Reference Number: 2023-021 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Low-Income Home Energy Assistance, COVID-19 – Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2101VTLIEA (10/1/2020 – 9/30/2022), 2101VTLWC5 (5/28/2021 – 9/30/2023), 2101VTLWC6 (5/28/2021 – 9/30/2023), 2101VTE5C6 (3/11/2021 – 9/30/2022), 2301VTLIEA (10/1/2022 – 9/30/2024), 2301VTLIEE (10/1/2022 – 9/30/2024), 2301VTLIEI (10/1/2022 – 9/30/2024) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not report subaward information to FSRS in accordance with FFATA reporting requirements. Context: Eleven subawards were selected for testing which included seven initial subawards and four amendments. We noted the following exceptions: • Two of seven initial subawards were not reported to FSRS until after auditors requested samples for testing. • One of four amendments was not reported to FSRS. • Two of seven initial subawards were not reported to FSRS timely. The subawards were reported 28 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Agency’s internal controls were not operating sufficiently to ensure that subawards were reported to FSRS in accordance with FFATA reporting requirements. Two of the subaward exceptions were not reported to FSRS until after auditors had selected them for testing. In addition, the Agency noted that for Weatherization subawards, their internal procedure is to amend the total subaward amount at the end of the grant period, but the Agency does not report these amendments to FSRS. Effect: The program was not in compliance with FFATA reporting requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance or amendment, in accordance with FFATA requirements. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-022 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Low-Income Home Energy Assistance, COVID-19 – Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2101VTLWC6 (5/28/2021 – 9/30/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The SF-425 Federal Financial Report is due annually no later than December 31st via the Payment Management System (PMS). This report concerns the obligation balances for each federal fiscal year and for each type of Low-Income Home Energy Assistance Program (LIHEAP) grant award (block grants, reallotment, emergency contingency, Leveraging, and REACH). A report is required from those recipients expending up to 5 percent of funds under section 2605(b)(16) (42 USC 8624(b)(16)). Low Income Household Water Assistance Program (LIHWAP) recipients must track, account for, and report on, the LIHWAP funding separate from the rest of their funding. The Office of Community Services provided guidance to LIHWAP grant recipients of an extension to the annual report deadline for reports for the period ending September 30, 2022. The due date for this report was extended to no later than January 30, 2023. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not submit the annual SF-425 Federal Financial Report for the 2021 LIHWAP award by the January 30, 2023 extended due date. Context: Five annual SF-425 Federal Financial Reports were selected for testing, and we noted that one of five reports was not submitted timely. The 2021 LIHWAP annual report for the period ending September 30, 2022 was due no later than January 30, 2023 but was not submitted until February 24, 2023, or 25 days late. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: Procedures and controls were insufficient to ensure that annual Federal Financial reports were filed timely. Effect: Untimely filing of annual reports could impact the federal agency’s ability to monitor the program. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required annual reports are filed timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-022 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Low-Income Home Energy Assistance, COVID-19 – Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2101VTLWC6 (5/28/2021 – 9/30/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The SF-425 Federal Financial Report is due annually no later than December 31st via the Payment Management System (PMS). This report concerns the obligation balances for each federal fiscal year and for each type of Low-Income Home Energy Assistance Program (LIHEAP) grant award (block grants, reallotment, emergency contingency, Leveraging, and REACH). A report is required from those recipients expending up to 5 percent of funds under section 2605(b)(16) (42 USC 8624(b)(16)). Low Income Household Water Assistance Program (LIHWAP) recipients must track, account for, and report on, the LIHWAP funding separate from the rest of their funding. The Office of Community Services provided guidance to LIHWAP grant recipients of an extension to the annual report deadline for reports for the period ending September 30, 2022. The due date for this report was extended to no later than January 30, 2023. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not submit the annual SF-425 Federal Financial Report for the 2021 LIHWAP award by the January 30, 2023 extended due date. Context: Five annual SF-425 Federal Financial Reports were selected for testing, and we noted that one of five reports was not submitted timely. The 2021 LIHWAP annual report for the period ending September 30, 2022 was due no later than January 30, 2023 but was not submitted until February 24, 2023, or 25 days late. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: Procedures and controls were insufficient to ensure that annual Federal Financial reports were filed timely. Effect: Untimely filing of annual reports could impact the federal agency’s ability to monitor the program. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required annual reports are filed timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-023 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Low-Income Home Energy Assistance COVID-19 – Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2101VTLIEA (10/1/2020 – 9/30/2022), 2101VTLWC5 (5/28/2021 – 9/30/2023), 2101VTLWC6 (5/28/2021 – 9/30/2023), 2101VTE5C6 (3/11/2021 – 9/30/2022), 2301VTLIEA (10/1/2022 – 9/30/2024), 2301VTLIEE (10/1/2022 – 9/30/2024), 2301VTLIEI (10/1/2022 – 9/30/2024) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: None. The error did not result in an unallowable federal interest liability. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-023 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Low-Income Home Energy Assistance COVID-19 – Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2101VTLIEA (10/1/2020 – 9/30/2022), 2101VTLWC5 (5/28/2021 – 9/30/2023), 2101VTLWC6 (5/28/2021 – 9/30/2023), 2101VTE5C6 (3/11/2021 – 9/30/2022), 2301VTLIEA (10/1/2022 – 9/30/2024), 2301VTLIEE (10/1/2022 – 9/30/2024), 2301VTLIEI (10/1/2022 – 9/30/2024) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: None. The error did not result in an unallowable federal interest liability. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-024 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Assistance Listing Number: 93.391 Award Number and Year: NH75OT000034 (6/1/2021 – 5/31/2024) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: Subawards were not reported timely to FSRS in accordance with FFATA requirements. Context: Four of eight subawards selected for testing were not reported to FSRS in accordance with FFATA requirements. Specifically, we noted the following exceptions: • Three of eight subawards were not reported to FSRS until after auditors requested samples for testing. The subawards were issued between 12/31/2021 and 4/1/2022 but were not reported to FSRS until 10/31/2023. • One of eight subawards was not reported to FSRS timely. The subaward should have been reported to FSRS by 3/31/2022, but it was not reported until 4/22/2022, or 22 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Agency’s procedures were not sufficient to ensure that subawards were reported to FSRS in accordance with FFATA reporting requirements. Internal controls did not detect or prevent the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance or amendment, in accordance with FFATA requirements. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-025 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Assistance Listing Number: 93.391 Award Number and Year: NH75OT000034 (6/1/2021 – 5/31/2024) Compliance Requirement: Procurement Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 200.324(a), the non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) was unable to provide documentation that a cost analysis was performed for a procurement action in excess of the Simplified Acquisition Threshold. Context: For one of seven contracts selected for testing, the Agency was unable to provide documentation that a cost analysis was performed. Cause: The Agency’s procedures were not sufficient to ensure that a cost analysis was performed for all procurement actions in excess of the Simplified Acquisition Threshold. Internal controls did not detect or prevent the error. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Effect: Failure to perform a cost analysis could result in the Agency procuring goods or services that are not cost-effective nor in the best interest of the Agency or the program. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that it performs a cost analysis for all procurement actions in excess of the Simplified Acquisition Threshold, including contract modifications. We further recommend that cost analysis documentation is maintained and readily available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-026 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Adoption Assistance Assistance Listing Number: 93.659 Award Number and Year: 2201VTADPT (7/1/2022 – 9/30/2022), 2301VTADPT (10/1/2022 – 6/30/2023) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 42 USC 673, each State shall enter into adoption assistance agreements (as defined in section 675(3)) with the adoptive parents of children with special needs in accordance with its approved State plan. Adoption assistance subsidy payments may be paid on behalf of a child only if they are determined to meet the program’s eligibility requirements: • Categorical Eligibility – The child meets the definition of an “applicable or non-applicable child” and meets the corresponding eligibility requirements per 42 USC 673. • The child was determined by the Title IV-E agency as someone who cannot or should not be returned to the home of his or her parents (42 USC 673(c)(1)). • The child was determined by the Title IV-E agency to be a child with special needs. • The Title IV-E agency has made reasonable efforts to place the child for adoption without a subsidy. • The agreement for the subsidy was signed and was in effect before the final decree of adoption and contains information concerning the nature of services; the amount and duration of the subsidy; the child’s eligibility for Title XX services and Title XIX Medicaid; and covers the child should he/she move out of state with the adoptive family (42 USC 675(3)). • The prospective adoptive parent(s) must satisfactorily have met a criminal records check, including a fingerprint-based check (42 USC 671(a)(20)(A)). • The prospective adoptive parent(s) and any other adult living in the home who has resided in the provider home in the preceding five years must satisfactorily have met a child abuse and neglect registry check. • Once a child is determined eligible to receive Title IV-E adoption assistance, he or she remains eligible and the subsidy continues until the age of 18 (or 21 if the Title IV-E agency determines that the child has a mental or physical disability which warrants the continuation of assistance). Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or Section III – Findings and Questioned Costs – Major Federal Programs (Continued) the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) was unable to provide documentation that participants receiving benefits under the program met eligibility requirements. Context: For two of forty participants selected for testing, the Agency was unable to provide documentation that the children were eligible for the program. Specifically, we noted the following exceptions: • For one of forty participants, documentation could not be provided that the child was eligible for the program. • For one of forty participants, the child turned eighteen on 3/26/2022 but remained in the program until 6/10/2023. Documentation could not be provided for the continuation of benefits after the child’s 18th birthday. Cause: The Agency’s procedures were not sufficient to ensure that documentation was maintained that participants were eligible to participate in the program. Internal controls did not detect or prevent the errors. Effect Subsidy payments were made on behalf of children that were not eligible for the program. Questioned costs: $16,362, the federal share of subsidy payments made during FY 2023 for ineligible participants. Recommendation: We recommend that the Agency review and enhance procedures and controls to ensure that eligibility documentation is maintained for all program participants and that it is readily available for audit. We further recommend that the Agency review and enhance procedures and controls for children turning eighteen to ensure that benefits are terminated on a timely basis or that a determination is made and documented if the child has a mental or physical disability which warrants the continuation of assistance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-027 Prior Year Finding: 2022-035 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services (Agency) Federal Program: Children’s Health Insurance Program (CHIP) Assistance Listing Number: 93.767 Award Number and Year: 2205VT5021 (10/1/2021 – 9/30/2023) 2305VT5021 (10/1/2022 – 9/30/2024) 2305VT3002 (10/1/2022 – 9/30/2024) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States verify the financial and nonfinancial factors of eligibility by checking electronic data sources in accordance with federal requirements at 42 CFR 457.380 and state requirements (as documented in the CHIP state plan, verification plan, and eligibility manual). The state is required (as described at 42 CFR 457.965) to maintain facts in the case file to support the eligibility determination. The State must provide each applicant or enrollee with timely and adequate written notice of any decision affecting his or her eligibility, including an approval, denial or termination, or suspension of eligibility, consistent with sections 457.315, 457.348, and 457.350. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) terminated benefits for a CHIP participant without providing notification to the participant. Context: For one of sixty CHIP participants selected for testing, the Agency performed a recertification on 6/9/2023 to determine if the participant should be moved to the Medicaid program. On 6/30/2023, while the income verification was pending, the participant was removed from CHIP benefits without notification. Cause: The Agency did not adequately follow procedures regarding eligibility in accordance with federal program requirements. Internal controls did not detect or prevent the error. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Effect A participant’s benefits were terminated without proper notification. Questioned costs: Undetermined. Recommendation: We recommend that the Agency review and enhance procedures and controls for CHIP beneficiary eligibility determinations to ensure that it provides adequate written notice of any decision affecting a participant’s eligibility, including an approval, denial or termination, or suspension of eligibility, consistent with program regulations. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-028 Prior Year Finding: 2022-036 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Children’s Health Insurance Program (CHIP) Assistance Listing Number: 93.767 Award Number and Year: 2205VT5021 (10/1/2021 – 9/30/2023) 2305VT5021 (10/1/2022 – 9/30/2024) 2305VT3002 (10/1/2022 – 9/30/2024) Compliance Requirement: Special Tests and Provisions - Provider Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: In order to receive CHIP payments, CHIP providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the CHIP program (42 CFR 457.900); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the state (42 CFR 457.990(a), cross referencing 455.107). CHIP managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Control: Per 2 CFR section 200.303(a), the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not maintain documentation to support provider eligibility to participate in the CHIP program. Documentation of the providers’ tax standing was not maintained in the Provider Management Module (PMM). Context: For five of sixty providers selected for testing, documentation was incomplete to support that the providers were in good tax standing. The provider eligibility requirement is administered by a 3rd-party that determines and documents each provider’s eligibility with the Agency’s requirements. For the exceptions noted, the provider files in PMM did not contain a copy of the tax standing letter. The providers’ tax standing was validated verbally or by email with the Vermont Tax Department and the PMM system was documented indicating the providers had been verified to be in good standing; however, the tax standing letter was not uploaded to the PMM system. As part of a prior year Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Corrective Action Plan (CAP), a process has been implemented to require letters of good standing be uploaded to the provider file in PMM. These tax case verifications occurred prior to the implementation of the CAP. Cause: The Agency did not adequately follow procedures regarding documentation of CHIP provider eligibility in accordance with federal program requirements. Although the Agency had begun implementation of its corrective action plan from a prior year audit, the plan has not been completed. Effect: The Agency was unable to support provider eligibility or consistent application of their internal control process. Failure to maintain complete provider files could allow program payments to be made to an ineligible provider. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and controls to ensure that documentation is maintained in accordance with the federal program requirements. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-029 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 2305VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Special Tests and Provisions – ADP Risk Analysis and System Security Review Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 45 CFR 95.621, the State Medicaid Agency (SMA) must establish and maintain a program for conducting periodic risk analyses to ensure that appropriate and cost-effective safeguards are incorporated into new and existing systems. SMAs must perform risk analyses whenever significant system changes occur. SMAs shall review the ADP system security installations involved in the administration of U.S. Department of Health and Human Services (HHS) programs on a biennial basis. At a minimum, the reviews shall include an evaluation of physical and data security operating procedures, and personnel practices. The SMA shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for HHS on-site reviews. If risks or deficiencies are noted, the SMA must take corrective action to resolve the issues. Control: Per 2 CFR section 200.303(a), the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not develop a corrective action plan to address risks and deficiencies noted in the security controls assessment performed over its ACCESS system. Context: The Agency entered into a consulting agreement with JANUS Associates (JANUS) to perform a security controls assessment of its ACCESS system. On October 13, 2022, JANUS issued its final report which identified numerous control risks and deficiencies. After receipt of the report, the Agency did not develop or implement a corrective action plan to mitigate the risks nor resolve the deficiencies noted. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Agency did not allocate resources to address the risks and deficiencies noted in the JANUS report. Effect: Failure to develop and implement a corrective action plan could leave the ACCESS system vulnerable to potential security risks. The Agency is unable to provide assurance that the system is adequately controlled nor that it properly safeguards sensitive Medicaid data. Questioned costs: Undetermined. Recommendation: The Agency should evaluate the risks identified in the JANUS report and develop a prioritized corrective action plan to mitigate and resolve these risks. The Agency should implement the corrective action plan as soon as possible to provide assurance that the system is adequately controlled and properly safeguards sensitive Medicaid data. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-029 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 2305VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Special Tests and Provisions – ADP Risk Analysis and System Security Review Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 45 CFR 95.621, the State Medicaid Agency (SMA) must establish and maintain a program for conducting periodic risk analyses to ensure that appropriate and cost-effective safeguards are incorporated into new and existing systems. SMAs must perform risk analyses whenever significant system changes occur. SMAs shall review the ADP system security installations involved in the administration of U.S. Department of Health and Human Services (HHS) programs on a biennial basis. At a minimum, the reviews shall include an evaluation of physical and data security operating procedures, and personnel practices. The SMA shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for HHS on-site reviews. If risks or deficiencies are noted, the SMA must take corrective action to resolve the issues. Control: Per 2 CFR section 200.303(a), the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not develop a corrective action plan to address risks and deficiencies noted in the security controls assessment performed over its ACCESS system. Context: The Agency entered into a consulting agreement with JANUS Associates (JANUS) to perform a security controls assessment of its ACCESS system. On October 13, 2022, JANUS issued its final report which identified numerous control risks and deficiencies. After receipt of the report, the Agency did not develop or implement a corrective action plan to mitigate the risks nor resolve the deficiencies noted. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Agency did not allocate resources to address the risks and deficiencies noted in the JANUS report. Effect: Failure to develop and implement a corrective action plan could leave the ACCESS system vulnerable to potential security risks. The Agency is unable to provide assurance that the system is adequately controlled nor that it properly safeguards sensitive Medicaid data. Questioned costs: Undetermined. Recommendation: The Agency should evaluate the risks identified in the JANUS report and develop a prioritized corrective action plan to mitigate and resolve these risks. The Agency should implement the corrective action plan as soon as possible to provide assurance that the system is adequately controlled and properly safeguards sensitive Medicaid data. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-029 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 2305VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Special Tests and Provisions – ADP Risk Analysis and System Security Review Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 45 CFR 95.621, the State Medicaid Agency (SMA) must establish and maintain a program for conducting periodic risk analyses to ensure that appropriate and cost-effective safeguards are incorporated into new and existing systems. SMAs must perform risk analyses whenever significant system changes occur. SMAs shall review the ADP system security installations involved in the administration of U.S. Department of Health and Human Services (HHS) programs on a biennial basis. At a minimum, the reviews shall include an evaluation of physical and data security operating procedures, and personnel practices. The SMA shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for HHS on-site reviews. If risks or deficiencies are noted, the SMA must take corrective action to resolve the issues. Control: Per 2 CFR section 200.303(a), the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not develop a corrective action plan to address risks and deficiencies noted in the security controls assessment performed over its ACCESS system. Context: The Agency entered into a consulting agreement with JANUS Associates (JANUS) to perform a security controls assessment of its ACCESS system. On October 13, 2022, JANUS issued its final report which identified numerous control risks and deficiencies. After receipt of the report, the Agency did not develop or implement a corrective action plan to mitigate the risks nor resolve the deficiencies noted. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Agency did not allocate resources to address the risks and deficiencies noted in the JANUS report. Effect: Failure to develop and implement a corrective action plan could leave the ACCESS system vulnerable to potential security risks. The Agency is unable to provide assurance that the system is adequately controlled nor that it properly safeguards sensitive Medicaid data. Questioned costs: Undetermined. Recommendation: The Agency should evaluate the risks identified in the JANUS report and develop a prioritized corrective action plan to mitigate and resolve these risks. The Agency should implement the corrective action plan as soon as possible to provide assurance that the system is adequately controlled and properly safeguards sensitive Medicaid data. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-029 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 2305VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Special Tests and Provisions – ADP Risk Analysis and System Security Review Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 45 CFR 95.621, the State Medicaid Agency (SMA) must establish and maintain a program for conducting periodic risk analyses to ensure that appropriate and cost-effective safeguards are incorporated into new and existing systems. SMAs must perform risk analyses whenever significant system changes occur. SMAs shall review the ADP system security installations involved in the administration of U.S. Department of Health and Human Services (HHS) programs on a biennial basis. At a minimum, the reviews shall include an evaluation of physical and data security operating procedures, and personnel practices. The SMA shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for HHS on-site reviews. If risks or deficiencies are noted, the SMA must take corrective action to resolve the issues. Control: Per 2 CFR section 200.303(a), the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not develop a corrective action plan to address risks and deficiencies noted in the security controls assessment performed over its ACCESS system. Context: The Agency entered into a consulting agreement with JANUS Associates (JANUS) to perform a security controls assessment of its ACCESS system. On October 13, 2022, JANUS issued its final report which identified numerous control risks and deficiencies. After receipt of the report, the Agency did not develop or implement a corrective action plan to mitigate the risks nor resolve the deficiencies noted. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Agency did not allocate resources to address the risks and deficiencies noted in the JANUS report. Effect: Failure to develop and implement a corrective action plan could leave the ACCESS system vulnerable to potential security risks. The Agency is unable to provide assurance that the system is adequately controlled nor that it properly safeguards sensitive Medicaid data. Questioned costs: Undetermined. Recommendation: The Agency should evaluate the risks identified in the JANUS report and develop a prioritized corrective action plan to mitigate and resolve these risks. The Agency should implement the corrective action plan as soon as possible to provide assurance that the system is adequately controlled and properly safeguards sensitive Medicaid data. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-030 Prior Year Finding: 2022-038 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 2305VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: Subawards were not reported timely to FSRS in accordance with FFATA requirements. Context: The Agency of Human Services (Agency) Internal Audit Group (IAG) reports subaward information in FSRS for its various departments using subaward information provided by the departments. Nine subawards totaling $8,406,069 were selected for testing, including eight initial subawards and one subaward amendment. The following exceptions were noted: • One of eight initial subawards was not reported timely. The subaward should have been reported by October 31, 2022, but it was not reported until December 26, 2022, or 56 days late. • One of one subaward amendments was not reported timely. It should have been reported by September 30, 2022, but it was not reported until December 26, 2022, or 87 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE As part of a prior year Corrective Action Plan (CAP), the Agency implemented a process to report required subawards to FSRS timely. The exceptions noted occurred prior to the implementation of the CAP. Cause: The individual departments did not provide the IAG with complete subaward information on a timely basis which caused errors and omissions in subaward reporting to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency complete implementation of its prior year CAP to ensure that all required subawards and subaward modifications are reported timely to FSRS in accordance with FFATA requirements. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-030 Prior Year Finding: 2022-038 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 2305VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: Subawards were not reported timely to FSRS in accordance with FFATA requirements. Context: The Agency of Human Services (Agency) Internal Audit Group (IAG) reports subaward information in FSRS for its various departments using subaward information provided by the departments. Nine subawards totaling $8,406,069 were selected for testing, including eight initial subawards and one subaward amendment. The following exceptions were noted: • One of eight initial subawards was not reported timely. The subaward should have been reported by October 31, 2022, but it was not reported until December 26, 2022, or 56 days late. • One of one subaward amendments was not reported timely. It should have been reported by September 30, 2022, but it was not reported until December 26, 2022, or 87 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE As part of a prior year Corrective Action Plan (CAP), the Agency implemented a process to report required subawards to FSRS timely. The exceptions noted occurred prior to the implementation of the CAP. Cause: The individual departments did not provide the IAG with complete subaward information on a timely basis which caused errors and omissions in subaward reporting to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency complete implementation of its prior year CAP to ensure that all required subawards and subaward modifications are reported timely to FSRS in accordance with FFATA requirements. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-030 Prior Year Finding: 2022-038 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 2305VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: Subawards were not reported timely to FSRS in accordance with FFATA requirements. Context: The Agency of Human Services (Agency) Internal Audit Group (IAG) reports subaward information in FSRS for its various departments using subaward information provided by the departments. Nine subawards totaling $8,406,069 were selected for testing, including eight initial subawards and one subaward amendment. The following exceptions were noted: • One of eight initial subawards was not reported timely. The subaward should have been reported by October 31, 2022, but it was not reported until December 26, 2022, or 56 days late. • One of one subaward amendments was not reported timely. It should have been reported by September 30, 2022, but it was not reported until December 26, 2022, or 87 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE As part of a prior year Corrective Action Plan (CAP), the Agency implemented a process to report required subawards to FSRS timely. The exceptions noted occurred prior to the implementation of the CAP. Cause: The individual departments did not provide the IAG with complete subaward information on a timely basis which caused errors and omissions in subaward reporting to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency complete implementation of its prior year CAP to ensure that all required subawards and subaward modifications are reported timely to FSRS in accordance with FFATA requirements. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-030 Prior Year Finding: 2022-038 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 2305VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: Subawards were not reported timely to FSRS in accordance with FFATA requirements. Context: The Agency of Human Services (Agency) Internal Audit Group (IAG) reports subaward information in FSRS for its various departments using subaward information provided by the departments. Nine subawards totaling $8,406,069 were selected for testing, including eight initial subawards and one subaward amendment. The following exceptions were noted: • One of eight initial subawards was not reported timely. The subaward should have been reported by October 31, 2022, but it was not reported until December 26, 2022, or 56 days late. • One of one subaward amendments was not reported timely. It should have been reported by September 30, 2022, but it was not reported until December 26, 2022, or 87 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE As part of a prior year Corrective Action Plan (CAP), the Agency implemented a process to report required subawards to FSRS timely. The exceptions noted occurred prior to the implementation of the CAP. Cause: The individual departments did not provide the IAG with complete subaward information on a timely basis which caused errors and omissions in subaward reporting to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency complete implementation of its prior year CAP to ensure that all required subawards and subaward modifications are reported timely to FSRS in accordance with FFATA requirements. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-031 Prior Year Finding: 2022-037 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR part 442). The standards may be modified in the State Plan. The Medicaid Provider Enrollment Compendium (MPEC) requires that State Medicaid Agencies perform screening of providers based upon their risk level. Screening includes verifications of licenses and compliance with all federal and state regulations of the program. Control: Per 2 CFR section 200.303(a), the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not maintain documentation to support providers’ compliance with the prescribed health and safety standards. The Agency requires that providers complete a health and safety agreement in which they attest to compliance with the Agency’s health and safety requirements. The provider eligibility and health and safety requirements are administered by a 3rd-party that determines and documents providers’ eligibility with the Agency’s requirements in the provider management module (PMM). Health and safety documentation was not consistently maintained in provider files and compliance could not be verified. Context: Sixty samples were selected for testing and health and safety standards could not be verified for the following: 1. For one of sixty providers, payments were made without current license information maintained in the PMM. As part of a prior year audit’s corrective action plan, the Agency attempted to obtain Section III – Findings and Questioned Costs – Major Federal Programs (Continued) an updated license for the provider and when it was determined that the license had expired, the provider was terminated. 2. For two of sixty providers, documentation was incomplete to support that the providers were in good tax standing. The providers’ tax standing was validated verbally or by email with the Vermont Tax Department and the PMM system was documented indicating the providers had been verified to be in good standing; however, the tax standing letter was not uploaded to the PMM system. As part of a prior year Corrective Action Plan (CAP), a process has been implemented to require letters of good standing be uploaded to the provider file in PMM. These tax case verifications occurred prior to the implementation of the CAP. Cause: The Agency’s 3rd-Party provider did not consistently maintain current license and verification of tax standing documentation in the PMM. Although the Agency had begun implementation of its corrective action plan from a prior year audit, the plan has not been completed. Effect: Failure to verify and document compliance with health and safety standards could allow ineligible providers to perform services under the Medicaid program. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and controls to ensure that documentation is maintained in accordance with program requirements and that all providers are compliant with required health and safety standards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-031 Prior Year Finding: 2022-037 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR part 442). The standards may be modified in the State Plan. The Medicaid Provider Enrollment Compendium (MPEC) requires that State Medicaid Agencies perform screening of providers based upon their risk level. Screening includes verifications of licenses and compliance with all federal and state regulations of the program. Control: Per 2 CFR section 200.303(a), the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not maintain documentation to support providers’ compliance with the prescribed health and safety standards. The Agency requires that providers complete a health and safety agreement in which they attest to compliance with the Agency’s health and safety requirements. The provider eligibility and health and safety requirements are administered by a 3rd-party that determines and documents providers’ eligibility with the Agency’s requirements in the provider management module (PMM). Health and safety documentation was not consistently maintained in provider files and compliance could not be verified. Context: Sixty samples were selected for testing and health and safety standards could not be verified for the following: 1. For one of sixty providers, payments were made without current license information maintained in the PMM. As part of a prior year audit’s corrective action plan, the Agency attempted to obtain Section III – Findings and Questioned Costs – Major Federal Programs (Continued) an updated license for the provider and when it was determined that the license had expired, the provider was terminated. 2. For two of sixty providers, documentation was incomplete to support that the providers were in good tax standing. The providers’ tax standing was validated verbally or by email with the Vermont Tax Department and the PMM system was documented indicating the providers had been verified to be in good standing; however, the tax standing letter was not uploaded to the PMM system. As part of a prior year Corrective Action Plan (CAP), a process has been implemented to require letters of good standing be uploaded to the provider file in PMM. These tax case verifications occurred prior to the implementation of the CAP. Cause: The Agency’s 3rd-Party provider did not consistently maintain current license and verification of tax standing documentation in the PMM. Although the Agency had begun implementation of its corrective action plan from a prior year audit, the plan has not been completed. Effect: Failure to verify and document compliance with health and safety standards could allow ineligible providers to perform services under the Medicaid program. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and controls to ensure that documentation is maintained in accordance with program requirements and that all providers are compliant with required health and safety standards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-031 Prior Year Finding: 2022-037 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR part 442). The standards may be modified in the State Plan. The Medicaid Provider Enrollment Compendium (MPEC) requires that State Medicaid Agencies perform screening of providers based upon their risk level. Screening includes verifications of licenses and compliance with all federal and state regulations of the program. Control: Per 2 CFR section 200.303(a), the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not maintain documentation to support providers’ compliance with the prescribed health and safety standards. The Agency requires that providers complete a health and safety agreement in which they attest to compliance with the Agency’s health and safety requirements. The provider eligibility and health and safety requirements are administered by a 3rd-party that determines and documents providers’ eligibility with the Agency’s requirements in the provider management module (PMM). Health and safety documentation was not consistently maintained in provider files and compliance could not be verified. Context: Sixty samples were selected for testing and health and safety standards could not be verified for the following: 1. For one of sixty providers, payments were made without current license information maintained in the PMM. As part of a prior year audit’s corrective action plan, the Agency attempted to obtain Section III – Findings and Questioned Costs – Major Federal Programs (Continued) an updated license for the provider and when it was determined that the license had expired, the provider was terminated. 2. For two of sixty providers, documentation was incomplete to support that the providers were in good tax standing. The providers’ tax standing was validated verbally or by email with the Vermont Tax Department and the PMM system was documented indicating the providers had been verified to be in good standing; however, the tax standing letter was not uploaded to the PMM system. As part of a prior year Corrective Action Plan (CAP), a process has been implemented to require letters of good standing be uploaded to the provider file in PMM. These tax case verifications occurred prior to the implementation of the CAP. Cause: The Agency’s 3rd-Party provider did not consistently maintain current license and verification of tax standing documentation in the PMM. Although the Agency had begun implementation of its corrective action plan from a prior year audit, the plan has not been completed. Effect: Failure to verify and document compliance with health and safety standards could allow ineligible providers to perform services under the Medicaid program. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and controls to ensure that documentation is maintained in accordance with program requirements and that all providers are compliant with required health and safety standards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-031 Prior Year Finding: 2022-037 Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR part 442). The standards may be modified in the State Plan. The Medicaid Provider Enrollment Compendium (MPEC) requires that State Medicaid Agencies perform screening of providers based upon their risk level. Screening includes verifications of licenses and compliance with all federal and state regulations of the program. Control: Per 2 CFR section 200.303(a), the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not maintain documentation to support providers’ compliance with the prescribed health and safety standards. The Agency requires that providers complete a health and safety agreement in which they attest to compliance with the Agency’s health and safety requirements. The provider eligibility and health and safety requirements are administered by a 3rd-party that determines and documents providers’ eligibility with the Agency’s requirements in the provider management module (PMM). Health and safety documentation was not consistently maintained in provider files and compliance could not be verified. Context: Sixty samples were selected for testing and health and safety standards could not be verified for the following: 1. For one of sixty providers, payments were made without current license information maintained in the PMM. As part of a prior year audit’s corrective action plan, the Agency attempted to obtain Section III – Findings and Questioned Costs – Major Federal Programs (Continued) an updated license for the provider and when it was determined that the license had expired, the provider was terminated. 2. For two of sixty providers, documentation was incomplete to support that the providers were in good tax standing. The providers’ tax standing was validated verbally or by email with the Vermont Tax Department and the PMM system was documented indicating the providers had been verified to be in good standing; however, the tax standing letter was not uploaded to the PMM system. As part of a prior year Corrective Action Plan (CAP), a process has been implemented to require letters of good standing be uploaded to the provider file in PMM. These tax case verifications occurred prior to the implementation of the CAP. Cause: The Agency’s 3rd-Party provider did not consistently maintain current license and verification of tax standing documentation in the PMM. Although the Agency had begun implementation of its corrective action plan from a prior year audit, the plan has not been completed. Effect: Failure to verify and document compliance with health and safety standards could allow ineligible providers to perform services under the Medicaid program. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and controls to ensure that documentation is maintained in accordance with program requirements and that all providers are compliant with required health and safety standards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-032 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: $113, the amount of the federal interest liability claimed in error. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-032 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: $113, the amount of the federal interest liability claimed in error. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-032 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: $113, the amount of the federal interest liability claimed in error. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-032 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Award Number and Year: 2205VT5MAP (10/1/2021 – 9/30/2022) 205VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated the federal interest liability for the program on the CMIA Annual Report. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Context: The annual interest rate is established by the U.S. Treasury and published on its CMIA website. Finance is the responsible State entity for calculation of interest and completion of the CMIA Annual Report. When it calculated interest for the program in preparation of the FY2023 Annual Report, Finance did not apply the correct interest rate. Cause: Finance’s CMIA Annual Report procedures were not sufficient to ensure that it used the interest rate established by the U.S. Treasury when it calculated interest liabilities for the program. Internal controls did not prevent or detect the error. Effect: Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: $113, the amount of the federal interest liability claimed in error. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over cash management to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-033 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Block Grants for Prevention and Treatment of Substance Abuse; COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI084611 (10/1/2021 – 9/30/2024), B08TI083971 (9/1/2021 – 9/30/2025), B08TI083516 (3/15/2021 – 3/14/2023), B08TI083480 (10/1/2020 – 9/30/2022), B08TI084675 (10/1/2021 – 9/30/2023) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not report subaward information to FSRS in accordance with FFATA reporting requirements. Context: Thirteen subawards were selected for testing which included eight initial subawards and five amendments. We noted the following exceptions: • One of five amendments was not reported to FSRS. • Two of eight initial subawards were not reported to FSRS timely. The subawards were reported 22 and 29 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Agency’s procedures were not sufficient to ensure that all subawards and subaward amendments were reported timely to FSRS. Internal controls did not prevent or detect the errors. Effect: The program was not in compliance with FFATA reporting requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards and subaward amendments are reported timely to FSRS no later than the end of the month following the month of issuance, in accordance with FFATA requirements. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-033 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services Federal Program: Block Grants for Prevention and Treatment of Substance Abuse; COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI084611 (10/1/2021 – 9/30/2024), B08TI083971 (9/1/2021 – 9/30/2025), B08TI083516 (3/15/2021 – 3/14/2023), B08TI083480 (10/1/2020 – 9/30/2022), B08TI084675 (10/1/2021 – 9/30/2023) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Human Services (Agency) did not report subaward information to FSRS in accordance with FFATA reporting requirements. Context: Thirteen subawards were selected for testing which included eight initial subawards and five amendments. We noted the following exceptions: • One of five amendments was not reported to FSRS. • Two of eight initial subawards were not reported to FSRS timely. The subawards were reported 22 and 29 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Agency’s procedures were not sufficient to ensure that all subawards and subaward amendments were reported timely to FSRS. Internal controls did not prevent or detect the errors. Effect: The program was not in compliance with FFATA reporting requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards and subaward amendments are reported timely to FSRS no later than the end of the month following the month of issuance, in accordance with FFATA requirements. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-034 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security State Agency: Department of Public Safety Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: FEMA-4445-DR-VT (2019), FEMA-4474-DR-VT (2020), FEMA-4532-DR-VT (2020), FEMA-4621-DR-VT (2021) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: The Department of Public Safety (Department) was not in compliance with FSRS reporting requirements. Subawards and subaward modifications were not reported timely or accurately to FSRS. Context: Forty-four subawards were selected for testing which included eight subawards and thirty-six amendments. Of the forty-four subawards selected, only one subaward, in the amount of $58,542, was reported timely and accurately. Specifically, the following exceptions were noted: • 38 of 44 subawards were not reported to FSRS, totaling $17,901,902. • 1 of 44 subawards was not reported timely to FSRS, totaling $9,609,432. • 4 of 44 subawards reported an incorrect amount to FSRS, with a net reported variance of $155,342. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s procedures were not sufficient to ensure that subawards were reported timely or accurately to FSRS. Internal controls did not prevent or detect the errors. Effect: The Department’s subaward reporting to FSRS was incomplete and inaccurate. Questioned costs: None noted. Recommendation: We recommend the Department develop procedures and internal controls to ensure that all required subawards and subaward modifications are reported accurately and timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award should be reported as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the Department must continue to report the subaward, including grant modifications. Views of responsible officials: Management agrees with the finding.
Federal Agency: U.S Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268 Federal Award Identification Number and Year: P063P222488, P268K232488 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 certify enrollment information under the Pell grant and the Direct and FFEL loan programs via the National Student Loan Data System (NSLDS), at a minimum of every 60 days (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 noted four of 40 students selected for testing did not have enrollment properly reported to NSLDS with in the required reporting window. This included one instance in which the District failed to certify enrollment. Questioned costs: There are no questioned costs. 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. Four of the students selected for testing were found to not have been certified within the required reporting window. Cause: During the reporting window, the District changed between allowable reporting groups or models. Under the new reporting group some programs that were not included in the prior reporting group were not properly recognized in initial certification transmissions. This resulted in one enrollment certification reports being rejected, impacting three of the students selected for testing. The College worked with National Student Clearinghouse (NSC) to resolve the issue, but the report was finalized after the applicable reporting period for the students ended. In addition, one of the students selected for testing had withdrawn and re-enrolled for a future term in the subsequent academic year. The reporting submitted to NSLDS through NSC excluded this student from the enrollment reports as the enrollment term did not align with the reporting term. Effect: There is a risk that students have the incorrect enrollment status, which can result in improper financial aid amounts being awarded. Repeat finding: No Recommendation: We recommend that the District design and implement controls to ensure reporting to NSLDS are designed to capture all enrolled students and programs offered by the District. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268 Federal Award Identification Number and Year: P063P222488, P268K232488 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 certify enrollment information under the Pell grant and the Direct and FFEL loan programs via the National Student Loan Data System (NSLDS), at a minimum of every 60 days (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 noted four of 40 students selected for testing did not have enrollment properly reported to NSLDS with in the required reporting window. This included one instance in which the District failed to certify enrollment. Questioned costs: There are no questioned costs. 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. Four of the students selected for testing were found to not have been certified within the required reporting window. Cause: During the reporting window, the District changed between allowable reporting groups or models. Under the new reporting group some programs that were not included in the prior reporting group were not properly recognized in initial certification transmissions. This resulted in one enrollment certification reports being rejected, impacting three of the students selected for testing. The College worked with National Student Clearinghouse (NSC) to resolve the issue, but the report was finalized after the applicable reporting period for the students ended. In addition, one of the students selected for testing had withdrawn and re-enrolled for a future term in the subsequent academic year. The reporting submitted to NSLDS through NSC excluded this student from the enrollment reports as the enrollment term did not align with the reporting term. Effect: There is a risk that students have the incorrect enrollment status, which can result in improper financial aid amounts being awarded. Repeat finding: No Recommendation: We recommend that the District design and implement controls to ensure reporting to NSLDS are designed to capture all enrolled students and programs offered by the District. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268 Federal Award Identification Number and Year: P063P222488, P268K232488 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 certify enrollment information under the Pell grant and the Direct and FFEL loan programs via the National Student Loan Data System (NSLDS), at a minimum of every 60 days (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 noted four of 40 students selected for testing did not have enrollment properly reported to NSLDS with in the required reporting window. This included one instance in which the District failed to certify enrollment. Questioned costs: There are no questioned costs. 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. Four of the students selected for testing were found to not have been certified within the required reporting window. Cause: During the reporting window, the District changed between allowable reporting groups or models. Under the new reporting group some programs that were not included in the prior reporting group were not properly recognized in initial certification transmissions. This resulted in one enrollment certification reports being rejected, impacting three of the students selected for testing. The College worked with National Student Clearinghouse (NSC) to resolve the issue, but the report was finalized after the applicable reporting period for the students ended. In addition, one of the students selected for testing had withdrawn and re-enrolled for a future term in the subsequent academic year. The reporting submitted to NSLDS through NSC excluded this student from the enrollment reports as the enrollment term did not align with the reporting term. Effect: There is a risk that students have the incorrect enrollment status, which can result in improper financial aid amounts being awarded. Repeat finding: No Recommendation: We recommend that the District design and implement controls to ensure reporting to NSLDS are designed to capture all enrolled students and programs offered by the District. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268 Federal Award Identification Number and Year: P063P222488, P268K232488 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 certify enrollment information under the Pell grant and the Direct and FFEL loan programs via the National Student Loan Data System (NSLDS), at a minimum of every 60 days (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 noted four of 40 students selected for testing did not have enrollment properly reported to NSLDS with in the required reporting window. This included one instance in which the District failed to certify enrollment. Questioned costs: There are no questioned costs. 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. Four of the students selected for testing were found to not have been certified within the required reporting window. Cause: During the reporting window, the District changed between allowable reporting groups or models. Under the new reporting group some programs that were not included in the prior reporting group were not properly recognized in initial certification transmissions. This resulted in one enrollment certification reports being rejected, impacting three of the students selected for testing. The College worked with National Student Clearinghouse (NSC) to resolve the issue, but the report was finalized after the applicable reporting period for the students ended. In addition, one of the students selected for testing had withdrawn and re-enrolled for a future term in the subsequent academic year. The reporting submitted to NSLDS through NSC excluded this student from the enrollment reports as the enrollment term did not align with the reporting term. Effect: There is a risk that students have the incorrect enrollment status, which can result in improper financial aid amounts being awarded. Repeat finding: No Recommendation: We recommend that the District design and implement controls to ensure reporting to NSLDS are designed to capture all enrolled students and programs offered by the District. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2023-001 Subject: Student Financial Assistance Cluster - Special Tests and Provisions - Enrollment Reporting Federal Agency: Department of Education Federal Programs: Federal Pell Grant Program, Federal Direct Student Loans Assistance Listings Numbers: 84.063, 84.268 Compliance Requirement: Special Tests and Provisions - Enrollment Reporting Audit Findings: Material Weakness, Other Matters Condition and Context As a recipient of Title IV funding from the Federal Pell Grant Program (Pell) and Federal Direct Student Loans program (direct loan), the University was responsible for reporting accurate enrollment information for students receiving those awards to the National Student Loan Data System (NSLDS). Enrollment reporting requires the University to review, update, and certify student enrollment statuses, program information, and effective dates for each student receiving a Pell and/or direct loan award with a change in its enrollment information. Although the University had policies and procedures in place over Enrollment Reporting, a specific process to ensure system defects did not impact reporting requirements was not implemented. As such, errors in reporting campus level and program level data went undetected. A sample of 40 students was selected to determine if the University was notifying the Department of Education of changes in student enrollment information in a timely and accurate manner. Of the 40 students tested, 11 students had incorrect enrollment effective dates reported to the NSLDS for both campus-level and program level data. Follow-up procedures determined that the issue was isolated to students in the Spring 2023 term who had a change in enrollment status from the census date to the end of the term. The issue was a result of a system defect that pulled the wrong dates into the report the University used to submit the data to the NSLDS. The issue affected 160 students out of a total of 6,952 students. The lack of effective internal controls was a systemic issue throughout the audit period, while the noncompliance was isolated to the Spring 2023 term. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 14 UNIVERSITY OF SOUTHERN INDIANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 34 CFR 685.309(b) states in part: "Enrollment reporting process. (1) Upon receipt of an enrollment report from the Secretary, a school must update all information in the report and return the report to the Secretary (i) In the manner and format prescribed by the Secretary; and (ii) Within the timeframe prescribed by the Secretary. . . ." The 2022-2023 Federal Student Aid Handbook, Volume 2, Chapter 3 states in part: "Sharing Information With NSLDS, Federal Loan Servicers, And Guarantors Reporting student enrollment data to NSLDS Student enrollment information is important, and all schools participating or approved to participate in the FSA programs must have online enrollment access and have some arrangement to report student enrollment data to the National Student Loan Data System (NSLDS) through an enrollment roster file. Enrollment information is used to determine if the student is still considered in school, must be moved into repayment, or is eligible for an inschool deferment. Program-level enrollment data is also used to determine a student's eligibility for Direct Subsidized Loans. For students moving into repayment, the out-of-school status effective date determines when the grace period begins and how soon a student must begin repaying loan funds. You're required to report changes in the student's enrollment status, the effective date of the status, and an anticipated completion date. . . ." Cause A proper system of internal controls over enrollment reporting was not effective to ensure that accurate enrollment data was submitted to the NSLDS. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the University's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, enrollment information was not properly submitted to the NSLDS. Questioned Costs There were no questioned costs identified. Recommendation We recommended the University's management establish a system of internal controls that includes a review of Banner job processes to verify source data is correctly populated so as to ensure that all data elements required to be submitted to the NSLDS are accurate. INDIANA STATE BOARD OF ACCOUNTS 15 UNIVERSITY OF SOUTHERN INDIANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: Student Financial Assistance Cluster - Special Tests and Provisions - Enrollment Reporting Federal Agency: Department of Education Federal Programs: Federal Pell Grant Program, Federal Direct Student Loans Assistance Listings Numbers: 84.063, 84.268 Compliance Requirement: Special Tests and Provisions - Enrollment Reporting Audit Findings: Material Weakness, Other Matters Condition and Context As a recipient of Title IV funding from the Federal Pell Grant Program (Pell) and Federal Direct Student Loans program (direct loan), the University was responsible for reporting accurate enrollment information for students receiving those awards to the National Student Loan Data System (NSLDS). Enrollment reporting requires the University to review, update, and certify student enrollment statuses, program information, and effective dates for each student receiving a Pell and/or direct loan award with a change in its enrollment information. Although the University had policies and procedures in place over Enrollment Reporting, a specific process to ensure system defects did not impact reporting requirements was not implemented. As such, errors in reporting campus level and program level data went undetected. A sample of 40 students was selected to determine if the University was notifying the Department of Education of changes in student enrollment information in a timely and accurate manner. Of the 40 students tested, 11 students had incorrect enrollment effective dates reported to the NSLDS for both campus-level and program level data. Follow-up procedures determined that the issue was isolated to students in the Spring 2023 term who had a change in enrollment status from the census date to the end of the term. The issue was a result of a system defect that pulled the wrong dates into the report the University used to submit the data to the NSLDS. The issue affected 160 students out of a total of 6,952 students. The lack of effective internal controls was a systemic issue throughout the audit period, while the noncompliance was isolated to the Spring 2023 term. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 14 UNIVERSITY OF SOUTHERN INDIANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 34 CFR 685.309(b) states in part: "Enrollment reporting process. (1) Upon receipt of an enrollment report from the Secretary, a school must update all information in the report and return the report to the Secretary (i) In the manner and format prescribed by the Secretary; and (ii) Within the timeframe prescribed by the Secretary. . . ." The 2022-2023 Federal Student Aid Handbook, Volume 2, Chapter 3 states in part: "Sharing Information With NSLDS, Federal Loan Servicers, And Guarantors Reporting student enrollment data to NSLDS Student enrollment information is important, and all schools participating or approved to participate in the FSA programs must have online enrollment access and have some arrangement to report student enrollment data to the National Student Loan Data System (NSLDS) through an enrollment roster file. Enrollment information is used to determine if the student is still considered in school, must be moved into repayment, or is eligible for an inschool deferment. Program-level enrollment data is also used to determine a student's eligibility for Direct Subsidized Loans. For students moving into repayment, the out-of-school status effective date determines when the grace period begins and how soon a student must begin repaying loan funds. You're required to report changes in the student's enrollment status, the effective date of the status, and an anticipated completion date. . . ." Cause A proper system of internal controls over enrollment reporting was not effective to ensure that accurate enrollment data was submitted to the NSLDS. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the University's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, enrollment information was not properly submitted to the NSLDS. Questioned Costs There were no questioned costs identified. Recommendation We recommended the University's management establish a system of internal controls that includes a review of Banner job processes to verify source data is correctly populated so as to ensure that all data elements required to be submitted to the NSLDS are accurate. INDIANA STATE BOARD OF ACCOUNTS 15 UNIVERSITY OF SOUTHERN INDIANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding # 2023-002 Program: AL 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Suspension & Debarment Grant Number & Year: SLFRP4397, March 3, 2021, through December 31, 2024 Federal Grantor Agency: U.S. Department of the Treasury Criteria: Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.303 (January 1, 2023) states the following, in relevant part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR § 200.214 (January 1, 2023) states the following: Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The U.S. Department of the Treasury adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR § 1000.10 (January 1, 2023), which states the following: Except for the deviations set forth elsewhere in this Part, the Department of the Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200. 2 CFR § 180.300 (January 1, 2023) requires non-Federal entities to verify that an entity is not excluded or disqualified prior to entering into a covered transaction by “(a) Checking SAM Exclusions; or (b) Collecting a certification from that . . . [entity]; or (c) Adding a clause or condition to the covered transaction with that . . . [entity].” A good internal control plan requires the County to have proper procedures in place to verify that contractors paid with Federal funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. Condition: Dawes County could not provide documentation to support that the County implemented effective internal controls to ensure that suspension and debarment requirements were followed and adequately documented. We noted the County used Coronavirus State and Local Fiscal Recovery Funds to pay eight vendors over $25,000 each, totaling $962,435, during the fiscal year ended June 30, 2023. The County failed to ensure that these vendors were not excluded or disqualified prior to entering into these covered transactions. We reviewed SAM.gov, and noted that none of these vendors were suspended, debarred, or otherwise excluded from participation in Federal programs or activities as of the date testing was performed. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: The following table provides details of the covered transactions noted: Cause: Lack of procedures and knowledge regarding suspension and debarment requirements. Effect: Without adequate procedures to ensure contractors are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations, leading to possible Federal sanctions. Recommendation: We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that a contractor is not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and those procedures are adequately documented. View of Officials: Dawes County Board of Commissioners will work closely with our new ARPA Funding Coordinator to ensure we do the background check for contractors receiving federal funds. Dawes County will also use our newly contracted firm to check on regulations for the program with SAM.gov and other resources provided by the federal government. Mark DeDiana with Core CPAs out of Hastings, Nebraska will be our new contact to ensure federal guidelines are achieved.
Cluster name: Student Financial Assistance Cluster Assistance Listings numbers and names: 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award numbers and year: P007A220134, P033A220134, P063P222910, and P268K232910; July 1, 2022, through June 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions Questioned costs: $8 Condition—Contrary to federal regulations and District policies and procedures, the District did not correctly calculate $8 of returns of student financial assistance monies it reported in the federal agency’s Common Origination and Disbursement (COD) system. Specifically, for 1 of 40 students tested, the District used incorrect credit hours when calculating the refund amount it recorded in the COD, resulting in the student being owed a refund of $8. In addition, for 2 of 40 students tested, the District did not timely calculate, report, and return student financial assistance monies owed to the student or the federal government within the required 45 days after the student’s withdrawal from classes, as the District returned these students’ monies 4 days and 17 days late. Effect—Because of the District’s inaccurate calculation in the COD system, a student was owed a refund of $8 from the District. Further, the District increases the risk that they may not collect monies from the student that are due back to the federal government or may not refund monies it owes to students by not calculating, reporting, and returning student financial assistance monies within the required time frame. Cause—District management reported it intended to strengthen its policies and procedures to require an independent review of the calculation, but, because of program management turnover, it was unable to prioritize these revisions. Further, District management reported that it did not have sufficient staffing available to calculate, report, and process returns of student financial assistance monies within the required 45 days. Criteria—Federal regulations and District policies and procedures require the District to accurately calculate, report, and return federal student financial assistance to the federal grantor no later than 45 days after the date of the District’s determination that the student withdrew (34 Code of Federal Regulations [CFR] §§668.22 and 668.173). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The District should allocate staffing and improve its policies and procedures to: 1. Accurately calculate, report, and return student financial assistance monies to the federal government or the student within the required 45 days. 2. Require an independent review of the return of student financial assistance monies calculations prior to their submission to the COD. The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-102 and was initially reported in fiscal year 2021.
Cluster name: Student Financial Assistance Cluster Assistance Listings numbers and names: 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award numbers and year: P007A220134, P033A220134, P063P222910, and P268K232910; July 1, 2022, through June 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions Questioned costs: $8 Condition—Contrary to federal regulations and District policies and procedures, the District did not correctly calculate $8 of returns of student financial assistance monies it reported in the federal agency’s Common Origination and Disbursement (COD) system. Specifically, for 1 of 40 students tested, the District used incorrect credit hours when calculating the refund amount it recorded in the COD, resulting in the student being owed a refund of $8. In addition, for 2 of 40 students tested, the District did not timely calculate, report, and return student financial assistance monies owed to the student or the federal government within the required 45 days after the student’s withdrawal from classes, as the District returned these students’ monies 4 days and 17 days late. Effect—Because of the District’s inaccurate calculation in the COD system, a student was owed a refund of $8 from the District. Further, the District increases the risk that they may not collect monies from the student that are due back to the federal government or may not refund monies it owes to students by not calculating, reporting, and returning student financial assistance monies within the required time frame. Cause—District management reported it intended to strengthen its policies and procedures to require an independent review of the calculation, but, because of program management turnover, it was unable to prioritize these revisions. Further, District management reported that it did not have sufficient staffing available to calculate, report, and process returns of student financial assistance monies within the required 45 days. Criteria—Federal regulations and District policies and procedures require the District to accurately calculate, report, and return federal student financial assistance to the federal grantor no later than 45 days after the date of the District’s determination that the student withdrew (34 Code of Federal Regulations [CFR] §§668.22 and 668.173). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The District should allocate staffing and improve its policies and procedures to: 1. Accurately calculate, report, and return student financial assistance monies to the federal government or the student within the required 45 days. 2. Require an independent review of the return of student financial assistance monies calculations prior to their submission to the COD. The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-102 and was initially reported in fiscal year 2021.
Cluster name: Student Financial Assistance Cluster Assistance Listings numbers and names: 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award numbers and year: P007A220134, P033A220134, P063P222910, and P268K232910; July 1, 2022, through June 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions Questioned costs: $8 Condition—Contrary to federal regulations and District policies and procedures, the District did not correctly calculate $8 of returns of student financial assistance monies it reported in the federal agency’s Common Origination and Disbursement (COD) system. Specifically, for 1 of 40 students tested, the District used incorrect credit hours when calculating the refund amount it recorded in the COD, resulting in the student being owed a refund of $8. In addition, for 2 of 40 students tested, the District did not timely calculate, report, and return student financial assistance monies owed to the student or the federal government within the required 45 days after the student’s withdrawal from classes, as the District returned these students’ monies 4 days and 17 days late. Effect—Because of the District’s inaccurate calculation in the COD system, a student was owed a refund of $8 from the District. Further, the District increases the risk that they may not collect monies from the student that are due back to the federal government or may not refund monies it owes to students by not calculating, reporting, and returning student financial assistance monies within the required time frame. Cause—District management reported it intended to strengthen its policies and procedures to require an independent review of the calculation, but, because of program management turnover, it was unable to prioritize these revisions. Further, District management reported that it did not have sufficient staffing available to calculate, report, and process returns of student financial assistance monies within the required 45 days. Criteria—Federal regulations and District policies and procedures require the District to accurately calculate, report, and return federal student financial assistance to the federal grantor no later than 45 days after the date of the District’s determination that the student withdrew (34 Code of Federal Regulations [CFR] §§668.22 and 668.173). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The District should allocate staffing and improve its policies and procedures to: 1. Accurately calculate, report, and return student financial assistance monies to the federal government or the student within the required 45 days. 2. Require an independent review of the return of student financial assistance monies calculations prior to their submission to the COD. The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-102 and was initially reported in fiscal year 2021.
Cluster name: Student Financial Assistance Cluster Assistance Listings numbers and names: 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award numbers and year: P007A220134, P033A220134, P063P222910, and P268K232910; July 1, 2022, through June 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions Questioned costs: $8 Condition—Contrary to federal regulations and District policies and procedures, the District did not correctly calculate $8 of returns of student financial assistance monies it reported in the federal agency’s Common Origination and Disbursement (COD) system. Specifically, for 1 of 40 students tested, the District used incorrect credit hours when calculating the refund amount it recorded in the COD, resulting in the student being owed a refund of $8. In addition, for 2 of 40 students tested, the District did not timely calculate, report, and return student financial assistance monies owed to the student or the federal government within the required 45 days after the student’s withdrawal from classes, as the District returned these students’ monies 4 days and 17 days late. Effect—Because of the District’s inaccurate calculation in the COD system, a student was owed a refund of $8 from the District. Further, the District increases the risk that they may not collect monies from the student that are due back to the federal government or may not refund monies it owes to students by not calculating, reporting, and returning student financial assistance monies within the required time frame. Cause—District management reported it intended to strengthen its policies and procedures to require an independent review of the calculation, but, because of program management turnover, it was unable to prioritize these revisions. Further, District management reported that it did not have sufficient staffing available to calculate, report, and process returns of student financial assistance monies within the required 45 days. Criteria—Federal regulations and District policies and procedures require the District to accurately calculate, report, and return federal student financial assistance to the federal grantor no later than 45 days after the date of the District’s determination that the student withdrew (34 Code of Federal Regulations [CFR] §§668.22 and 668.173). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The District should allocate staffing and improve its policies and procedures to: 1. Accurately calculate, report, and return student financial assistance monies to the federal government or the student within the required 45 days. 2. Require an independent review of the return of student financial assistance monies calculations prior to their submission to the COD. The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-102 and was initially reported in fiscal year 2021.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Food Worker Relief Program Assistance Listing Number: 10.181 Award Period: October 4, 2022 – October 4, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition/Context: The Organization’s written procurement policies for costs between $10,000 and $250,000, were not performed for one vendor. The Organization leveraged an existing relationship with a consulting vendor to develop an online application system for the program and included them in their proposal but did not go through specific procurement procedures. The Organization also did not verify whether the vendor was suspended or debarred. Criteria or specific requirement: In accordance with the Compliance Supplement, Part 6 – Internal Control, 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2 CFR 200.318 (a), the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In accordance with 2 CFR 200.320 (a)(2)(i), the non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Small purchase procedures - the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. In accordance with 2 CFR 180.220, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. A non-procurement transaction entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Questioned costs: None Cause: The Organization did not follow its procurement policies and did not have internal controls designed to ensure compliance with those policies. Effect: The Organization was not in compliance with the Compliance Supplement and the Code of Federal Regulations related to procurement and suspension and debarment provisions. Repeat Finding: No Recommendation: We recommend that the Organization strengthen its controls and processes to identify all procurement transactions, ensure the appropriate procurement policies and levels are followed and clearly documented, and to verify vendors are not suspended or debarred. These procedures will help ensure compliance with Compliance Supplement and the Code of Federal Regulations related to procurement and suspension and debarment provisions.
FINDING 2023-001 Information on the federal program: Subject: Title I Grants to Local Education Agencies - Internal Controls Federal Agency: Department of Agriculture Federal Program: Title I Grants to Local Education Agencies Assistance Listing Number: 84.010A Federal Award Numbers and Years (or Other Identifying Numbers): S010210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $48. Context: During testing of 40 payroll transactions for allowability, we noted 3 instances where the amount paid to the same employee did not agree to the employee’s approved contract amount. The amount charged to the grant for each payroll period was $16 more than what the same employee’s contract stated. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a documented, primary review of all time cards and payroll registers to ensure amounts charged to the grants agree to the approved contracts and rate schedules. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: Title I Grants to Local Education Agencies - Internal Controls Federal Agency: Department of Agriculture Federal Program: Title I Grants to Local Education Agencies Assistance Listing Number: 84.010A Federal Award Numbers and Years (or Other Identifying Numbers): S010210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $48. Context: During testing of 40 payroll transactions for allowability, we noted 3 instances where the amount paid to the same employee did not agree to the employee’s approved contract amount. The amount charged to the grant for each payroll period was $16 more than what the same employee’s contract stated. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a documented, primary review of all time cards and payroll registers to ensure amounts charged to the grants agree to the approved contracts and rate schedules. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-002 Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal 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). . . ." 29 CFR 5.5 states in part: a.The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in §5.1, the following clauses… (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… FINDING 2023-002 (Continued) (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not obtain the weekly payroll reports certifications from a construction company that was improving the building. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. Additionally, the School Corporation did not have a contract with the company that included clauses for the federal wage rate requirements. The sample item cost paid in the audit period was $5,847,449 for energy conservation improvements. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. FINDING 2023-002 (Continued) Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-002 Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal 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). . . ." 29 CFR 5.5 states in part: a.The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in §5.1, the following clauses… (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… FINDING 2023-002 (Continued) (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not obtain the weekly payroll reports certifications from a construction company that was improving the building. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. Additionally, the School Corporation did not have a contract with the company that included clauses for the federal wage rate requirements. The sample item cost paid in the audit period was $5,847,449 for energy conservation improvements. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. FINDING 2023-002 (Continued) Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, two reports had errors and were not supported by the School Corporation's records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure reports are supported by the ledgers. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, two reports had errors and were not supported by the School Corporation's records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure reports are supported by the ledgers. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, two reports had errors and were not supported by the School Corporation's records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure reports are supported by the ledgers. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, two reports had errors and were not supported by the School Corporation's records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure reports are supported by the ledgers. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, two reports had errors and were not supported by the School Corporation's records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure reports are supported by the ledgers. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.