Condition: The Organization’s written policies and procedures related to financial management and procurement do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Organization is required to have a written financial management policy. Additionally, according to 2 CFR Section 200.317 – 200.326, the Organization is required to have a written procurement policy. Cause: The Organization was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: Yes Questioned Costs: None reported Recommendation: We recommend that the Organization update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor’s finding and will update the Organization’s written policies and procedures for the Uniform Guidance requirements.
Condition: The Organization’s written policies and procedures related to financial management and procurement do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Organization is required to have a written financial management policy. Additionally, according to 2 CFR Section 200.317 – 200.326, the Organization is required to have a written procurement policy. Cause: The Organization was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: Yes Questioned Costs: None reported Recommendation: We recommend that the Organization update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor’s finding and will update the Organization’s written policies and procedures for the Uniform Guidance requirements.
Finding 2024-004: Unallowable Costs / Cash Management (Material Weakness) Information on the Federal Programs: Assistance Listing Number 98.001 Criteria: According to Uniform Guidance (2 CFR 200.305(b)), Federal funds must be managed in a way that minimizes the time elapsing between the transfer of funds and the Organization’s disbursement of those funds for program purposes. Additionally, internal controls over cash management should ensure that all drawdowns are approved by designated personnel to prevent improper or premature use of Federal funds. Furthermore, per 2 CFR 200.414(c), indirect costs may only be charged to a Federal program if an approved indirect cost rate or a direct cost allocation methodology is in place and if the Federal award allows for indirect cost recovery. Condition: During our review of Federal grant drawdowns, it was noted that several drawdowns were processed without obtaining the required internal approvals as outlined in Astraea's cash management policies and procedures. We also noted that several draws included indirect costs, despite the Federal award agreement explicitly prohibiting indirect cost recovery. While these costs were later removed and ultimately not charged to the Federal program, their inclusion initially led to an overdraw of funds exceeding the program’s actual needs. Furthermore, Astraea is carrying a large refundable advance balance. Cause: Astraea’s cash management procedures were not consistently followed, leading to missed approvals for certain drawdowns and delays in fund disbursement. Additionally, the lack of approval led to errors in charging indirect costs to the program.Effect: Drawdowns without proper internal approval increase the risk of non-compliance with Federal cash management requirements and could result in unauthorized or inaccurate fund usage. Additionally, charging unallowable indirect costs to the program resulted in noncompliance with Federal regulations. Furthermore, the delay in disbursing Federal funds increases the risk of noncompliance with cash management requirements, potentially resulting in interest liability. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: Finding 2023-005 Recommendation: Astraea should reinforce cash management controls by ensuring all Federal drawdowns obtain the appropriate internal approvals before processing. This can be achieved by implementing a checklist or automated workflow to verify compliance with approval requirements. Astraea should also strengthen internal controls over cost allocation to prevent unallowable indirect charges. Additionally, we recommend Astraea implement procedures to ensure that Federal funds are disbursed promptly in accordance with 2 CFR 200.305 to avoid undue delays.
Finding 2024-001 Payment to fraudulent subrecipient account - cyber incident Repeat Finding No Federal Program Title U.S. Department of Health and Human Services 93.600 Head Start Award # 05CH012065-02-00 Award Year 9/1/2022 – 8/31/2023 Finding In connection with a cyber incident at a subrecipient, Chicago Commons Association (Commons) sent two federal fund payments to a fraudulent party acting as the subrecipient. Criteria 2 CFR 200.305 (b) describes federal payments for recipients and subrecipients other than states, whether the payment is made by electronic funds transfer or by other means. Per 2 CFR 200.516(a), the auditor must report as an audit finding various items including known or likely fraud affecting a federal award. Audit finding detail and clarity is described in the next section, 2 CFR 200.516(b), which requires specific information to be included such as “(3) The condition found, including facts that support the deficiency found in the audit finding.” Condition The design and execution of certain internal controls were not successful in preventing or detecting Commons’ payments to a bank account controlled by a fraudulent party posing as a subrecipient. This resulted from a scheme related to a cyber incident at the subrecipient. Gads Hill Center (GHC), a nonprofit after-school program located in Chicago and a subrecipient/delegate agency of Commons, was victim to a cyber incident whereby a fraudulent party was able to take control of GHC’s email and telephone systems. This fraudulent party then contacted Commons AP manager via email on August 7, 2023, posing as the GHC Chief Financial Officer. Through email communications with the Commons AP manager and VP of Finance, this fraudulent party submitted updated banking/ACH information for GHC to change their ACH information from Fifth Third Bank (the valid GHC bank account) to Truist Bank (the fraudulent party’s bank account). An email was sent from the Commons AP manager to the Commons VP of Finance to have the information updated in the system. Commons’ policies require that a request received for this type of change to be substantiated through a direct phone call to the subrecipient. The Commons AP manager called the GHC CFO (the number used was Pilsen location shown on the GHC website) but the call went unanswered (and voicemail was full). The AP manager and GHC CFO scheduled a call for the next week and the AP manager received a phone call from an identical phone number from an individual who identified himself as the GHC CFO, and completed the verification process. New banking information was then entered and approved in Commons’ primary banking partner’s system (US Bank). These emails and calls happened between August 7 and August 15, 2023. Commons received a voucher from GHC and made a $70,121.99 payment to Truist Bank on August 17, using the updated ACH information. The primary banking partner of Commons flagged this payment as potentially fraudulent because the name on the ACH payment did not match the name listed on the bank account, and contacted Commons. Commons communicated that the banking information was correct, and the payment was then released on August 22. Another GHC-submitted voucher was received, and $640,318.83 was also paid to Truist Bank on August 24, 2023. The payments were not received by GHC. GHC subsequently contacted Commons to follow up about the status of the payments due and through the ensuing discussion the payments to the fraudulent Truist Bank account were ultimately discovered. The two submitted vouchers for expenses incurred by GHC were valid, in connection with program services performed by GHC. Commons reviewed, approved and submitted the two vouchers to the U.S. Department of Health and Human Services (the funder) for reimbursement. The funder approved the expenses, funds were released to Commons and then disbursed by Commons to the Truist Bank account which management believed belonged to GHC. Commons recorded and reported revenue and expense (payment to subrecipient) for the amounts of the vouchers received and paid. Because GHC incurred the expenses but never received the reimbursement funds, GHC absorbed the loss. Cause Commons personnel had followed established processes and internal controls as intended. However, the design and execution of the controls were not successful in preventing or detecting payments to a fraudulent account. Management believes the sophistication of the fraud scheme exceeded the effectiveness of the controls. Effect The change in ACH information resulted in two Commons’ payments of federal funds totaling $710,440.82 made to a bank account controlled by the fraudulent party acting as the subrecipient. Context Chicago Commons made us aware of this matter which appears to be an isolated incident for the year ended June 30, 2024. Questioned Costs There were no known questioned costs. Recommendation We recommend that Commons strengthens its internal controls in verifying a requested bank account change. For example, the procedure can include a requirement for the phone call to be made by an individual at Commons with personal knowledge and familiarity with a specific individual at the organization requesting the change. Views of Responsible Officials Management is in agreement with this finding. See corrective action plan.
Finding No. 2024-081 Federal Awarding Agency: U.S Department of Energy, U.S. Department of Defense, National Aeronautics and Space Administration (NASA), and Department of Commerce Impact: Significant Deficiency, Noncompliance AL Number and Title: 81.049, 12.000, 43.001, 11.417 Research and Development Cluster (RDC) Federal Award Number: N/A Applicable Compliance Requirement: Cash Management Condition: Fifteen of the sampled 40 subrecipient draws, on reimbursement basis, were paid to the subrecipients beyond 30 days of when the University received the payment request. Context: During testing of subrecipient cash management, five grants from University of Alaska Fairbanks (UAF) had fifteen observed instances of individual payments requests from the subrecipient were received by UAF and not disbursed to the subrecipient within the allowable thirty days. Cause: UAF did not process payment requests from the subrecipients timely. 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 2 CFR 180.300 nonfederal entities entering into a covered transaction are required to verify the entity whom they intend to do business with are not excluded or disqualified. Effect: Subrecipients on federal awards do not receive timely payment for federal contract work. Questioned Costs: None Recommendation: UAF management should work to develop policies and procedures to allow for more timely payment to subrecipients for work the University contracts them to perform. Views of Responsible Officials: Management agrees with this finding.
Finding No. 2024-081 Federal Awarding Agency: U.S Department of Energy, U.S. Department of Defense, National Aeronautics and Space Administration (NASA), and Department of Commerce Impact: Significant Deficiency, Noncompliance AL Number and Title: 81.049, 12.000, 43.001, 11.417 Research and Development Cluster (RDC) Federal Award Number: N/A Applicable Compliance Requirement: Cash Management Condition: Fifteen of the sampled 40 subrecipient draws, on reimbursement basis, were paid to the subrecipients beyond 30 days of when the University received the payment request. Context: During testing of subrecipient cash management, five grants from University of Alaska Fairbanks (UAF) had fifteen observed instances of individual payments requests from the subrecipient were received by UAF and not disbursed to the subrecipient within the allowable thirty days. Cause: UAF did not process payment requests from the subrecipients timely. 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 2 CFR 180.300 nonfederal entities entering into a covered transaction are required to verify the entity whom they intend to do business with are not excluded or disqualified. Effect: Subrecipients on federal awards do not receive timely payment for federal contract work. Questioned Costs: None Recommendation: UAF management should work to develop policies and procedures to allow for more timely payment to subrecipients for work the University contracts them to perform. Views of Responsible Officials: Management agrees with this finding.
Finding No. 2024-081 Federal Awarding Agency: U.S Department of Energy, U.S. Department of Defense, National Aeronautics and Space Administration (NASA), and Department of Commerce Impact: Significant Deficiency, Noncompliance AL Number and Title: 81.049, 12.000, 43.001, 11.417 Research and Development Cluster (RDC) Federal Award Number: N/A Applicable Compliance Requirement: Cash Management Condition: Fifteen of the sampled 40 subrecipient draws, on reimbursement basis, were paid to the subrecipients beyond 30 days of when the University received the payment request. Context: During testing of subrecipient cash management, five grants from University of Alaska Fairbanks (UAF) had fifteen observed instances of individual payments requests from the subrecipient were received by UAF and not disbursed to the subrecipient within the allowable thirty days. Cause: UAF did not process payment requests from the subrecipients timely. 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 2 CFR 180.300 nonfederal entities entering into a covered transaction are required to verify the entity whom they intend to do business with are not excluded or disqualified. Effect: Subrecipients on federal awards do not receive timely payment for federal contract work. Questioned Costs: None Recommendation: UAF management should work to develop policies and procedures to allow for more timely payment to subrecipients for work the University contracts them to perform. Views of Responsible Officials: Management agrees with this finding.
Criteria or Specific Requirement: In accordance with 2 CFR 200.305(b), when entities are on a cost reimbursement basis, payments must be requested only for allowable costs already incurred, and such requests should be made in a timely manner to avoid cash flow issues and ensure proper stewardship of federal funds. Condition and Context: During our testing, we determined that Solvista Health incurred allowable expenditures under the federal awards but did not submit claims for reimbursement in a timely manner. Specifically, expenditures were recorded and reported internally, but Solvista Health did not initiate the cost reimbursement requests in accordance with the timing of those expenditures. Questioned Costs: N/A Cause: Solvista Health lacks sufficient oversight or adequate internal controls to ensure timely submission of reimbursement requests corresponding with incurred expenditures. Effect: Failure to request reimbursement in a timely manner can impair cash flow, result in underutilization of available federal funds within the grant period, and indicate noncompliance with requirements under Uniform Guidance. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Solvista Health implement formal procedures as well as assign an individual responsible for submitting reimbursement requests on a regular and timely basis after expenditures are incurred. This will promote compliance with federal requirements and ensure Solvista Health benefits fully from available federal grant funding.
Criteria or Specific Requirement: In accordance with 2 CFR 200.305(b), when entities are on a cost reimbursement basis, payments must be requested only for allowable costs already incurred, and such requests should be made in a timely manner to avoid cash flow issues and ensure proper stewardship of federal funds. Condition and Context: During our testing, we determined that Solvista Health incurred allowable expenditures under the federal awards but did not submit claims for reimbursement in a timely manner. Specifically, expenditures were recorded and reported internally, but Solvista Health did not initiate the cost reimbursement requests in accordance with the timing of those expenditures. Questioned Costs: N/A Cause: Solvista Health lacks sufficient oversight or adequate internal controls to ensure timely submission of reimbursement requests corresponding with incurred expenditures. Effect: Failure to request reimbursement in a timely manner can impair cash flow, result in underutilization of available federal funds within the grant period, and indicate noncompliance with requirements under Uniform Guidance. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Solvista Health implement formal procedures as well as assign an individual responsible for submitting reimbursement requests on a regular and timely basis after expenditures are incurred. This will promote compliance with federal requirements and ensure Solvista Health benefits fully from available federal grant funding.
Criteria or Specific Requirement: In accordance with 2 CFR 200.305(b), when entities are on a cost reimbursement basis, payments must be requested only for allowable costs already incurred, and such requests should be made in a timely manner to avoid cash flow issues and ensure proper stewardship of federal funds. Condition and Context: During our testing, we determined that Solvista Health incurred allowable expenditures under the federal awards but did not submit claims for reimbursement in a timely manner. Specifically, expenditures were recorded and reported internally, but Solvista Health did not initiate the cost reimbursement requests in accordance with the timing of those expenditures. Questioned Costs: N/A Cause: Solvista Health lacks sufficient oversight or adequate internal controls to ensure timely submission of reimbursement requests corresponding with incurred expenditures. Effect: Failure to request reimbursement in a timely manner can impair cash flow, result in underutilization of available federal funds within the grant period, and indicate noncompliance with requirements under Uniform Guidance. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Solvista Health implement formal procedures as well as assign an individual responsible for submitting reimbursement requests on a regular and timely basis after expenditures are incurred. This will promote compliance with federal requirements and ensure Solvista Health benefits fully from available federal grant funding.
Criteria or Specific Requirement: In accordance with 2 CFR 200.305(b), when entities are on a cost reimbursement basis, payments must be requested only for allowable costs already incurred, and such requests should be made in a timely manner to avoid cash flow issues and ensure proper stewardship of federal funds. Condition and Context: During our testing, we determined that Solvista Health incurred allowable expenditures under the federal awards but did not submit claims for reimbursement in a timely manner. Specifically, expenditures were recorded and reported internally, but Solvista Health did not initiate the cost reimbursement requests in accordance with the timing of those expenditures. Questioned Costs: N/A Cause: Solvista Health lacks sufficient oversight or adequate internal controls to ensure timely submission of reimbursement requests corresponding with incurred expenditures. Effect: Failure to request reimbursement in a timely manner can impair cash flow, result in underutilization of available federal funds within the grant period, and indicate noncompliance with requirements under Uniform Guidance. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Solvista Health implement formal procedures as well as assign an individual responsible for submitting reimbursement requests on a regular and timely basis after expenditures are incurred. This will promote compliance with federal requirements and ensure Solvista Health benefits fully from available federal grant funding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS00109-22; H80CS00109-23 Award Period: May 1, 2023 – April 30, 2024; May 1, 2024 – April 30, 2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.305(b)(1) requires that recipients of federal funds maintain both written procedures that minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient, and financial management systems that meet the standards for fund control and accountability. Furthermore, 2 CFR 200.303 indicates the non-Federal entity must: (a) Establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization did not maintain timely documentation to support an independent review and approval of the drawdowns prior the drawdown occurring. Questioned costs: None Context: This condition occurred in two (2) of six (6) transactions selected for testing. Cause: Turnover in key positions within the finance department. Effect: Drawdowns may occur for the incorrect amount, for the wrong period and for costs that may not have been incurred as of yet. Repeat Finding: No. Recommendation: We recommend management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented with supporting documentation retained for the revised internal control. Views of responsible officials: There is no disagreement with this finding.
Federal Transit Cluster – Cash Management Noncompliance and Significant Deficiency in Internal Control ALN’s 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: In accordance with 2 CFR § 200.305(b), when advance payments are made, they must be limited to the minimum amounts needed and timed to the actual, immediate cash requirements of the recipient. The Federal Transit Administration (FTA) further clarifies that federal funds drawn in advance must be disbursed within three business days to comply with this requirement. This standard is intended to minimize the time elapsing between the transfer of funds and disbursement. Condition: The Authority drew down federal funds in advance of allowable expenditures and did not disburse the federal funds within the required three business days. Cause: The Authority did not have adequate internal controls in place to ensure that federal funds were drawn only after costs had been incurred or that disbursements occurred within the required timeframe. Effect: As a result of the noncompliance, the Authority was required to repay $251,630 to the FTA. Questioned Costs: $251,630 drawn down in excess of the immediate need. Context: For one drawdown in a sample of seven, the Authority drew down funds to be used for preventative maintenance costs during the month during the preceding month. As a result, the Authority held the funds until there were sufficient qualifying expenditures, which was for a time period in excess of three business days. Recommendation: We recommend that the Authority strengthen its internal controls over cash management to ensure that federal funds are drawn only after expenditures have been incurred or that disbursements are made within three business days of receipt if drawn in advance. Staff should be trained on federal cash management requirements, and drawdown procedures should be reviewed and updated accordingly. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Cash Management Noncompliance and Significant Deficiency in Internal Control ALN’s 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: In accordance with 2 CFR § 200.305(b), when advance payments are made, they must be limited to the minimum amounts needed and timed to the actual, immediate cash requirements of the recipient. The Federal Transit Administration (FTA) further clarifies that federal funds drawn in advance must be disbursed within three business days to comply with this requirement. This standard is intended to minimize the time elapsing between the transfer of funds and disbursement. Condition: The Authority drew down federal funds in advance of allowable expenditures and did not disburse the federal funds within the required three business days. Cause: The Authority did not have adequate internal controls in place to ensure that federal funds were drawn only after costs had been incurred or that disbursements occurred within the required timeframe. Effect: As a result of the noncompliance, the Authority was required to repay $251,630 to the FTA. Questioned Costs: $251,630 drawn down in excess of the immediate need. Context: For one drawdown in a sample of seven, the Authority drew down funds to be used for preventative maintenance costs during the month during the preceding month. As a result, the Authority held the funds until there were sufficient qualifying expenditures, which was for a time period in excess of three business days. Recommendation: We recommend that the Authority strengthen its internal controls over cash management to ensure that federal funds are drawn only after expenditures have been incurred or that disbursements are made within three business days of receipt if drawn in advance. Staff should be trained on federal cash management requirements, and drawdown procedures should be reviewed and updated accordingly. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Cash Management Noncompliance and Significant Deficiency in Internal Control ALN’s 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: In accordance with 2 CFR § 200.305(b), when advance payments are made, they must be limited to the minimum amounts needed and timed to the actual, immediate cash requirements of the recipient. The Federal Transit Administration (FTA) further clarifies that federal funds drawn in advance must be disbursed within three business days to comply with this requirement. This standard is intended to minimize the time elapsing between the transfer of funds and disbursement. Condition: The Authority drew down federal funds in advance of allowable expenditures and did not disburse the federal funds within the required three business days. Cause: The Authority did not have adequate internal controls in place to ensure that federal funds were drawn only after costs had been incurred or that disbursements occurred within the required timeframe. Effect: As a result of the noncompliance, the Authority was required to repay $251,630 to the FTA. Questioned Costs: $251,630 drawn down in excess of the immediate need. Context: For one drawdown in a sample of seven, the Authority drew down funds to be used for preventative maintenance costs during the month during the preceding month. As a result, the Authority held the funds until there were sufficient qualifying expenditures, which was for a time period in excess of three business days. Recommendation: We recommend that the Authority strengthen its internal controls over cash management to ensure that federal funds are drawn only after expenditures have been incurred or that disbursements are made within three business days of receipt if drawn in advance. Staff should be trained on federal cash management requirements, and drawdown procedures should be reviewed and updated accordingly. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Cash Management Noncompliance and Significant Deficiency in Internal Control ALN’s 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: In accordance with 2 CFR § 200.305(b), when advance payments are made, they must be limited to the minimum amounts needed and timed to the actual, immediate cash requirements of the recipient. The Federal Transit Administration (FTA) further clarifies that federal funds drawn in advance must be disbursed within three business days to comply with this requirement. This standard is intended to minimize the time elapsing between the transfer of funds and disbursement. Condition: The Authority drew down federal funds in advance of allowable expenditures and did not disburse the federal funds within the required three business days. Cause: The Authority did not have adequate internal controls in place to ensure that federal funds were drawn only after costs had been incurred or that disbursements occurred within the required timeframe. Effect: As a result of the noncompliance, the Authority was required to repay $251,630 to the FTA. Questioned Costs: $251,630 drawn down in excess of the immediate need. Context: For one drawdown in a sample of seven, the Authority drew down funds to be used for preventative maintenance costs during the month during the preceding month. As a result, the Authority held the funds until there were sufficient qualifying expenditures, which was for a time period in excess of three business days. Recommendation: We recommend that the Authority strengthen its internal controls over cash management to ensure that federal funds are drawn only after expenditures have been incurred or that disbursements are made within three business days of receipt if drawn in advance. Staff should be trained on federal cash management requirements, and drawdown procedures should be reviewed and updated accordingly. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Cash Management Noncompliance and Significant Deficiency in Internal Control ALN’s 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: In accordance with 2 CFR § 200.305(b), when advance payments are made, they must be limited to the minimum amounts needed and timed to the actual, immediate cash requirements of the recipient. The Federal Transit Administration (FTA) further clarifies that federal funds drawn in advance must be disbursed within three business days to comply with this requirement. This standard is intended to minimize the time elapsing between the transfer of funds and disbursement. Condition: The Authority drew down federal funds in advance of allowable expenditures and did not disburse the federal funds within the required three business days. Cause: The Authority did not have adequate internal controls in place to ensure that federal funds were drawn only after costs had been incurred or that disbursements occurred within the required timeframe. Effect: As a result of the noncompliance, the Authority was required to repay $251,630 to the FTA. Questioned Costs: $251,630 drawn down in excess of the immediate need. Context: For one drawdown in a sample of seven, the Authority drew down funds to be used for preventative maintenance costs during the month during the preceding month. As a result, the Authority held the funds until there were sufficient qualifying expenditures, which was for a time period in excess of three business days. Recommendation: We recommend that the Authority strengthen its internal controls over cash management to ensure that federal funds are drawn only after expenditures have been incurred or that disbursements are made within three business days of receipt if drawn in advance. Staff should be trained on federal cash management requirements, and drawdown procedures should be reviewed and updated accordingly. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Cash Management Noncompliance and Significant Deficiency in Internal Control ALN’s 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: In accordance with 2 CFR § 200.305(b), when advance payments are made, they must be limited to the minimum amounts needed and timed to the actual, immediate cash requirements of the recipient. The Federal Transit Administration (FTA) further clarifies that federal funds drawn in advance must be disbursed within three business days to comply with this requirement. This standard is intended to minimize the time elapsing between the transfer of funds and disbursement. Condition: The Authority drew down federal funds in advance of allowable expenditures and did not disburse the federal funds within the required three business days. Cause: The Authority did not have adequate internal controls in place to ensure that federal funds were drawn only after costs had been incurred or that disbursements occurred within the required timeframe. Effect: As a result of the noncompliance, the Authority was required to repay $251,630 to the FTA. Questioned Costs: $251,630 drawn down in excess of the immediate need. Context: For one drawdown in a sample of seven, the Authority drew down funds to be used for preventative maintenance costs during the month during the preceding month. As a result, the Authority held the funds until there were sufficient qualifying expenditures, which was for a time period in excess of three business days. Recommendation: We recommend that the Authority strengthen its internal controls over cash management to ensure that federal funds are drawn only after expenditures have been incurred or that disbursements are made within three business days of receipt if drawn in advance. Staff should be trained on federal cash management requirements, and drawdown procedures should be reviewed and updated accordingly. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Cash Management Noncompliance and Significant Deficiency in Internal Control ALN’s 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: In accordance with 2 CFR § 200.305(b), when advance payments are made, they must be limited to the minimum amounts needed and timed to the actual, immediate cash requirements of the recipient. The Federal Transit Administration (FTA) further clarifies that federal funds drawn in advance must be disbursed within three business days to comply with this requirement. This standard is intended to minimize the time elapsing between the transfer of funds and disbursement. Condition: The Authority drew down federal funds in advance of allowable expenditures and did not disburse the federal funds within the required three business days. Cause: The Authority did not have adequate internal controls in place to ensure that federal funds were drawn only after costs had been incurred or that disbursements occurred within the required timeframe. Effect: As a result of the noncompliance, the Authority was required to repay $251,630 to the FTA. Questioned Costs: $251,630 drawn down in excess of the immediate need. Context: For one drawdown in a sample of seven, the Authority drew down funds to be used for preventative maintenance costs during the month during the preceding month. As a result, the Authority held the funds until there were sufficient qualifying expenditures, which was for a time period in excess of three business days. Recommendation: We recommend that the Authority strengthen its internal controls over cash management to ensure that federal funds are drawn only after expenditures have been incurred or that disbursements are made within three business days of receipt if drawn in advance. Staff should be trained on federal cash management requirements, and drawdown procedures should be reviewed and updated accordingly. Views of Responsible Officials: See Corrective Action Plan
Finding 2024.003: Cash Management - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Substance Abuse and Mental Health Services Projects of Regional and National Significance Certified Community Behavioral Health Clinic Expansion Grants Federal Assistance Listing Number: 93.243 and 93.696 Federal Award Identification Number and Year: H79SM087223 - 2024, H79SM086969 - 2024 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 relating to these major programs. We noted there was no formal approval or evidence of review for these drawdowns Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials and Planned Corrective Actions 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 2024.003: Cash Management - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Substance Abuse and Mental Health Services Projects of Regional and National Significance Certified Community Behavioral Health Clinic Expansion Grants Federal Assistance Listing Number: 93.243 and 93.696 Federal Award Identification Number and Year: H79SM087223 - 2024, H79SM086969 - 2024 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 relating to these major programs. We noted there was no formal approval or evidence of review for these drawdowns Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials and Planned Corrective Actions 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 2024.003: Cash Management - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Substance Abuse and Mental Health Services Projects of Regional and National Significance Certified Community Behavioral Health Clinic Expansion Grants Federal Assistance Listing Number: 93.243 and 93.696 Federal Award Identification Number and Year: H79SM087223 - 2024, H79SM086969 - 2024 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 relating to these major programs. We noted there was no formal approval or evidence of review for these drawdowns Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials and Planned Corrective Actions 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.
2024-001 Payment Timing Requirements Criteria: 2 CFR §200.305(b) requires payments methods must minimize the time elapsing between the transfer of funds from the federal agency and the disbursement of funds and that recipients must make timely payments to contractors in accordance with contract provisions. Condition: Instances were identified where subcontractors were not reimbursed in a timely manner. Recommendation: We recommend that the Organization make all necessary efforts to decrease the amount of time that passes between when funds are received and when subcontractors are reimbursed. Views of Responsible Officials and Planned Corrective Actions: HSNY was unable to submit monthly claims for their primary grant due to delays with New York State Office of Temporary and Disability Assistance (OTDA) drafting and approving a contract for the period. While OTDA approved appropriation of the funds to HSNY, without a contract in place, HSNY was unable to submit claims for payment for the period through June 30, 2024 until the contract was approved in May 2025. Changes to the submittal process implemented by OTDA also delayed HSNY’s ability to submit claims for approval. This had a detrimental impact to cash flow as operating costs needed to be paid during this period. With the approval of the contract and efforts being made at OTDA to expedite payment, HSNY’s cash flow position has since improved and reimbursements to subcontractors as of the audit date are being made timely.
2024-003 FEMA Working Capital Advances (NOT A MAJOR PROGRAM) Compliance Requirement Cash Management Category Material Weakness in Internal Control and Material Noncompliance ALN 97.036 Program Disaster Grants - Public Assistance (Presidentially Declared Disasters) Federal Agency US Department of Homeland Security Criteria Per 2 CFR §200.305(b)(1), when advances are made by a pass-through entity, the non-federal entity must maintain procedures to minimize the time elapsing between the receipt of federal funds and their disbursement for program purposes. Funds must be disbursed timely and only to meet immediate cash needs. Condition The Authority received FEMA Working Capital Advances through the pass-through entity, Central Office for Recovery, Reconstruction and Resiliency of Puerto Rico (COR3). As of the date of this review, the funds have remained in the Authority’s bank account for over 365 days without being expended. This prolonged retention violates federal cash management requirements under the Uniform Guidance. Cause The Authority lacks sufficient back-office personnel to effectively manage and track federal funds, as well as in-house project managers with the engineering and architectural expertise necessary to efficiently execute the projects tied to the FEMA advances. Additionally, the Authority does not have adequate internal controls or segregation of duties in place to ensure compliance with FEMA program requirements and federal cash management standards. These deficiencies have contributed to delays in project implementation and the prolonged retention of federal funds. Effect The retention of federal funds for over 365 days without use constitutes noncompliance with the cash management requirements of Uniform Guidance. This may result in increased scrutiny, potential repayment obligations, and administrative burden for both the subrecipient and the pass-through entity. Questioned Costs Amount in process to be returned, $8,090,354. Recommendation We recommend that the Authority strengthen its internal controls over cash management by updating its written procedures to ensure that federal advances are disbursed based on immediate cash needs, in accordance with 2 CFR §200.305(b). The Authority should implement a cash flow forecasting process to support the timing and amount of advances, assign responsibility to specific personnel for monitoring the aging and use of federal funds, and conduct periodic internal reviews to identify and address delays in fund disbursement. Additionally, staff involved in the management of federal funds should receive training on applicable cash management requirements under Uniform Guidance to ensure consistent compliance. Views of Responsible Official (Unaudited) Refer to Corrective Action Plan.
2024-005 Delayed Requests for Reimbursement of Federal Funds Compliance Requirement Cash Management Category Material Weakness in Internal Control and Material Noncompliance ALN 12.607 Program Community Economic Adjustment of Establishment, Expansion, Realignment, or Closure of a Military Installation Federal Agency US Department of Defense Criteria Per 2 CFR §200.305(b) of the Uniform Guidance, when entities are funded on a reimbursement basis, they must submit payment requests in a timely manner after incurring eligible costs to ensure proper cash management and compliance with federal requirements. Condition During our review of the Authority’s grant management practices, we noted that requests for reimbursement of federal funds under the cost reimbursement method were delayed by approximately five to seven months after the incurrence of eligible expenditures. Cause The delay appears to be due to internal administrative inefficiencies and a lack of timely coordination between program and finance personnel responsible for grant reporting and fund drawdowns. Effect Delays in requesting reimbursement may result in cash flow constraints for the entity and could potentially impact program operations. Additionally, such delays may be viewed as noncompliance with federal grant management standards, which require timely and accurate reporting and drawdown of funds. Questioned Costs None. Recommendation We recommend that the Authority implement procedures to ensure reimbursement requests are submitted within a reasonable timeframe following the incurrence of costs, typically within 30 days, depending on the Authority's internal disbursement cycle and cash flow needs. Recommended actions include establishing internal deadlines, improving interdepartmental coordination, and conducting periodic reviews of outstanding expenditures eligible for reimbursement. Views of Responsible Official (Unaudited) Refer to Corrective Action Plan
Finding 2024-003 - Material Weakness in Internal Control over Compliance and Material Noncompliance (Qualified Opinion) - Inadequate Tracking of Expenditures and Retention of Documentation: Activities Allowed or Unallowed: Allowable Costs/Cost Principles and Reporting (A/B/L) for Assistance Listing Number 19.510 and 93.567 Criteria: The Code of Federal Regulations (CFR) Section 200.510(b) states in part, “The auditee must also prepare a schedule of federal expenditures for the period covered by the auditee’s consolidated financial statements which must include the total Federal awards expended as determined in accordance with 200.502.” Also, in accordance with CFR Section 200.302(b) - Financial Management, the auditees financial management system must provide 1) identification of all federal awards received and expended; 2) accurate, current, and complete disclosure of the financial results of each federal award or program; 3) records that identify adequately the source and application of funds for federally‐funded activities; 4) effective control over, and accountability for, all funds, property, and other assets; 5) comparison of expenditures with budget amounts for each Federal award; 6) written procedures to implement the requirements of section 200.305 and; 7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the Federal award. Recipients of federal awards must submit accurate, complete and timely financial and performance reports. The Organization should have internal controls designed to ensure compliance with those provisions. The Organization should retain sufficient documentation such as invoice and allocation support for expenditures to retain documentation for audit purposes. Condition: During detail testing of expenditures, it was noted that the Organization did not maintain adequate documentation to support how certain costs were allocated to the federal program. Several transactions lacked sufficient detail, such as invoice or expense reimbursement form. Several expenditures selected for testing did not obtain sufficient approval by an individual at the Organization. There was one instance of employee compensation being processed at an approved pay rate and the Center could not provide any supporting documentation such as an offer letter, to substantiate the rate paid. It was noted that quarterly reports provided to the federal program were not reviewed by an individual at the Organization prior to submission to ensure accurate report of expenditures. 2 of the 8 monthly reports sampled were not submitted timely to the grantor. Cause: The Organization does not have an adequate system in place to ensure quarterly reports have sufficient supporting documentation, proper approval/review, and accurate reporting prior to submission. Responsibilities for expenditure tracking were not clearly assigned, and there was no formal review process in place. The Organization is not following their Document Retention Policy. Effect: The effect of this condition increases the possibility that quarterly financial reports are misstated or inaccurate and increase the risk of noncompliance with federal requirements. The effect of this condition also increases the risk that expenditures are unallowable per the grant, federal regulations, or cost principles due to the insufficient support of proper approval retained. Questioned costs: None Repeat Finding: Yes - 2023-003 Recommendation: Policies and procedures should be in place to ensure quarterly financial reports are properly supported, accurately reported, and adequately approved and reviewed. A formal review process should be established to ensure compliance. The Organization should follow the Document Retention Policy that was put in place and required by law and submit the required reporting documentation timely to the grantor to ensure compliance. Views of Responsible Officials: Management agrees with this finding and their response is included in the Corrective Action Plan.
2024-001 – Cash Management Federal Agency: U.S. Department of Education Federal Program: Arts in Education Federal Assistance Listing Number: 84.351A Pass-through Entity: Not applicable. Award Identification Number: S351A210115 Year: 2023 and 2024 Criteria: 2 CFR 200.305 requires recipients and subrecipients to minimize the time elapsing between receipt of federal funds and disbursement, ensuring advance payments are limited to the minimum needed and timed to actual, immediate cash requirements for program or project costs. Additionally, 2 CFR 200.303 requires non-Federal entities to maintain effective internal controls over Federal awards to ensure compliance with Federal laws, regulations, and award terms. Condition: During our audit, we noted instances whereby the basis for the funds drawn down from the G6 system were unsupported. Context: This issue appears to be recurring, as several drawdowns over multiple months exceeded actual expenses and were not identified through the Organization’s internal controls. During the audit period, 100% of drawdowns were tested, with cumulative drawdowns exceeding actual expenses by $260,490 out of $1,118,922 total drawdowns at year-end. Cause: Internal controls were not in place to ensure an accurate basis for drawdowns. Effect: The failure to maintain supporting documentation for draw requests could result in drawing funds in excess of actual expenses incurred. Questioned Costs: Known questioned costs are $260,490, calculated as the excess of cumulative federal drawdowns over allowable program expenses as of June 30, 2024. Repeat Finding: Yes Recommendation: We recommend that the Organization implement procedures to ensure that federal drawdowns are based on allowable program expenditures and are supported by general ledger reports of expenses incurred on the Federal program. Staff responsible for drawdowns should receive training on federal cash management requirements. Views of Responsible Officials: See Corrective Action Plan.
Federal Agency: Major Program- U.S. Department of Health and Human Services. Other Program- U.S. Department of Justice Context: We noted through our testing of drawdowns and related expenses that as of June 30, 2024 Mazzoni Center had drawn down $53,675 more funds than it had expended on the contract for Assistance Listing No. 93.939 HIV Prevention Activities. It was also identified that $66,629 of funds were drawn down in excess of funds expended for Assistance Listing No. 16.889 Grants for Outreach and Services to Underserved Populations which was not deemed to be a major program. The individual drawing down funds from the federal agencies did not draw down funds based on the expenses incurred each month. Cause: The entity lacked effective internal controls to reconcile actual drawdowns with expenditures incurred. Effect: This deficiency resulted in noncompliance with federal cash management requirements and exposed the entity to potential interest liabilities and reputational risk. It also indicates a reasonable possibility that material noncompliance with federal requirements may not be prevented or detected and corrected on a timely basis. Repeat finding: No Recommendation: We recommend that management ensure drawdowns are strictly aligned with incurred and allowable expenses. This should include: • Pre-drawdown verification of expense documentation. • Monthly reconciliations of drawdown activity to actual expenditures. • Training for staff involved in federal fund management on Uniform Guidance requirements. Views of responsible officials: There is no disagreement with the audit finding. See Corrective Action Plan. Federal Program Name: Major Program- HIV Prevention Activities: Non-Governmental Organization Based. Other Program- Grants for Outreach and Services to Underserved Populations Assistance Listing Number: Major Program- 93.939. Other Program- 16.889 Federal Award Identification Number: Major Program- NU65PS923746. Other Program- 15JOVW-22-GG-00404-UNDE Award Period: Major Program- July 1, 2023 through June 30, 2024. Other Program October 1, 2023 through September 30, 2024. Type of Finding: Material Weakness in Internal Control over Compliance and Compliance - Cash Management Criteria or specific requirement: Per the Uniform Guidance (2 CFR §200.305), non-federal entities must minimize the time between the transfer of funds from the U.S. Treasury and the disbursement for program purposes. Drawdowns must be based on immediate cash needs and supported by incurred expenses. Condition: During the audit of federal program compliance, it was identified that the entity drew down federal funds in excess of the amounts incurred for allowable expenses. Specifically, cash management procedures did not ensure that funds drawn down were limited to actual expenditures incurred, resulting in excess cash balances held temporarily beyond the allowable timeframe. Questioned costs: Major Program- $53,675. Other Program- $66,629 Context: We noted through our testing of drawdowns and related expenses that as of June 30, 2024 Mazzoni Center had drawn down $53,675 more funds than it had expended on the contract for Assistance Listing No. 93.939 HIV Prevention Activities. It was also identified that $66,629 of funds were drawn down in excess of funds expended for Assistance Listing No. 16.889 Grants for Outreach and Services to Underserved Populations which was not deemed to be a major program. The individual drawing down funds from the federal agencies did not draw down funds based on the expenses incurred each month. Cause: The entity lacked effective internal controls to reconcile actual drawdowns with expenditures incurred. Effect: This deficiency resulted in noncompliance with federal cash management requirements and exposed the entity to potential interest liabilities and reputational risk. It also indicates a reasonable possibility that material noncompliance with federal requirements may not be prevented or detected and corrected on a timely basis. Repeat finding: No Recommendation: We recommend that management ensure drawdowns are strictly aligned with incurred and allowable expenses. This should include: • Pre-drawdown verification of expense documentation. • Monthly reconciliations of drawdown activity to actual expenditures. • Training for staff involved in federal fund management on Uniform Guidance requirements. Views of responsible officials: There is no disagreement with the audit finding. See Corrective Action Plan.
Assistance Listing Number(s): 17.258, 17.259, 17.278 Name of Federal Program or Cluster: WIOA Cluster Name of Federal Agency: Department of Labor Name of Pass-through Entity: Wisconsin Department of Workforce Development Award Period: July 1, 2023 through June 30, 2024 Criteria: Under 2 CFR Part 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Funds should be drawn down only as needed to meet immediate cash requirements. Condition: The Organization drew down federal funds in advance of immediate cash needs, resulting in excess cash balances being held for extended periods. Cause: The Organization has controls over draws of federal awards but the controls were not followed. Effect or Potential Effect: Holding excess federal funds for extended periods can result in non-compliance with federal regulations and could potentially increase the risk of mismanagement or misuse of funds. Recommendation: We recommend the Organization revise federal award draw procedures to ensure compliance with cash management requirements. Such draws should be made for immediate cash needs. Views of Responsible Officials: The Organization agrees with the finding and is implementing procedures.
Finding 2024-002: Reportable finding considered a material weakness - Cash Management Program Name: Environmental and Scientific Partnerships and Programs Assistance Listing: 19.017 Federal Awarding Agency: US Department of State Federal Award Number: SAQMIP22CA0082 Pass-through Entity: N/A - Direct Award Pass-through Entity Award Number: N/A Criteria: Federal regulations under 2 CFR §200.305 require recipients of Federal awards to maintain written procedures that minimize the time between the receipt and disbursement of Federal funds, to deposit advance payments in interest-bearing accounts when applicable, and to remit interest earned in excess of $500 annually to the Federal government. Entities are also required to have adequate internal controls to ensure that drawdown and reimbursement requests are properly reviewed, approved, and supported by allowable expenditures. Condition: Two instances were identified in which advance funds were not disbursed within a reasonable period after receipt. In both cases, the funds were not maintained in an interest-bearing account. Additionally, reimbursement requests lacked secondary approval and were not supported by detailed underlying expenditures at the time of submission. Cause: The Foundation had not established formal written procedures for managing Federal cash advances. The absence of defined processes and review controls contributed to delays in disbursement, lack of supporting documentation, and noncompliance with the interest-bearing account requirements. Effect: The absence of formal written procedures and consistent oversight increases the risk that Federal cash-management requirements may not be fully met. Without clear guidance and monitoring, the organization may be unable to demonstrate that advances are disbursed timely, maintained appropriately, and supported by sufficient documentation. This condition reflects a deficiency in internal control over compliance rather than a material impact on the financial statements or program expenditures. Repeat Finding: This is not a repeat finding. Questioned Costs: $592.97, representing the estimated interest that should have been remitted to the Federal agency. Perspective: While the transactions noted represent a limited portion of total Federal expenditures tested, the frequency and nature of the exceptions indicate that the issue is systemic rather than isolated. Although the related dollar amounts are not significant in the context of overall Federal program expenditures, the underlying control weaknesses increase the risk of future noncompliance if not addressed. Recommendation: - It is recommended that the Foundation: 1. Develop and implement written cash-management procedures that comply with Federal regulations. 2. Ensure that advance funds are disbursed timely and only as needed to meet immediate program cash requirements. 3. Maintain advance funds in interest-bearing accounts unless an exemption applies. 4. Establish a formal review and approval process for drawdown and reimbursement requests, supported by detailed documentation. 5. Remit any interest earned in excess of $500 annually to the appropriate Federal payment system. Management's response and corrective action plan (unaudited): See corrective action plan.
2024 – 018 – HEERF Cash Management Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR §200.305 – Federal Payment: Requires that payment methods minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Advance payments must be limited to the minimum amounts needed and timed to meet actual, immediate cash requirements for program costs. HEERF Program Guidance: Institutions must not draw down funds in excess of immediate needs and should avoid accumulating excess cash on hand. Interest earned on excess cash over $250 per year must be remitted to the federal government. Condition: The University drew down Higher Education Emergency Relief Fund (HEERF) funds before incurring the related program expenditures. Federal regulations require that these drawdowns align with actual, immediate cash requirements to prevent excess federal cash on hand. Holding funds for extended periods before spending them can result in noncompliance. Questioned costs: None Context: During our testing of cash receipts, it was noted that the University was drawing down funds prior to incurring the related program expenditures. Cause: The University’s cash management process did not adequately align drawdown timing with actual disbursement needs. The drawdown was initiated based on anticipated expenses rather than immediate cash requirements. Effect: Drawing down funds prior to incurring expenditure creates risk of noncompliance with federal cash management regulations and may result in interest liability for excess cash held. Repeat Finding: No Recommendation: The University should revise its cash management procedures to ensure that HEERF drawdowns are based on actual, immediate cash needs rather than anticipated expenditures. Draw requests should be timed as closely as administratively feasible to the disbursement of funds for allowable program costs. Additionally, management should implement monitoring controls to prevent excess cash accumulation and ensure compliance with 2 CFR §200.305 and HEERF guidance. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2024-007 Subject: Special Education Cluster (IDEA) - Cash Management Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-045-PN01, 22611-045-PN01, 22611-045-ARP, 21619-045-PN01, 22619-045-PN01, 22619-045-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-007. INDIANA STATE BOARD OF ACCOUNTS 29 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The system of internal controls over the applicable reports, as established by the School Corporation, was not properly implemented, nor was it operating effectively to ensure that sufficient audit evidence was maintained to support the requests for reimbursement. The School Corporation submitted six reimbursement requests to the Indiana Department of Education during the audit period. The School Corporation was unable to provide documentation to support the underlying data accumulated and summarized in each of the reimbursement requests. The reported data could not be traced to the records that accumulate or summarize the data; therefore, we were unable to verify the accuracy and completeness of the reimbursement requests. As a result, we were unable to verify that program funds were expended prior to requesting reimbursement. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.305(b)(3) states in part: "Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per § 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." Cause Due to turnover of staffing in both the Special Education personnel and the School Corporation's administrative office, the School Corporation's management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, as it related to the grant agreement and the Cash Management compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 30 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without a proper system of internal controls in place that operated effectively, the School Corporation did not retain and provide appropriate supporting documentation to support the reimbursement requests. This prevented the determination of the School Corporation's compliance with the compliance requirements listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation for the reimbursement requests will be maintained and made available for audit as related to the grant agreement and the Cash Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
#2024-001: Grant Program: Department of Health and Human Services – National Institutes for Health Research and Development Cluster – Cancer Control – Assistance Listing #93.399 – Lack of Required Written Policies Condition: The Consortium does not have written policies and procedures in place as required by 2 CFR § 200.302 and § 200.313. Specifically, the Consortium lacks documented policies for: • The timing of federal cash draws; • The allowability of costs charged to federal awards; and • Documentation of time-and-effort for personal services. Criteria: 2 CFR § 200.302(b)(6)–(7) requires nonfederal entities to have written procedures for (a) cash drawdowns and (b) determining cost allowability. § 200.305 requires written cash-management procedures that minimize the time between draw and disbursement. § 200.430 requires a written policy that is consistently applied to both federal and nonfederal activities for documentation of compensation for personal services. Context: At the time of completion of the audit for the year ended May 31, 2024, the written policies were not in place. Cause: The Consortium has not yet developed or adopted the required written policies due to limited administrative capacity and reliance on informal practices. Effect: The absence of written policies increases the risk of noncompliance with federal requirements, mismanagement of federal funds, and audit findings in future periods. It may also impair the Consortium’s ability to consistently apply federal cost principles and properly safeguard assets. Recommendation: We recommend that the Consortium develop and implement written policies and procedures that comply with the requirements of Uniform Guidance. Management Response: See Corrective Action Plan.
Finding No. 2024-001 – Repayment agreement requested in voucher. Federal Program ALN 14.157 - U.S. Department of Housing and Urban Development Section 202 Capital Advance Program – Supportive Housing for the Elderly Name of Federal Agency U. S. Department of Housing and Urban Development (HUD) Category Other Matter Compliance requirement Cash Management Criteria Under CFR 200.305 Federal payment states the following: (1) 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_x0002_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 During the audit testing of cash management, we identified one voucher for the month of August 2023, that incorrectly included $1,348 of funds pertaining to a tenant repayment agreement. The management of the Project acknowledged that they did not detect that the repayment agreement amount had been included in the voucher. Additionally, the tenant disappeared after signing the repayment agreement without fulfilling her obligation. Cause The inclusion of the incorrect amount corresponding to a repayment agreement was due to administrative errors and to lack of effective internal controls for the review and approval of vouchers to be submitted to HUD. Effect Funds amounting to $1,348 had to be returned due to inaccuracies in the original voucher requests submitted to HUD. Questioned Cost Total known question cost to be reimbursed to HUD amounting to $1,348. Context The population consists of twelve vouchers. We selected a sample of two vouchers from this population. Upon audit procedures, we identified an error in one of the vouchers, which amounted to a total of $1,348 that needs to be refunded. Prior year finding No Recommendation We recommended that the Project administrator implement a more thorough review process for voucher details before finalization. This should include a verification step specifically focused on ensuring all amounts, including repayment agreement amounts, are accurately included. Training on the importance of detailed data entry and implementing a secondary review by another staff member could also help identify and correct errors before vouchers are processed. Views of responsible officials and planned corrective actions. The Project’s management agrees with this finding. Please refer to the corrective action plan on page 41
Information on the Federal Program: Assistance Listing Number 47.050—Geosciences, National Science Foundation. Award Number: 224242, 2303562, 2243827, 2246223, 2246225. Compliance Requirements: Cash Management Type of Finding: Material Noncompliance and Significant Deficiency. Criteria: Under 2 CFR § 200.305 - The recipient or subrecipient may retain up to $500 per year of interest earned on Federal funds to use for administrative expenses of the recipient or subrecipient. Any additional interest earned on Federal funds must be returned annually to the Department of Health and Human ServicesPayment Management System (PMS). All interest in excess of $500 per year must be returned to PMS regardless of whether the recipient or subrecipient was paid through PMS. Condition: For the year ended March 31, 2024, Future Earth did not comply with the requirement to minimize the time between the drawdown of federal funds and their disbursement. This resulted in interest accumulation on these advance payments. Future Earth failed to remit interest earned in excess of $500 annually to the PMS as stipulated by the regulations. Cause: This was the second year Future Earth was awarded Federal funding and was unaware of this requirement. Effect: Financial liabilities due to unremitted interest, subjecting the entity to potential penalties and repayment obligations. Questioned Costs: We were not able to determine the amount of interest earned on federal funds held during the year ended March 31, 2024. Context: In our review of the 4 grant draws occurring during the year, we noted that in 3 of 4 draw requests, funds were requested before expenditures. In 1 of the 4 draws, we noted that funds were drawn on September 8, 2023 were not yet expended as of March 31, 2024. Interest earned on these funds was in excess of $500, but was not tracked or remitted to the grantor. No controls were identified to ensure interest was tracked and remitted as required by the regulations. Recommendation: We recommend that Future Earth establish a policy to minimize the time between draw and expenditure. We would also recommend that any federal funds received in advance of expenditure be segregated into a separate bank account in order to better track any interest earned on federal funding. Views of Responsible Official: Management agrees with this finding. Please see corrective action plan at the end of this report.
Condition: Out of the 36 grant drawdowns during the year, of the 15 drawdowns that were tested, 3 of the drawdowns were made in advance of the supporting invoices being paid and subsequently the invoices were not paid within the 72-hours, as required. Context: The auditor haphazardly selected 15 grant drawdowns from the population, which we consider to be a statistically valid sample size. The auditor reviewed the drawdowns and supporting documentation to ensure proper procedures are being followed and that the Authority is in compliance with HUD requirements. Criteria: The U.S. Treasury per 2 CFR section 200.305 (2 CFR section 200.302(b)(6)) requires grant funds received by the Authority to be properly spent within 72 hours of receipt. HUD regulations require that proper documentation be maintained for all Capital Fund Program per 24 CFR 905.326. Cause: The Authority experienced staff turnover in the finance department as well as difficulty replacing personnel knowledgeable with HUD and grant reporting requirements. Effect: The Authority did not disburse the capital funds in a timely manner for some of the draws made during the year. Questioned Costs: $379,570 Auditor’s Recommendations: The Authority should continue to develop and implement internal controls over grant management to coordinate capital fund draws with the timing of invoice payments. View of Responsible Officials: See Corrective Action Plan
Finding No. 2024-001 – Repayment agreement requested in voucher. Federal Program ALN 14.157 - U.S. Department of Housing and Urban Development Section 202 Capital Advance Program – Supportive Housing for the Elderly Name of Federal Agency U. S. Department of Housing and Urban Development (HUD) Category Other Matter Compliance requirement Cash Management Criteria Under CFR 200.305 Federal payment states the following: (1) 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_x0002_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 During the audit testing of cash management, we identified one voucher for the month of August 2023, that incorrectly included $1,348 of funds pertaining to a tenant repayment agreement. The management of the Project acknowledged that they did not detect that the repayment agreement amount had been included in the voucher. Additionally, the tenant disappeared after signing the repayment agreement without fulfilling her obligation. Cause The inclusion of the incorrect amount corresponding to a repayment agreement was due to administrative errors and to lack of effective internal controls for the review and approval of vouchers to be submitted to HUD. Effect Funds amounting to $1,348 had to be returned due to inaccuracies in the original voucher requests submitted to HUD. Questioned Cost Total known question cost to be reimbursed to HUD amounting to $1,348. Context The population consists of twelve vouchers. We selected a sample of two vouchers from this population. Upon audit procedures, we identified an error in one of the vouchers, which amounted to a total of $1,348 that needs to be refunded. Prior year finding No Recommendation We recommended that the Project administrator implement a more thorough review process for voucher details before finalization. This should include a verification step specifically focused on ensuring all amounts, including repayment agreement amounts, are accurately included. Training on the importance of detailed data entry and implementing a secondary review by another staff member could also help identify and correct errors before vouchers are processed. Views of responsible officials and planned corrective actions. The Project’s management agrees with this finding. Please refer to the corrective action plan on page 41
Information on the Federal Program: Assistance Listing Number 47.050—Geosciences, National Science Foundation. Award Number: 224242, 2303562, 2243827, 2246223, 2246225. Compliance Requirements: Cash Management Type of Finding: Material Noncompliance and Significant Deficiency. Criteria: Under 2 CFR § 200.305 - The recipient or subrecipient may retain up to $500 per year of interest earned on Federal funds to use for administrative expenses of the recipient or subrecipient. Any additional interest earned on Federal funds must be returned annually to the Department of Health and Human ServicesPayment Management System (PMS). All interest in excess of $500 per year must be returned to PMS regardless of whether the recipient or subrecipient was paid through PMS. Condition: For the year ended March 31, 2024, Future Earth did not comply with the requirement to minimize the time between the drawdown of federal funds and their disbursement. This resulted in interest accumulation on these advance payments. Future Earth failed to remit interest earned in excess of $500 annually to the PMS as stipulated by the regulations. Cause: This was the second year Future Earth was awarded Federal funding and was unaware of this requirement. Effect: Financial liabilities due to unremitted interest, subjecting the entity to potential penalties and repayment obligations. Questioned Costs: We were not able to determine the amount of interest earned on federal funds held during the year ended March 31, 2024. Context: In our review of the 4 grant draws occurring during the year, we noted that in 3 of 4 draw requests, funds were requested before expenditures. In 1 of the 4 draws, we noted that funds were drawn on September 8, 2023 were not yet expended as of March 31, 2024. Interest earned on these funds was in excess of $500, but was not tracked or remitted to the grantor. No controls were identified to ensure interest was tracked and remitted as required by the regulations. Recommendation: We recommend that Future Earth establish a policy to minimize the time between draw and expenditure. We would also recommend that any federal funds received in advance of expenditure be segregated into a separate bank account in order to better track any interest earned on federal funding. Views of Responsible Official: Management agrees with this finding. Please see corrective action plan at the end of this report.
Condition: Out of the 36 grant drawdowns during the year, of the 15 drawdowns that were tested, 3 of the drawdowns were made in advance of the supporting invoices being paid and subsequently the invoices were not paid within the 72-hours, as required. Context: The auditor haphazardly selected 15 grant drawdowns from the population, which we consider to be a statistically valid sample size. The auditor reviewed the drawdowns and supporting documentation to ensure proper procedures are being followed and that the Authority is in compliance with HUD requirements. Criteria: The U.S. Treasury per 2 CFR section 200.305 (2 CFR section 200.302(b)(6)) requires grant funds received by the Authority to be properly spent within 72 hours of receipt. HUD regulations require that proper documentation be maintained for all Capital Fund Program per 24 CFR 905.326. Cause: The Authority experienced staff turnover in the finance department as well as difficulty replacing personnel knowledgeable with HUD and grant reporting requirements. Effect: The Authority did not disburse the capital funds in a timely manner for some of the draws made during the year. Questioned Costs: $379,570 Auditor’s Recommendations: The Authority should continue to develop and implement internal controls over grant management to coordinate capital fund draws with the timing of invoice payments. View of Responsible Officials: See Corrective Action Plan
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “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.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “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.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “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.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “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.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “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.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “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.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “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.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “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.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2023-003 U.S. Department of Transportation – AL #20.106 Airport Improvement Program – Reporting Grant Award: 3-38-0022-064-2022 Criteria The Authority is required to submit payment requests using the DOT Electronic Grants payment system, Delphi e-Invoicing. These requests must meet the standards described in 2 CFR ss 200.302 and 200.305. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there were two instances in which the amount requested was greater than invoice documentation, additionally the request included a request for reimbursement of AIP ineligible costs. As of December 31, 2023 no funds have been returned to U.S. DOT. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2023 Cause Employee oversight. Effect The Authority could have had federal funding delayed or reduced. Recommendation We recommend that the Authority implement internal controls to ensure all reporting is accurately filed. Repeat Finding This is not a repeat finding. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
2023-003 U.S. Department of Transportation – AL #20.106 Airport Improvement Program – Reporting Grant Award: 3-38-0022-064-2022 Criteria The Authority is required to submit payment requests using the DOT Electronic Grants payment system, Delphi e-Invoicing. These requests must meet the standards described in 2 CFR ss 200.302 and 200.305. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there were two instances in which the amount requested was greater than invoice documentation, additionally the request included a request for reimbursement of AIP ineligible costs. As of December 31, 2023 no funds have been returned to U.S. DOT. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2023 Cause Employee oversight. Effect The Authority could have had federal funding delayed or reduced. Recommendation We recommend that the Authority implement internal controls to ensure all reporting is accurately filed. Repeat Finding This is not a repeat finding. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
Significant Deficiency in Internal Control over Federal Programs Lack of Fiscal Policies and Procedures in Accordance with the Uniform Guidance Assistance Listing Number: 93.328 Name of Federal Program or Cluster: Epidemiology and Laboratory Capacity for Infectious Diseases Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entities: State of Wisconsin Department of Health Services The Code of Federal Regulations (CFR) Section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR§200.302(b)(6-7) Financial Management: - Written procedures are required to implement the requirements of §200.305. - Written procedures are required for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award.WHCA’s written policies and procedures lack some of the requirements required by the Code of Federal Regulations. There is an increased risk that the Association could potentially charge unallowable costs to federal awards or be noncompliant with other areas of the Code of Federal Regulations. We recommend the Association create formal written fiscal policies and procedures that conform to the uniform guidance. No Staff at the WHCA are dedicated to adhering to the regulations. The Executive Director, Vice President of Workforce Development, and the Director of Administration & Association completed a certification course on Federal allowable costs. In managing the federal awards, staff references this knowledge to guide the spending of the award.