reviewed and approved before being submitted. Criteria – In accordance with Uniform Guidance, 2 CFR 200.328(i) requires that an entity implements control over the performance and financial reporting. 2 CFR 200.303(a) requires an entity to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes. Cause – Clerical oversight. Effect – Noncompliance with the Compliance Supplement and Uniform Guidance. Repeat Finding – No Questioned Costs – None Recommendation – The Organization implements a review and approval process over the performance and financial reports. View of Responsible Officials - There is no disagreement with the audit findings.
Type of Finding – Significant Deficiency in Internal Control Over Compliance Condition/Context – Internal control procedures over reporting requirements did not ensure compliance with federal awards. The reports prepared by the Director of Grant Compliance and Procurement are not reviewed and approved before being submitted. Criteria – In accordance with Uniform Guidance, 2 CFR 200.328(i) requires that an entity implements control over the performance and financial reporting. 2 CFR 200.303(a) requires an entity to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes. Cause – Clerical oversight. Effect – Noncompliance with the Compliance Supplement and Uniform Guidance. Repeat Finding – No Questioned Costs – None Recommendation – The Organization implements a review and approval process over the performance and financial reports. View of Responsible Officials - There is no disagreement with the audit findings.
Type of Finding – Significant Deficiency in Internal Control Over Compliance Condition/Context – Internal control procedures over reporting requirements did not ensure compliance with federal awards. The reports prepared by the Director of Grant Compliance and Procurement are not reviewed and approved before being submitted. Criteria – In accordance with Uniform Guidance, 2 CFR 200.328(i) requires that an entity implements control over the performance and financial reporting. 2 CFR 200.303(a) requires an entity to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes. Cause – Clerical oversight. Effect – Noncompliance with the Compliance Supplement and Uniform Guidance. Repeat Finding – No Questioned Costs – None Recommendation – The Organization implements a review and approval process over the performance and financial reports. View of Responsible Officials - There is no disagreement with the audit findings.
Federal Agency: Department of Justice Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Minnesota Office of Justice Programs Pass-Through Number: A-ARPS-2022-WOMADV-00015 Award Period: 01/01/2022 – 03/31/2023 Type of Finding: • Significant Deficiency in Internal Control Criteria: 2 CFR §200.303 requires entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization did not have documented approval of expenses reimbursed through the grant. Context: No documentation of approval of expenditures for two out of twenty-eight selections were kept. Cause: Management was not able to find the documented approval of invoices/credit card statement due to employee turnover within the Organization. Effect: When internal controls are not in place over expenses, there is increased risk that expenses charged to the grant could be incorrect. Recommendation: The Organization should implement internal controls to ensure documentation of approval for expenditures is retained. View of Responsible Officials: Management is in agreement with this audit finding.
Federal Agency: Department of Justice Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Minnesota Office of Justice Programs Pass-Through Number: A-ARPS-2022-WOMADV-00015 Award Period: 01/01/2022 – 03/31/2023 Type of Finding: • Significant Deficiency in Internal Control Criteria: 2 CFR §200.303 requires entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization did not have documented approval of expenses reimbursed through the grant. Context: No documentation of approval of expenditures for two out of twenty-eight selections were kept. Cause: Management was not able to find the documented approval of invoices/credit card statement due to employee turnover within the Organization. Effect: When internal controls are not in place over expenses, there is increased risk that expenses charged to the grant could be incorrect. Recommendation: The Organization should implement internal controls to ensure documentation of approval for expenditures is retained. View of Responsible Officials: Management is in agreement with this audit finding.
Federal Agency: Department of Justice Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Minnesota Office of Justice Programs Pass-Through Number: A-ARPS-2022-WOMADV-00015 Award Period: 01/01/2022 – 03/31/2023 Type of Finding: • Significant Deficiency in Internal Control Criteria: 2 CFR §200.303 requires entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization did not have documented approval of expenses reimbursed through the grant. Context: No documentation of approval of expenditures for two out of twenty-eight selections were kept. Cause: Management was not able to find the documented approval of invoices/credit card statement due to employee turnover within the Organization. Effect: When internal controls are not in place over expenses, there is increased risk that expenses charged to the grant could be incorrect. Recommendation: The Organization should implement internal controls to ensure documentation of approval for expenditures is retained. View of Responsible Officials: Management is in agreement with this audit finding.
2023-001 PROCUREMENT Federal Program Information: Federal Transit Cluster 20.507 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.318(h) states “the non-federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.” Condition: For all of the contracts selected for testing, documentation could not be located to support that the Authority verified the entity it planned to enter into a covered transaction with was not debarred, suspended, or otherwise excluded. Questioned Costs: Unknown Context: Total federal expenditures for the Federal Transit Cluster were $10,065,940 for the year ended June 30, 2023. Cause: The Authority did not retain adequate documentation showing entities were not debarred, suspended, or otherwise excluded. Effect: The Authority is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Authority implement controls to ensure that entities are not debarred, suspended, or otherwise excluded and that adequate supporting documentation is maintained. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2023-001 PROCUREMENT Federal Program Information: Federal Transit Cluster 20.507 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.318(h) states “the non-federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.” Condition: For all of the contracts selected for testing, documentation could not be located to support that the Authority verified the entity it planned to enter into a covered transaction with was not debarred, suspended, or otherwise excluded. Questioned Costs: Unknown Context: Total federal expenditures for the Federal Transit Cluster were $10,065,940 for the year ended June 30, 2023. Cause: The Authority did not retain adequate documentation showing entities were not debarred, suspended, or otherwise excluded. Effect: The Authority is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Authority implement controls to ensure that entities are not debarred, suspended, or otherwise excluded and that adequate supporting documentation is maintained. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2023-001 PROCUREMENT Federal Program Information: Federal Transit Cluster 20.507 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.318(h) states “the non-federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.” Condition: For all of the contracts selected for testing, documentation could not be located to support that the Authority verified the entity it planned to enter into a covered transaction with was not debarred, suspended, or otherwise excluded. Questioned Costs: Unknown Context: Total federal expenditures for the Federal Transit Cluster were $10,065,940 for the year ended June 30, 2023. Cause: The Authority did not retain adequate documentation showing entities were not debarred, suspended, or otherwise excluded. Effect: The Authority is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Authority implement controls to ensure that entities are not debarred, suspended, or otherwise excluded and that adequate supporting documentation is maintained. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2023-001 PROCUREMENT Federal Program Information: Federal Transit Cluster 20.507 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.318(h) states “the non-federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.” Condition: For all of the contracts selected for testing, documentation could not be located to support that the Authority verified the entity it planned to enter into a covered transaction with was not debarred, suspended, or otherwise excluded. Questioned Costs: Unknown Context: Total federal expenditures for the Federal Transit Cluster were $10,065,940 for the year ended June 30, 2023. Cause: The Authority did not retain adequate documentation showing entities were not debarred, suspended, or otherwise excluded. Effect: The Authority is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Authority implement controls to ensure that entities are not debarred, suspended, or otherwise excluded and that adequate supporting documentation is maintained. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2023-001 PROCUREMENT Federal Program Information: Federal Transit Cluster 20.507 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.318(h) states “the non-federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.” Condition: For all of the contracts selected for testing, documentation could not be located to support that the Authority verified the entity it planned to enter into a covered transaction with was not debarred, suspended, or otherwise excluded. Questioned Costs: Unknown Context: Total federal expenditures for the Federal Transit Cluster were $10,065,940 for the year ended June 30, 2023. Cause: The Authority did not retain adequate documentation showing entities were not debarred, suspended, or otherwise excluded. Effect: The Authority is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Authority implement controls to ensure that entities are not debarred, suspended, or otherwise excluded and that adequate supporting documentation is maintained. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2023-001 PROCUREMENT Federal Program Information: Federal Transit Cluster 20.507 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.318(h) states “the non-federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.” Condition: For all of the contracts selected for testing, documentation could not be located to support that the Authority verified the entity it planned to enter into a covered transaction with was not debarred, suspended, or otherwise excluded. Questioned Costs: Unknown Context: Total federal expenditures for the Federal Transit Cluster were $10,065,940 for the year ended June 30, 2023. Cause: The Authority did not retain adequate documentation showing entities were not debarred, suspended, or otherwise excluded. Effect: The Authority is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Authority implement controls to ensure that entities are not debarred, suspended, or otherwise excluded and that adequate supporting documentation is maintained. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
Program information: Federal Program: Provider Relief Fund (PRF) Assistance Listing Number: 93.498 Federal Agency: Department of Health & Human Services Award Year: PRF Period 5: Funds received January 1, 2022 through June 30, 2022 Criteria or requirement: Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CRF 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award, (Subpart D, Section 200.303), the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Reporting (L) – Special Reporting Under the terms and conditions of the award, Provider Relief Funds (PRF) are subject to 45 CFR section 75.302 (Financial management and standards for financial management systems). The PRF program requires special reporting through the Provider Relief Fund Reporting Portal that contains key line items containing critical information based on the period reported on, which includes the “Other Provider Relief Fund (Including Phase 4) Expenses” (PRF expenses). The Provider Relief Programs: Provider Relief Fund and ARP Rural Payments Frequently Asked Questions states that PRF payments may not be applied to the same expenses and lost revenues that were reported on in prior reporting periods. Condition found, including facts that support the deficiency identified in the finding and information to provide proper perspective for judging the prevalence and consequences of the finding: During our testing over reporting, we observed management did not have effective internal controls in place to ensure PRF expenses reported in the period 5 portal report were not duplicated from the period 4 report, resulting in an overstatement of cumulative PRF expenses reported through the Portal and an overstatement of remaining unreimbursed lost revenues remaining after period 5. Cause and possible asserted effect: Controls were not operating effectively to detect and correct duplicate PRF expenses shown on the portal reporting between period 4 and period 5. Identification of questioned costs and how they were computed: $1,484,296 in duplicate “Other Provider Relief Fund (Including Phase 4) Expenses” shown on the portal reporting on the period 5 portal report. Sample Statistically Valid: The sample was not intended to be, and was not, a statistically valid sample. Repeat finding from prior year: This matter is a repeat of the control deficiency documented in finding 2022-001 in the immediately preceding year audit. Recommendation: We recommend PeaceHealth management enhance their internal control process to ensure the data underlying the portal reporting is appropriately reviewed by an individual other than the preparer to ensure that duplicate information is not reported. Views of Responsible Officials: Despite the duplicated PRF expenses, there remained sufficient lost revenues in excess of PRF payments cumulatively received for Period 1 through 5; therefore, the Corporation has demonstrated it did earn all of the PRF payments received. This matter was isolated to the error in reporting requirements under the Federal grant program for PRF expenses. Management is implementing a process to add additional review steps prior to finalizing future reporting submissions, if required. As of the date of this report, PeaceHealth Networks has reported on all PRF funds received and has no future portal reporting obligations.
U.S. Department of Education Passed Through Kansas State Department of Education Program Name: Education Stabilization Fund Cluster Federal Assistance Listing Numbers: 84.425W, 84.425U, 84.425D Finding 2023-001 SIGNIFICANT DEFICENCY AND MATERIAL NONCOMPLIANCE Internal Controls and Report Submissions Criteria: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 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.” Also pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.302 Financial Management (2 CFR §200.302), “identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received.” Condition: When investigating the controls related to Education Stabilization Fund reporting to the State of Kanas, we became aware that the same individual compiling the information is the same submitting the reports with no secondary review. During our examination of the reports submitted for the fiscal year, the report for the quarter ending June 2023 did not back to financial records by approximately $70,441. Cause: The controls related to reporting for Education Stabilization Fund are non-existent. Effect: There is no internal control related to reporting for Education Stabilization Fund. Questioned Costs: $70,441 Recommendations: The District should have an employee compare the Board Clerk’s supporting documentation and the Education Stabilization Fund spreadsheet report before its submission to the State of Kansas for its accuracy. After the approval by the secondary review employee, the report submitted should be printed, initialed by the secondary reviewer, stapled with the information used to compile the report and combined with all financial records for the fiscal year. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: 93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543. 21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: Yes: 2022-002 Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.
2023-002 SPECIAL TEST – ENROLLMENT REPORTING Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster ALN Numbers: 84.007 – Federal Supplemental Education Opportunity Grants 84.033 – Federal Work-Study Program 84.063 – Federal Pell Grant 84.268 – Federal Direct Loans Award Period: July 1, 2022 to June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Criteria or specific requirement: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the National Student Loan Data System (NSLDS) (OMB No.1845-0035). Institutions are required to design and implement internal control structures to ensure compliance with requirements of assistance programs (2 CFR 200.303). Condition: During our testing, we on instance noted that the effective date of enrollment and enrollment status did not match between NSLDS and the Institutions records. Questioned costs: None Context: A statistically valid sample of 40 students was selected for testing of the institutional enrollment records for comparison to NSLDS records, as required by the Department of Education. One of the students selected for testing had an enrollment status change date improperly reported to NSLDS. Cause: The District inadvertently entered the improper data in the internal record keeping systems and transmitted this date to NSLDS. Effect: The improper documentation over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend the District design controls to ensure an adequate documentation of control and review of student records to determine they are appropriately reflecting the proper status. Views of responsible officials: There is no disagreement with the audit finding.
2023-002 SPECIAL TEST – ENROLLMENT REPORTING Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster ALN Numbers: 84.007 – Federal Supplemental Education Opportunity Grants 84.033 – Federal Work-Study Program 84.063 – Federal Pell Grant 84.268 – Federal Direct Loans Award Period: July 1, 2022 to June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Criteria or specific requirement: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the National Student Loan Data System (NSLDS) (OMB No.1845-0035). Institutions are required to design and implement internal control structures to ensure compliance with requirements of assistance programs (2 CFR 200.303). Condition: During our testing, we on instance noted that the effective date of enrollment and enrollment status did not match between NSLDS and the Institutions records. Questioned costs: None Context: A statistically valid sample of 40 students was selected for testing of the institutional enrollment records for comparison to NSLDS records, as required by the Department of Education. One of the students selected for testing had an enrollment status change date improperly reported to NSLDS. Cause: The District inadvertently entered the improper data in the internal record keeping systems and transmitted this date to NSLDS. Effect: The improper documentation over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend the District design controls to ensure an adequate documentation of control and review of student records to determine they are appropriately reflecting the proper status. Views of responsible officials: There is no disagreement with the audit finding.
2023-002 SPECIAL TEST – ENROLLMENT REPORTING Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster ALN Numbers: 84.007 – Federal Supplemental Education Opportunity Grants 84.033 – Federal Work-Study Program 84.063 – Federal Pell Grant 84.268 – Federal Direct Loans Award Period: July 1, 2022 to June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Criteria or specific requirement: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the National Student Loan Data System (NSLDS) (OMB No.1845-0035). Institutions are required to design and implement internal control structures to ensure compliance with requirements of assistance programs (2 CFR 200.303). Condition: During our testing, we on instance noted that the effective date of enrollment and enrollment status did not match between NSLDS and the Institutions records. Questioned costs: None Context: A statistically valid sample of 40 students was selected for testing of the institutional enrollment records for comparison to NSLDS records, as required by the Department of Education. One of the students selected for testing had an enrollment status change date improperly reported to NSLDS. Cause: The District inadvertently entered the improper data in the internal record keeping systems and transmitted this date to NSLDS. Effect: The improper documentation over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend the District design controls to ensure an adequate documentation of control and review of student records to determine they are appropriately reflecting the proper status. Views of responsible officials: There is no disagreement with the audit finding.