FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
Finding Reference Number: SA 2022-005 Cash Management – Drawdown of Grant Funds In Advance of Disbursement AL Number: 14.218 Assistance Listing Title: CDBG - Entitlement Grants Cluster – Community Development Block Grants/Entitlement Grants COVID-19 - Community Development Block Grants/Entitlement Grants-CV Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B-14-MC-06-0037, B-15-MC-06-0037, B-16-MC-06-0037, B-17-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037, B-21-MC-06-0037 Criteria: Under 2 CFR 200.305, a CDBG grantee is prohibited from drawing funds down from its line of credit in advance of cash needs, and must minimize the time elapsing between the transfer of funds from its line of credit, and the disbursement of the funds. Advance payment must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the grantee or subrecipient carrying out an eligible activity. The general rule is that CDBG funds must be used within three business days they are drawn down. Condition: We selected thirteen disbursements related to projects, subgrants and administrative expenditures and noted one disbursement on September 30, 2021 was included in a reimbursement request on September 9, 2021 and payment was received from HUD on September 13, 2021, which is seventeen days prior to payment to the vendor. Effect: Drawing down funds in advance and not disbursing the funds in three days or less does not minimize the time elapsing between receipt of funds and expenditures and is not in compliance with the cash management provisions of 2 CFR 200.305 and the CDBG program. Cause: We understand the disbursement was requested prior to payment due to staff oversight. Recommendation: The City should not draw down funds until expenditures have been paid in cash and in the event drawdowns occur prior to disbursement, ensure that the time elapsing between the draw down and the expenditure is minimized. In addition, the City should determine whether the interest earned on the grant funds advanced needs to be returned to the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA 2022-005 Cash Management – Drawdown of Grant Funds In Advance of Disbursement AL Number: 14.218 Assistance Listing Title: CDBG - Entitlement Grants Cluster – Community Development Block Grants/Entitlement Grants COVID-19 - Community Development Block Grants/Entitlement Grants-CV Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B-14-MC-06-0037, B-15-MC-06-0037, B-16-MC-06-0037, B-17-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037, B-21-MC-06-0037 Criteria: Under 2 CFR 200.305, a CDBG grantee is prohibited from drawing funds down from its line of credit in advance of cash needs, and must minimize the time elapsing between the transfer of funds from its line of credit, and the disbursement of the funds. Advance payment must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the grantee or subrecipient carrying out an eligible activity. The general rule is that CDBG funds must be used within three business days they are drawn down. Condition: We selected thirteen disbursements related to projects, subgrants and administrative expenditures and noted one disbursement on September 30, 2021 was included in a reimbursement request on September 9, 2021 and payment was received from HUD on September 13, 2021, which is seventeen days prior to payment to the vendor. Effect: Drawing down funds in advance and not disbursing the funds in three days or less does not minimize the time elapsing between receipt of funds and expenditures and is not in compliance with the cash management provisions of 2 CFR 200.305 and the CDBG program. Cause: We understand the disbursement was requested prior to payment due to staff oversight. Recommendation: The City should not draw down funds until expenditures have been paid in cash and in the event drawdowns occur prior to disbursement, ensure that the time elapsing between the draw down and the expenditure is minimized. In addition, the City should determine whether the interest earned on the grant funds advanced needs to be returned to the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Federal Agency: Department of Health and Human Services Federal Programs: Research and Development Cluster Assistance Listing Numbers: 93.859 Federal Award Identification Number and Year: 1S06GM123552-01 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: The Federal Government requires that when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper (2 CFR section 200.305(b)(3)). Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The College did not make payments to subrecipients within 30 days after receipt of invoices. Questioned Costs: None. Context: During our testing of 7 out of 27 subrecipient payments during the year. CLA notes that 1 of the 7 payments was not made to the subrecipient within 30 calendar days as required. Cause: The College did not have an effective control in place to ensure subrecipient payments were paid timely. Effect: The College was not in compliance with the regulation to make payments to subrecipients within the required timeframe. Repeat Finding: No. Recommendation: We recommend that the College review and update current procedures to ensure subrecipient payments are paid timely. Views of Responsible Officials: Management agrees with the finding and has prepared a plan to correct the finding.
Finding 2022.006: Cash Management - Material Weakness Name of Federal Agency: 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 - 2022 and 2023, H8DCS35487 - 2021, and H8F40829 - 2023 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 or Potential Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 9 drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for all 9 drawdowns. Identification of Repeat Finding Yes, see finding 2021-006. 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.
SIGNIFICANT DEFICIENCY 2022-007 - 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 12 out of the 30 pay requisition deposit of reimbursements from the fiscal year were examined. Out of the 12 selections only 4 deposits had backup documentation and those 4 were not properly recorded. The other 8 were lacking proof that deposits were recorded properly. Repeat Finding: This is a repeat finding of 2021-006. Recommendation: It is recommended that the Town adopt a cash management policy that follows the Uniform Guidance and that the Town implement 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.
2022-001 ? Housing Quality Standards Inspections Federal Program Information: U.S. Department of Housing and Urban Development - Housing Choice Voucher: AL - 14.871 Section 8 Housing Choice Voucher Criteria: The following CFR(s) apply to this finding: 2 CFR 200.514(c), 2 CFR section 200.305(b)(3). Condition: During audit procedures, it was identified that the Unit?s inspections were being completed but if there was a failure, re-inspections were not completed as required within the 30-day period. Cause: The Unit does not have the necessary internal controls over compliance. Effect: The Unit is not effectively reinspecting units. Identification of Questioned Costs: None identified. Context: The population of 40 tenants were examine and there was 14 that had a failed inspection with no reinspection. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit implement internal control processes and procedures to ensure that federal reimbursements requests are submitted on a timely basis. Views of Responsible Officials and Corrective Action Plan: Catherine Bowler, Director of Finance and Operations is the responsible Official and please see the Corrective Action Plan issued by the Laconia Housing and Redevelopment Authority.
2022-001 ? Housing Quality Standards Inspections Federal Program Information: U.S. Department of Housing and Urban Development - Housing Choice Voucher: AL - 14.871 Section 8 Housing Choice Voucher Criteria: The following CFR(s) apply to this finding: 2 CFR 200.514(c), 2 CFR section 200.305(b)(3). Condition: During audit procedures, it was identified that the Unit?s inspections were being completed but if there was a failure, re-inspections were not completed as required within the 30-day period. Cause: The Unit does not have the necessary internal controls over compliance. Effect: The Unit is not effectively reinspecting units. Identification of Questioned Costs: None identified. Context: The population of 40 tenants were examine and there was 14 that had a failed inspection with no reinspection. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit implement internal control processes and procedures to ensure that federal reimbursements requests are submitted on a timely basis. Views of Responsible Officials and Corrective Action Plan: Catherine Bowler, Director of Finance and Operations is the responsible Official and please see the Corrective Action Plan issued by the Laconia Housing and Redevelopment Authority.
2022-011 Timely Grant Draws Material Weakness This is a repeat finding. The prior-year’s auditing finding number is 2021-011. Condition: Grant dollars were not drawn in a timely fashion during the year to cover current grant expenditures. The Housing Authority’s grant funded cost reimbursable program was carrying in excess of 60 days operating capital in grants receivable. Concurrently, the Housing Authority’s cash and cash equivalents were insufficient to cover its unearned revenue, which totaled $1,537,125. Had the grant draws been completed in a timely manner, the cash received would have been sufficient to cover the unearned revenue. Criteria: The Housing Authority does not have written policies to address the timeliness of grant draw procedures. Grant funds should be drawn as grant expenditures occur. Carrying anything in excess of 60 days operating capital in grants receivable is considered untimely and indicates that the expenditures carried within these grant funded cost reimbursable programs are being “floated” by other funds. 2 CFR section 200.305 of the Uniform Guidance states that “For 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 whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Cause: Lack of a written grant draw policy and procedures as well as a lack of staff “hands-on” training in those necessary areas. Effect: The untimely HUD grant draws have created a significant liquidity risk and forced the Housing Authority to use its unearned revenue funds from the Department of Treasury for purposes other than their intended use. This misapplication of funds places the Housing Authority at risk of failing to meet its financial obligations and jeopardizes compliance with terms of multiple grant awards. Recommendation: The Housing Authority should adopt written grant draw policies into its financial policies and procedures manual. Financials should be reviewed monthly, and drawdowns made as needed. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: 5 H49MC00119‐21‐00 / 6 H49MC00119‐20‐01 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020‐2024 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 sixteen (16) 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: 5 H49MC00119‐21‐00 / 6 H49MC00119‐20‐01 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020‐2024 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 sixteen (16) 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 2021-010 Program: Office for Coastal Management Federal Financial Assistance Listing: 11.473 Federal Grantor: U.S. Department of Commerce Passed-through: National Fish and Wildlife Foundation Award No. and Year: 0318.19.070225 (2020) Compliance Requirements: Cash Management / Subrecipient Monitoring Type of Finding: Material Non-Compliance/Material Weakness Criteria: 2 CFR 200.305 – establishes that payment methods must minimize the time elapsing between the transfer of funds from the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer or other means. 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. Whenever possible, advance payments must be consolidated to cover anticipated cash needs for all Federal awards made by the Federal awarding agency to the recipient. Non-Federal entities must be authorized to submit requests for advance payments and reimbursements at least monthly when electronic fund transfers are not used, and as often as they like when electronic transfers are used, in accordance with the provisions of the Electronic Fund Transfer Act. Reimbursement is the preferred method when the requirements above cannot be met. Condition: We identified the following: • For amounts advanced from granting agency to CFSC, we noted $559,110 of advances were not expended timely. The expenditures were incurred (or disbursed to subrecipients) between 21 and 50 days after advanced funds were received by CFSC. • For $733,637 of pass-through payments paid by CFSC, the timing of payment to subrecipients didn’t follow a reimbursement method. The agreements allowed for funds to be advanced, with a true-up required quarterly. Funds were frequently remitted to subrecipient more than 30 days in advance of the expenditure being incurred by the subrecipient. o For 5 transactions of 9 payments to subrecipients tested, funds were provided to subrecipients prior to eligible expenditures being incurred by the subrecipient. The number of days between date funds were advanced to subrecipient, and when an eligible expenditures were completely incurred by subrecipients were as follows: 8 days - $191,830 • Time between CFSC receipt of funds (from granting agency) and subsequent remittance to subrecipient was 59 days 34 days - $195,929 • Time between CFSC receipt of funds and subsequent remittance to subrecipient was 44 days 51 days - $100,000 • Time between CFSC receipt of funds and subsequent remittance to subrecipient was 59 days 79 days - $50,000 • time between CFSC receipt of funds and subsequent remittance to subrecipient was 107 days 86 days - $195,929 • time between CFSC receipt of funds and subsequent remittance to subrecipient was 121 days Questioned Costs: Advances received of $559,110 by CFSC, and subrecipient advances paid of $733,637, as detailed under the Condition above. Context/Sampling: Sampling was not used. For advances received, we tested 6 of 6 advances. We selected all three subrecipients for testing. The condition noted above was identified during our procedures over CFSC’s subrecipient monitoring provisions. Repeat Finding from Prior Year: Yes –2020-001 Effect: CFSC did not minimize the time elapsing between receiving advances and incurring eligible expenditures, including the timing of the subrecipients incurring the related eligible expenditures. Cause: CFSC’s procedures did not consistently ensure that subrecipient agreements followed the uniform guidance requirements related to advances, nor did their policies allow for appropriately minimizing the time elapsing on advances received. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to ensure that cash management policies surrounding advances are in line with grant agreements and uniform guidance. Views of Responsible Officials and Planned Corrective Actions: See Separate 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.
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.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: 5 H49MC00119‐21‐00 / 6 H49MC00119‐20‐01 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020‐2024 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 sixteen (16) 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: 5 H49MC00119‐21‐00 / 6 H49MC00119‐20‐01 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020‐2024 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 sixteen (16) 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 2021-010 Program: Office for Coastal Management Federal Financial Assistance Listing: 11.473 Federal Grantor: U.S. Department of Commerce Passed-through: National Fish and Wildlife Foundation Award No. and Year: 0318.19.070225 (2020) Compliance Requirements: Cash Management / Subrecipient Monitoring Type of Finding: Material Non-Compliance/Material Weakness Criteria: 2 CFR 200.305 – establishes that payment methods must minimize the time elapsing between the transfer of funds from the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer or other means. 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. Whenever possible, advance payments must be consolidated to cover anticipated cash needs for all Federal awards made by the Federal awarding agency to the recipient. Non-Federal entities must be authorized to submit requests for advance payments and reimbursements at least monthly when electronic fund transfers are not used, and as often as they like when electronic transfers are used, in accordance with the provisions of the Electronic Fund Transfer Act. Reimbursement is the preferred method when the requirements above cannot be met. Condition: We identified the following: • For amounts advanced from granting agency to CFSC, we noted $559,110 of advances were not expended timely. The expenditures were incurred (or disbursed to subrecipients) between 21 and 50 days after advanced funds were received by CFSC. • For $733,637 of pass-through payments paid by CFSC, the timing of payment to subrecipients didn’t follow a reimbursement method. The agreements allowed for funds to be advanced, with a true-up required quarterly. Funds were frequently remitted to subrecipient more than 30 days in advance of the expenditure being incurred by the subrecipient. o For 5 transactions of 9 payments to subrecipients tested, funds were provided to subrecipients prior to eligible expenditures being incurred by the subrecipient. The number of days between date funds were advanced to subrecipient, and when an eligible expenditures were completely incurred by subrecipients were as follows: 8 days - $191,830 • Time between CFSC receipt of funds (from granting agency) and subsequent remittance to subrecipient was 59 days 34 days - $195,929 • Time between CFSC receipt of funds and subsequent remittance to subrecipient was 44 days 51 days - $100,000 • Time between CFSC receipt of funds and subsequent remittance to subrecipient was 59 days 79 days - $50,000 • time between CFSC receipt of funds and subsequent remittance to subrecipient was 107 days 86 days - $195,929 • time between CFSC receipt of funds and subsequent remittance to subrecipient was 121 days Questioned Costs: Advances received of $559,110 by CFSC, and subrecipient advances paid of $733,637, as detailed under the Condition above. Context/Sampling: Sampling was not used. For advances received, we tested 6 of 6 advances. We selected all three subrecipients for testing. The condition noted above was identified during our procedures over CFSC’s subrecipient monitoring provisions. Repeat Finding from Prior Year: Yes –2020-001 Effect: CFSC did not minimize the time elapsing between receiving advances and incurring eligible expenditures, including the timing of the subrecipients incurring the related eligible expenditures. Cause: CFSC’s procedures did not consistently ensure that subrecipient agreements followed the uniform guidance requirements related to advances, nor did their policies allow for appropriately minimizing the time elapsing on advances received. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to ensure that cash management policies surrounding advances are in line with grant agreements and uniform guidance. Views of Responsible Officials and Planned Corrective Actions: See Separate 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.
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.