Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-008 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Material Weakness Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2021, CUAHSI had advance drawdowns totaling $1,172,645 from the NSF. Of this amount, CUAHSI incurred $1,049,681 in eligible expenses for the year ended December 31, 2021. This resulted in $122,964 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2021 are reported as part of deferred revenue in the accompanying Statement of Financial Position. Cause & Context CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement. Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-008. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-008 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Material Weakness Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2021, CUAHSI had advance drawdowns totaling $1,172,645 from the NSF. Of this amount, CUAHSI incurred $1,049,681 in eligible expenses for the year ended December 31, 2021. This resulted in $122,964 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2021 are reported as part of deferred revenue in the accompanying Statement of Financial Position. Cause & Context CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement. Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-008. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-008 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Material Weakness Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2021, CUAHSI had advance drawdowns totaling $1,172,645 from the NSF. Of this amount, CUAHSI incurred $1,049,681 in eligible expenses for the year ended December 31, 2021. This resulted in $122,964 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2021 are reported as part of deferred revenue in the accompanying Statement of Financial Position. Cause & Context CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement. Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-008. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
2021-008 – CASH MANAGEMENT Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award.” These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.305 requires that non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition: The National Center for the Advancement of STEM Education, Inc. drew down 49 payment advances totaling $5,870,068 from the basic scientific research grants for the fiscal year ended December 31, 2021. Of this amount, $1,031,698 was returned to the grantor. However, there was a lack of adequate documentation which demonstrated amounts advanced were expended and/or returned in a timely fashion. Questioned Costs: Not applicable. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued) 2021-008 – CASH MANAGEMENT (Continued) Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Context: The total amount of advances received during the year were $5,870,068. Expenditures of the federal award were $6,477,348 for the fiscal year. Cause: Internal controls and procedures related to the cash management were not effectively designed or performed. Effect: The National Center for the Advancement of STEM Education, Inc. did not comply with the cash management compliance requirement. Recommendation: Management should establish proper policies and procedures which ensure compliance with federal guidelines. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
Condition and Context: As noted in finding 2021-002, ITCN had cash balances in the amount of $470,318, while also reporting a total deferred revenue of $1,377,071 and a due to grantor agency of $269,375. At September 30, 2021, the WIC program is reporting deferred revenues of $292,379 while reflecting an amount loaned to other funds relating to these restricted sources totaling $227,217. Also, at September 30, 2021, the Child Care and Development Block Grant program is reporting deferred revenues of $416,668 while reflecting an amount loaned to other funds relating to these restricted sources totaling $889,729. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds. Criteria: 2 CFR §200.305, Federal Payment, requires that non-federal entities establish written policies so that advance payments are as close as administratively feasible to the actual disbursements for direct program or project costs. Cause and Effect: The cause is a lack of resources and oversight of the accounting and financial reporting process. The effect is the use of restricted cash to fund other expenses not related to the restricted purpose. Recommendation: We recommend that ITCN implement the recommendations noted in finding 2021-002. Management’s Response: ITCN’s responsible officials’ views and planned corrective action are in its corrective action plan at the end of the report.
Condition and Context: As noted in finding 2021-002, ITCN had cash balances in the amount of $470,318, while also reporting a total deferred revenue of $1,377,071 and a due to grantor agency of $269,375. At September 30, 2021, the WIC program is reporting deferred revenues of $292,379 while reflecting an amount loaned to other funds relating to these restricted sources totaling $227,217. Also, at September 30, 2021, the Child Care and Development Block Grant program is reporting deferred revenues of $416,668 while reflecting an amount loaned to other funds relating to these restricted sources totaling $889,729. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds. Criteria: 2 CFR §200.305, Federal Payment, requires that non-federal entities establish written policies so that advance payments are as close as administratively feasible to the actual disbursements for direct program or project costs. Cause and Effect: The cause is a lack of resources and oversight of the accounting and financial reporting process. The effect is the use of restricted cash to fund other expenses not related to the restricted purpose. Recommendation: We recommend that ITCN implement the recommendations noted in finding 2021-002. Management’s Response: ITCN’s responsible officials’ views and planned corrective action are in its corrective action plan at the end of the report.
Condition and Context: As noted in finding 2021-002, ITCN had cash balances in the amount of $470,318, while also reporting a total deferred revenue of $1,377,071 and a due to grantor agency of $269,375. At September 30, 2021, the WIC program is reporting deferred revenues of $292,379 while reflecting an amount loaned to other funds relating to these restricted sources totaling $227,217. Also, at September 30, 2021, the Child Care and Development Block Grant program is reporting deferred revenues of $416,668 while reflecting an amount loaned to other funds relating to these restricted sources totaling $889,729. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds. Criteria: 2 CFR §200.305, Federal Payment, requires that non-federal entities establish written policies so that advance payments are as close as administratively feasible to the actual disbursements for direct program or project costs. Cause and Effect: The cause is a lack of resources and oversight of the accounting and financial reporting process. The effect is the use of restricted cash to fund other expenses not related to the restricted purpose. Recommendation: We recommend that ITCN implement the recommendations noted in finding 2021-002. Management’s Response: ITCN’s responsible officials’ views and planned corrective action are in its corrective action plan at the end of the report.
Condition and Context: As noted in finding 2021-002, ITCN had cash balances in the amount of $470,318, while also reporting a total deferred revenue of $1,377,071 and a due to grantor agency of $269,375. At September 30, 2021, the WIC program is reporting deferred revenues of $292,379 while reflecting an amount loaned to other funds relating to these restricted sources totaling $227,217. Also, at September 30, 2021, the Child Care and Development Block Grant program is reporting deferred revenues of $416,668 while reflecting an amount loaned to other funds relating to these restricted sources totaling $889,729. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds. Criteria: 2 CFR §200.305, Federal Payment, requires that non-federal entities establish written policies so that advance payments are as close as administratively feasible to the actual disbursements for direct program or project costs. Cause and Effect: The cause is a lack of resources and oversight of the accounting and financial reporting process. The effect is the use of restricted cash to fund other expenses not related to the restricted purpose. Recommendation: We recommend that ITCN implement the recommendations noted in finding 2021-002. Management’s Response: ITCN’s responsible officials’ views and planned corrective action are in its corrective action plan at the end of the report.
Condition and Context: As noted in finding 2021-002, ITCN had cash balances in the amount of $470,318, while also reporting a total deferred revenue of $1,377,071 and a due to grantor agency of $269,375. At September 30, 2021, the WIC program is reporting deferred revenues of $292,379 while reflecting an amount loaned to other funds relating to these restricted sources totaling $227,217. Also, at September 30, 2021, the Child Care and Development Block Grant program is reporting deferred revenues of $416,668 while reflecting an amount loaned to other funds relating to these restricted sources totaling $889,729. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds. Criteria: 2 CFR §200.305, Federal Payment, requires that non-federal entities establish written policies so that advance payments are as close as administratively feasible to the actual disbursements for direct program or project costs. Cause and Effect: The cause is a lack of resources and oversight of the accounting and financial reporting process. The effect is the use of restricted cash to fund other expenses not related to the restricted purpose. Recommendation: We recommend that ITCN implement the recommendations noted in finding 2021-002. Management’s Response: ITCN’s responsible officials’ views and planned corrective action are in its corrective action plan at the end of the report.
Condition and Context: As noted in finding 2021-002, ITCN had cash balances in the amount of $470,318, while also reporting a total deferred revenue of $1,377,071 and a due to grantor agency of $269,375. At September 30, 2021, the WIC program is reporting deferred revenues of $292,379 while reflecting an amount loaned to other funds relating to these restricted sources totaling $227,217. Also, at September 30, 2021, the Child Care and Development Block Grant program is reporting deferred revenues of $416,668 while reflecting an amount loaned to other funds relating to these restricted sources totaling $889,729. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds. Criteria: 2 CFR §200.305, Federal Payment, requires that non-federal entities establish written policies so that advance payments are as close as administratively feasible to the actual disbursements for direct program or project costs. Cause and Effect: The cause is a lack of resources and oversight of the accounting and financial reporting process. The effect is the use of restricted cash to fund other expenses not related to the restricted purpose. Recommendation: We recommend that ITCN implement the recommendations noted in finding 2021-002. Management’s Response: ITCN’s responsible officials’ views and planned corrective action are in its corrective action plan at the end of the report.
Information on the Federal Program: HEERF Student Aid Portion (CFDA Number 84.425E) – U.S. Department of Education Criteria: In accordance with 2 CFR § 200.305(b) of the Uniform Guidance, which applies to the HEERF grants, grantees must seek to minimize the time between drawing down funds from the G5 system and applying those funds to support a grant award’s activities. Consistent with this requirement, grantees must maintain grant funds in interest-bearing accounts, and any interest earned on grant funds above $500 per year must be remitted to the Federal government. An institution should refund any portion of the HEERF award that it does not have an immediate ability to expend on emergency financial grants to students, until the institution has a plan for the orderly distribution of the remainder of the funds. It can then be re-drawn from the institution’s account in G5. Condition and context: The University transferred $633,744.80 of HEERF Student Aid funds to the KSU Foundation for the purpose of holding and releasing funds to students. $146,242.20 of checks distributed to students did not clear, and these funds were held in an interest-bearing account. As of September 15, 2023, accrued interest totaled $49,145.32. The University did not refund the portion of the HEERF award that could not be disbursed back to the Department of Education. The University also did not remit the accrued interest. Questioned Cost: $195,387.52 Cause: The University did not have an adequate plan in place for the orderly distribution of the HEERF award that it did not have an immediate ability to expend. Effect: The University is not in compliance with the refund requirements of the Department of Education. Recommendation: We recommend the University complete the refund procedures for the funds unable to be disbursed and the accrued interest. Additionally, the University should establish a plan for the orderly distribution of the remaining balance of HEERF funds.
2021-006 - Cash Management Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.302(b)(6)) & 2 CFR section 200.305(b) (3). Condition: During audit procedures, it was identified that the Town did not have a cash management policy in place. Cause: The Town has experienced turnover in the Treasurer’s position over the past few years, which has delayed the policy implementation. Effect: The Town may not have adequate policy and procedures in place to safeguard its most liquid assets. Identification of Questioned Costs: None identified. Context: The population consisted of 4 out of 10 pay requisites deposit of reimbursements from the fiscal year were examined. Out of the 4 selections only 1 deposit had backup documentation. The other 3 were lacking prove that deposits were recorded properly. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a cash management policy that follows the Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
2021-006 - Cash Management Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.302(b)(6)) & 2 CFR section 200.305(b) (3). Condition: During audit procedures, it was identified that the Town did not have a cash management policy in place. Cause: The Town has experienced turnover in the Treasurer’s position over the past few years, which has delayed the policy implementation. Effect: The Town may not have adequate policy and procedures in place to safeguard its most liquid assets. Identification of Questioned Costs: None identified. Context: The population consisted of 4 out of 10 pay requisites deposit of reimbursements from the fiscal year were examined. Out of the 4 selections only 1 deposit had backup documentation. The other 3 were lacking prove that deposits were recorded properly. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a cash management policy that follows the Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
Reference Number: 2021-009 Category of Finding: Cash Management Type of Finding: Significant Deficiency and Instance of Noncompliance State Administering Department: California Department of Public Health (Public Health) Assistance Listing Number: 93.917 Federal Program Title: HIV Care Formula Grants Federal Award Numbers and Years: 2 X08HA28020-06; 2020 2 X08HA28020-07; 2021 5 X07HA12778-12, 2020 5 X07HA12778-13, 2021 Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.305 - Payment (2 CFR 200.305): (a) For states, payments are governed by Treasury-State CMIA agreements and default procedures codified at 31 CFR Part 205 “Rules and Procedures for Efficient Federal-State Funds Transfers” and TFM 4A-2000 Overall Disbursing Rules for All Federal Agencies. Title 31 – Money and Finance: Treasury. Subtitle B – Regulations Relating to Money and Finance. Chapter II – Fiscal Service, Department of the Treasury. Subchapter A – Bureau of Fiscal Service. Part 205 – Rules and Procedures for Efficient Federal-State Funds Transfers. Subpart B – Rules Applicable to Federal Assistance Programs Not Included in a Treasury-State Agreement. §205.33 How are funds transfers processed? (31 CFR 205.33): (a) A State must minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. A federal Program Agency must limit a funds transfer to a State to the minimum amounts needed by the State and must time the disbursement to be in accord with the actual, immediate cash requirements of the State in carrying out a Federal assistance program or project. The timing and amount of funds transfers must be as close as is administratively feasible to a State's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. States should exercise sound cash management in funds transfers to subgrantees in accordance with OMB Circular A-102 (For availability, see 5 CFR 1310.3.). Condition Out of 25 cash drawdowns reviewed, one sample did not meet the requirements to minimize the timing between Public Health’s Office of AIDS receipt of Federal funds and disbursement of those funds for program purposes. The funds from this drawdown were designated to pay 33 vendor invoices. However, payments for 23 of these invoices were made between 16 to 175 days after the drawdown occurred. One invoice was paid 598 days after the date of the drawdown. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause Public Health’s Office of AIDS redirected staff, including manager level positions, to help with other assignments during the year. Furthermore, there were delays due to the challenges presented by the increased demand of processing payments associated with substantial new COVID-19 funding. Effect When the necessary oversight and monitoring of cash drawdowns is insufficient, Public Health has an increased risk of not disbursing Federal award funds in a timely manner. Questioned Costs No questioned costs were identified. Context Public Health administered 157 Federal fund drawdowns for HIV Care Formula Grants program expenditures during the fiscal year ended June 30, 2021. Our sample of 25 drawdowns totaled $41,615,273. The one drawdown in question was for $1,229,031, which included $1,007,896 in invoices that were paid in 16 or more days after the date of the drawdown. The sample was not a statistically valid sample. Recommendation The Public Heath’s Office of AIDS should continue to monitor compliance with its policies to ensure staff follow established guidelines to minimize the timing between drawdown and disbursement of Federal funds. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Internal Control over Major Programs Finding 2021-001 Type: Material weakness Condition: There is a requirement for any advance in reimbursement to be fully expended within 30 days of it becoming available for use. Criteria: Cash management section of the 2 CFR section 200.305. Cause: A failure in the design of internal controls over compliance resulted in the City not abiding by this requirement. Effect: There were instances where the agreements made to purchase property and other associated costs were altered or not followed through with. The advance in reimbursement was not completely used within 30 days of it becoming available for use. Compliance Finding 2021-001 Type: Noncompliance Condition: The compliance requirement for the cash management 2 CFR section 200.305 states that any advanced reimbursement should be used within 30 days of receiving the payment. An advanced payment was received under the Hazard Mitigation Grant that was not completely expended within this period. Criteria: Cash management section of the 2 CFR section 200.305. Cause: The nature of these transactions cause timing discrepancies, which result in internal controls over compliance to be deficient, but were not considered to cause any material misstatements. Effect: There were instances where the agreements made to purchase property and other associated costs were altered or not followed through with. The advance in reimbursement was not completely used within 30 days of it becoming available for use. Recommendation: We recommend the Clerk work more closely with the award agencies to ensure the eligibility of all claims for reimbursement is understood by both parties.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Information on the Federal Program: HEERF Student Aid Portion (CFDA Number 84.425E) – U.S. Department of Education Criteria: In accordance with 2 CFR § 200.305(b) of the Uniform Guidance, which applies to the HEERF grants, grantees must seek to minimize the time between drawing down funds from the G5 system and applying those funds to support a grant award’s activities. Consistent with this requirement, grantees must maintain grant funds in interest-bearing accounts, and any interest earned on grant funds above $500 per year must be remitted to the Federal government. An institution should refund any portion of the HEERF award that it does not have an immediate ability to expend on emergency financial grants to students, until the institution has a plan for the orderly distribution of the remainder of the funds. It can then be re-drawn from the institution’s account in G5. Condition and context: The University transferred $633,744.80 of HEERF Student Aid funds to the KSU Foundation for the purpose of holding and releasing funds to students. $146,242.20 of checks distributed to students did not clear, and these funds were held in an interest-bearing account. As of September 15, 2023, accrued interest totaled $49,145.32. The University did not refund the portion of the HEERF award that could not be disbursed back to the Department of Education. The University also did not remit the accrued interest. Questioned Cost: $195,387.52 Cause: The University did not have an adequate plan in place for the orderly distribution of the HEERF award that it did not have an immediate ability to expend. Effect: The University is not in compliance with the refund requirements of the Department of Education. Recommendation: We recommend the University complete the refund procedures for the funds unable to be disbursed and the accrued interest. Additionally, the University should establish a plan for the orderly distribution of the remaining balance of HEERF funds.
2021-006 - Cash Management Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.302(b)(6)) & 2 CFR section 200.305(b) (3). Condition: During audit procedures, it was identified that the Town did not have a cash management policy in place. Cause: The Town has experienced turnover in the Treasurer’s position over the past few years, which has delayed the policy implementation. Effect: The Town may not have adequate policy and procedures in place to safeguard its most liquid assets. Identification of Questioned Costs: None identified. Context: The population consisted of 4 out of 10 pay requisites deposit of reimbursements from the fiscal year were examined. Out of the 4 selections only 1 deposit had backup documentation. The other 3 were lacking prove that deposits were recorded properly. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a cash management policy that follows the Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
2021-006 - Cash Management Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.302(b)(6)) & 2 CFR section 200.305(b) (3). Condition: During audit procedures, it was identified that the Town did not have a cash management policy in place. Cause: The Town has experienced turnover in the Treasurer’s position over the past few years, which has delayed the policy implementation. Effect: The Town may not have adequate policy and procedures in place to safeguard its most liquid assets. Identification of Questioned Costs: None identified. Context: The population consisted of 4 out of 10 pay requisites deposit of reimbursements from the fiscal year were examined. Out of the 4 selections only 1 deposit had backup documentation. The other 3 were lacking prove that deposits were recorded properly. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a cash management policy that follows the Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
Reference Number: 2021-009 Category of Finding: Cash Management Type of Finding: Significant Deficiency and Instance of Noncompliance State Administering Department: California Department of Public Health (Public Health) Assistance Listing Number: 93.917 Federal Program Title: HIV Care Formula Grants Federal Award Numbers and Years: 2 X08HA28020-06; 2020 2 X08HA28020-07; 2021 5 X07HA12778-12, 2020 5 X07HA12778-13, 2021 Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.305 - Payment (2 CFR 200.305): (a) For states, payments are governed by Treasury-State CMIA agreements and default procedures codified at 31 CFR Part 205 “Rules and Procedures for Efficient Federal-State Funds Transfers” and TFM 4A-2000 Overall Disbursing Rules for All Federal Agencies. Title 31 – Money and Finance: Treasury. Subtitle B – Regulations Relating to Money and Finance. Chapter II – Fiscal Service, Department of the Treasury. Subchapter A – Bureau of Fiscal Service. Part 205 – Rules and Procedures for Efficient Federal-State Funds Transfers. Subpart B – Rules Applicable to Federal Assistance Programs Not Included in a Treasury-State Agreement. §205.33 How are funds transfers processed? (31 CFR 205.33): (a) A State must minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. A federal Program Agency must limit a funds transfer to a State to the minimum amounts needed by the State and must time the disbursement to be in accord with the actual, immediate cash requirements of the State in carrying out a Federal assistance program or project. The timing and amount of funds transfers must be as close as is administratively feasible to a State's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. States should exercise sound cash management in funds transfers to subgrantees in accordance with OMB Circular A-102 (For availability, see 5 CFR 1310.3.). Condition Out of 25 cash drawdowns reviewed, one sample did not meet the requirements to minimize the timing between Public Health’s Office of AIDS receipt of Federal funds and disbursement of those funds for program purposes. The funds from this drawdown were designated to pay 33 vendor invoices. However, payments for 23 of these invoices were made between 16 to 175 days after the drawdown occurred. One invoice was paid 598 days after the date of the drawdown. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause Public Health’s Office of AIDS redirected staff, including manager level positions, to help with other assignments during the year. Furthermore, there were delays due to the challenges presented by the increased demand of processing payments associated with substantial new COVID-19 funding. Effect When the necessary oversight and monitoring of cash drawdowns is insufficient, Public Health has an increased risk of not disbursing Federal award funds in a timely manner. Questioned Costs No questioned costs were identified. Context Public Health administered 157 Federal fund drawdowns for HIV Care Formula Grants program expenditures during the fiscal year ended June 30, 2021. Our sample of 25 drawdowns totaled $41,615,273. The one drawdown in question was for $1,229,031, which included $1,007,896 in invoices that were paid in 16 or more days after the date of the drawdown. The sample was not a statistically valid sample. Recommendation The Public Heath’s Office of AIDS should continue to monitor compliance with its policies to ensure staff follow established guidelines to minimize the timing between drawdown and disbursement of Federal funds. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Internal Control over Major Programs Finding 2021-001 Type: Material weakness Condition: There is a requirement for any advance in reimbursement to be fully expended within 30 days of it becoming available for use. Criteria: Cash management section of the 2 CFR section 200.305. Cause: A failure in the design of internal controls over compliance resulted in the City not abiding by this requirement. Effect: There were instances where the agreements made to purchase property and other associated costs were altered or not followed through with. The advance in reimbursement was not completely used within 30 days of it becoming available for use. Compliance Finding 2021-001 Type: Noncompliance Condition: The compliance requirement for the cash management 2 CFR section 200.305 states that any advanced reimbursement should be used within 30 days of receiving the payment. An advanced payment was received under the Hazard Mitigation Grant that was not completely expended within this period. Criteria: Cash management section of the 2 CFR section 200.305. Cause: The nature of these transactions cause timing discrepancies, which result in internal controls over compliance to be deficient, but were not considered to cause any material misstatements. Effect: There were instances where the agreements made to purchase property and other associated costs were altered or not followed through with. The advance in reimbursement was not completely used within 30 days of it becoming available for use. Recommendation: We recommend the Clerk work more closely with the award agencies to ensure the eligibility of all claims for reimbursement is understood by both parties.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2021-006: Cash Management - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with §200.305, Federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non‐ Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non‐ Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass‐through entity. Condition: The Organization has a policy which in includes thee Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the seventeen (17) drawdown requests that we tested, there was no evidence of review and approval for payment. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non‐ Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non‐ Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass‐through entity. Condition: The Organization has a policy which in includes thee Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the seventeen (17) drawdown requests that we tested, there was no evidence of review and approval for payment. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Finding 2020-007 Lack of Internal Control Over Cash Management Federal Agencies: U.S. Department of the Treasury Federal Programs: Coronavirus Relief Fund CFDA Numbers: 21.019 Award Number: SLT0591/0845/1405 Award Year: 2020 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: The requirement for cash management, as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Community’s cash balances at December 31, 2020 were $401,474 and total unearned revenue was $2,427,781, leading to a cash shortfall of $2,026,307. This resulted from the temporary borrowing of federal funds to pay expenses in the General Fund and other federal award programs. Deferred revenue as of December 31, 2020 was $631,800 in the Coronavirus Relief Fund. Cause: Lack of internal controls over cash management. Effect: The Community was not in compliance with 2 CFR 200.305 related to cash management requirements. Deposits were used to fund other programs of the Community. Questioned costs: $2,026,307, which is the shortfall between cash balances and unearned revenue balances. Repeat finding: This is a repeat of Finding 2019-007; therefore, we believe this to be a systemic issue. Recommendation: We recommend the Community monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash. Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2020-007 Lack of Internal Control Over Cash Management Federal Agencies: U.S. Department of the Treasury Federal Programs: Coronavirus Relief Fund CFDA Numbers: 21.019 Award Number: SLT0591/0845/1405 Award Year: 2020 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: The requirement for cash management, as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Community’s cash balances at December 31, 2020 were $401,474 and total unearned revenue was $2,427,781, leading to a cash shortfall of $2,026,307. This resulted from the temporary borrowing of federal funds to pay expenses in the General Fund and other federal award programs. Deferred revenue as of December 31, 2020 was $631,800 in the Coronavirus Relief Fund. Cause: Lack of internal controls over cash management. Effect: The Community was not in compliance with 2 CFR 200.305 related to cash management requirements. Deposits were used to fund other programs of the Community. Questioned costs: $2,026,307, which is the shortfall between cash balances and unearned revenue balances. Repeat finding: This is a repeat of Finding 2019-007; therefore, we believe this to be a systemic issue. Recommendation: We recommend the Community monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash. Management Response: Management agrees with this finding, see Corrective Action Plan.
The Organization did not establish written procedures as required by 2 CFR section 200.305 (Federal payment ‐ advances) [2 CFR section 200.302(b)(6)].
The Organization did not establish written procedures as required by 2 CFR section 200.305 (Federal payment ‐ advances) [2 CFR section 200.302(b)(6)].
MW2020-008 FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES (REPEAT FINDING) (PREVIOUSLY REPORTED AS MW2019-009) Condition Subsequent to the year ended December 31, 2019, CUAHSI drew down approximately $1,300,000 from National Science Foundation (“NSF”) based on information that there was going to be a government shutdown. Federal funds are required to be to be drawn down on a reimbursement basis and not in advance of the expenditures. The funds were not returned to NSF after it became clear that there would not be a government shutdown. Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cause CUAHSI had insufficient funds available to “float” operating expenses. Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding.Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. Current Year Status This condition still exists for the year ended December 31, 2020. During the completion of the audit, the auditor noted that during 2020, CUAHSI had advance drawdowns totaling $3,610,240 from the NSF. Of this amount, CUAHSI incurred $2,521,926 in eligible expenses for the year ended December 31, 2020. This resulted in $1,088,314 in federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2020 is reported as part of deferred revenue in the accompanying Statement of Financial Position. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-008 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2020, CUAHSI had advance drawdowns totaling $3,610,240 from the NSF. Of this amount, CUAHSI incurred $2,521,926 in eligible expenses for the year ended December 31, 2020. This resulted in $1,088,314 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2020 are reported as part of deferred revenue in the accompanying Statement of Financial Position. Cause & Context In anticipation of a government shut down due to COVID-19, CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement. Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-009. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-008 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2020, CUAHSI had advance drawdowns totaling $3,610,240 from the NSF. Of this amount, CUAHSI incurred $2,521,926 in eligible expenses for the year ended December 31, 2020. This resulted in $1,088,314 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2020 are reported as part of deferred revenue in the accompanying Statement of Financial Position. Cause & Context In anticipation of a government shut down due to COVID-19, CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement. Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-009. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-008 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2020, CUAHSI had advance drawdowns totaling $3,610,240 from the NSF. Of this amount, CUAHSI incurred $2,521,926 in eligible expenses for the year ended December 31, 2020. This resulted in $1,088,314 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2020 are reported as part of deferred revenue in the accompanying Statement of Financial Position. Cause & Context In anticipation of a government shut down due to COVID-19, CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement. Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-009. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-008 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2020, CUAHSI had advance drawdowns totaling $3,610,240 from the NSF. Of this amount, CUAHSI incurred $2,521,926 in eligible expenses for the year ended December 31, 2020. This resulted in $1,088,314 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2020 are reported as part of deferred revenue in the accompanying Statement of Financial Position. Cause & Context In anticipation of a government shut down due to COVID-19, CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement. Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-009. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-008 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2020, CUAHSI had advance drawdowns totaling $3,610,240 from the NSF. Of this amount, CUAHSI incurred $2,521,926 in eligible expenses for the year ended December 31, 2020. This resulted in $1,088,314 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2020 are reported as part of deferred revenue in the accompanying Statement of Financial Position. Cause & Context In anticipation of a government shut down due to COVID-19, CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement. Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-009. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non‐ Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non‐ Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass‐through entity. Condition: The Organization has a policy which in includes thee Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the seventeen (17) drawdown requests that we tested, there was no evidence of review and approval for payment. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non‐ Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non‐ Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass‐through entity. Condition: The Organization has a policy which in includes thee Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the seventeen (17) drawdown requests that we tested, there was no evidence of review and approval for payment. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Finding 2020-007 Lack of Internal Control Over Cash Management Federal Agencies: U.S. Department of the Treasury Federal Programs: Coronavirus Relief Fund CFDA Numbers: 21.019 Award Number: SLT0591/0845/1405 Award Year: 2020 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: The requirement for cash management, as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Community’s cash balances at December 31, 2020 were $401,474 and total unearned revenue was $2,427,781, leading to a cash shortfall of $2,026,307. This resulted from the temporary borrowing of federal funds to pay expenses in the General Fund and other federal award programs. Deferred revenue as of December 31, 2020 was $631,800 in the Coronavirus Relief Fund. Cause: Lack of internal controls over cash management. Effect: The Community was not in compliance with 2 CFR 200.305 related to cash management requirements. Deposits were used to fund other programs of the Community. Questioned costs: $2,026,307, which is the shortfall between cash balances and unearned revenue balances. Repeat finding: This is a repeat of Finding 2019-007; therefore, we believe this to be a systemic issue. Recommendation: We recommend the Community monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash. Management Response: Management agrees with this finding, see Corrective Action Plan.