2023-002 – Cash Management Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: n/a Pass-Through Number(s): n/a Award Period: 9/1/23-8/31/25; 4/1/21-3/31/23; 6/1/19-5/31/23; 6/1/23-5/31/26; 12/1/22-5/31/23 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: § 200.305(b)(3) indicates reimbursement of costs previously occurred is an acceptable method for requesting payment of Federal funds. However, the Organization is responsible for determining that the entity paid for the costs for which reimbursement is being requested, prior to the date of the reimbursement request. Condition: The Organization could not provide documentation to support that the draw down request was prepared by someone independent of the person who reviewed the request. Questioned Costs: None. Context: For six of six drawdowns selected for testing, CLA was able to obtain documentation of approval prior to draw down, but there was no documentation to support segregation of duties in the draw down process. Cause: Management turnover. Effect: Lack of segregation of duties could result in inaccurate amounts being drawn down. Repeat Finding: No. Recommendation: CLA recommends that the Organization maintain documentation of the individual preparing the draw down request, along documentation of an independent review being performed prior to the drawdown. This can be in the form of sign off, email, checklist, etc. Views of Responsible Officials: There is no disagreement with the audit finding.
2023-002 – Cash Management Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: n/a Pass-Through Number(s): n/a Award Period: 9/1/23-8/31/25; 4/1/21-3/31/23; 6/1/19-5/31/23; 6/1/23-5/31/26; 12/1/22-5/31/23 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: § 200.305(b)(3) indicates reimbursement of costs previously occurred is an acceptable method for requesting payment of Federal funds. However, the Organization is responsible for determining that the entity paid for the costs for which reimbursement is being requested, prior to the date of the reimbursement request. Condition: The Organization could not provide documentation to support that the draw down request was prepared by someone independent of the person who reviewed the request. Questioned Costs: None. Context: For six of six drawdowns selected for testing, CLA was able to obtain documentation of approval prior to draw down, but there was no documentation to support segregation of duties in the draw down process. Cause: Management turnover. Effect: Lack of segregation of duties could result in inaccurate amounts being drawn down. Repeat Finding: No. Recommendation: CLA recommends that the Organization maintain documentation of the individual preparing the draw down request, along documentation of an independent review being performed prior to the drawdown. This can be in the form of sign off, email, checklist, etc. Views of Responsible Officials: There is no disagreement with the audit finding.
2023-002 – Cash Management Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: n/a Pass-Through Number(s): n/a Award Period: 9/1/23-8/31/25; 4/1/21-3/31/23; 6/1/19-5/31/23; 6/1/23-5/31/26; 12/1/22-5/31/23 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: § 200.305(b)(3) indicates reimbursement of costs previously occurred is an acceptable method for requesting payment of Federal funds. However, the Organization is responsible for determining that the entity paid for the costs for which reimbursement is being requested, prior to the date of the reimbursement request. Condition: The Organization could not provide documentation to support that the draw down request was prepared by someone independent of the person who reviewed the request. Questioned Costs: None. Context: For six of six drawdowns selected for testing, CLA was able to obtain documentation of approval prior to draw down, but there was no documentation to support segregation of duties in the draw down process. Cause: Management turnover. Effect: Lack of segregation of duties could result in inaccurate amounts being drawn down. Repeat Finding: No. Recommendation: CLA recommends that the Organization maintain documentation of the individual preparing the draw down request, along documentation of an independent review being performed prior to the drawdown. This can be in the form of sign off, email, checklist, etc. Views of Responsible Officials: There is no disagreement with the audit finding.
2023-002 – Cash Management Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: n/a Pass-Through Number(s): n/a Award Period: 9/1/23-8/31/25; 4/1/21-3/31/23; 6/1/19-5/31/23; 6/1/23-5/31/26; 12/1/22-5/31/23 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: § 200.305(b)(3) indicates reimbursement of costs previously occurred is an acceptable method for requesting payment of Federal funds. However, the Organization is responsible for determining that the entity paid for the costs for which reimbursement is being requested, prior to the date of the reimbursement request. Condition: The Organization could not provide documentation to support that the draw down request was prepared by someone independent of the person who reviewed the request. Questioned Costs: None. Context: For six of six drawdowns selected for testing, CLA was able to obtain documentation of approval prior to draw down, but there was no documentation to support segregation of duties in the draw down process. Cause: Management turnover. Effect: Lack of segregation of duties could result in inaccurate amounts being drawn down. Repeat Finding: No. Recommendation: CLA recommends that the Organization maintain documentation of the individual preparing the draw down request, along documentation of an independent review being performed prior to the drawdown. This can be in the form of sign off, email, checklist, etc. Views of Responsible Officials: There is no disagreement with the audit finding.
Criteria: Cash management requirements of federal grants are contained in 2 CFR sections 200.302(b)(6) and 200.305, 31 CFR part 205, 48 CFR sections 52.216-7(b) and 52.232-12, as well as federal awarding agency regulations and terms and conditions of the federal award. The Organization must establish written procedures around cash management and must minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the Organization. Condition: The Organization does not have written procedures around cash management and requests to draw down funds from the federal agency were in excess of current expenditures, resulting in excess time between the transfer of funds and disbursement by the Organization. Effect: As of December 31, 2023, $28,141 of funds had been drawn down from the federal agency in excess of expenditures. Cause: The Organization tracks federal expenditures in the accounting software and the individual that requests the funds from the federal agency does not verify the amount of expenditures with the accounting software and requests an estimated amount each month. Identification of repeat finding: This is a repeat finding from a previous audit. Recommendation: We recommend the Organization develop written policies and procedures around cash management and request funds monthly based on the actual expenditures of that month to minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the Organization. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and has created written policies and procedures around cash management.
Condition and Context: The County does not have a complete set of written cash management policies and procedures as required by the Uniform Guidance. The lack of written procedures did not result in any material noncompliance, fraud or abuse with respect to the major program.Criteria: The Uniform Guidance requires Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, to follow the cash management standards set out at 2 CFR section 200.305. The County must have a complete set of written cash management policies, which conform to applicable Federal statutes and the cash management requirements identified in 2 CFR part 200. Cause: The County was unaware of the written cash management policy requirements required by the Uniform Guidance.Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program requirements.Recommendation: Management should determine the scope of written policies needed for compliance with all federal programs and develop policies and procedures to comply with the Uniform Guidance.Grantee Response: Management agrees with the finding and recommendation. The County’s existing policies are currently under review by management and staff to determine what updates/changes are necessary in order to meet the Uniform Guidance requirements. Once any updates/changes are drafted, the policy will be presented to the Governing Body for review and approval.
Condition and Context: The County does not have a complete set of written cash management policies and procedures as required by the Uniform Guidance. The lack of written procedures did not result in any material noncompliance, fraud or abuse with respect to the major program.Criteria: The Uniform Guidance requires Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, to follow the cash management standards set out at 2 CFR section 200.305. The County must have a complete set of written cash management policies, which conform to applicable Federal statutes and the cash management requirements identified in 2 CFR part 200. Cause: The County was unaware of the written cash management policy requirements required by the Uniform Guidance.Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program requirements.Recommendation: Management should determine the scope of written policies needed for compliance with all federal programs and develop policies and procedures to comply with the Uniform Guidance.Grantee Response: Management agrees with the finding and recommendation. The County’s existing policies are currently under review by management and staff to determine what updates/changes are necessary in order to meet the Uniform Guidance requirements. Once any updates/changes are drafted, the policy will be presented to the Governing Body for review and approval.
Federal Agency: U.S. Department of Treasury Federal Program: CDFI Equitable Recovery Program (ERP) Assistance Listing Numbers: 21.033 Federal Award Identification Number and Year: 22ERP061482 – 2023 Award Period: January 1, 2023 – December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance - Other Matter Criteria or Specific Requirement: Under 2 CFR Part-200, Subpart-D-200.305(b)(11), the non-Federal entity must maintain advance payments of Federal awards in interest-bearing accounts, unless the following apply: (i) The non-Federal entity receives less than $250,000 in Federal awards per year. (ii) The best reasonably available interest-bearing account would not be expected to earn interest in excess of $500 per year on Federal cash balances. (iii) The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources. (iv) A foreign government or banking system prohibits or precludes interest-bearing accounts. Condition: Management did not maintain its advanced payment in an interest-bearing account nor met the exceptions criteria outlined above. Questioned Costs: None Context: The Organization received $3 million of advanced funds in 2023 and utilized approximately $1.8 million in the same year. As a result, the Organization should have placed the remaining portion of the advanced payment into an interest-bearing account and track the interest earned on the account. Additionally, any interest earned in excess of $500 should then be reported and remitted back to the federal agency in accordance with program requirements. Cause: Management was not aware of the uniform guidance requirements around cash management, specifically related to maintaining advanced federal funds in interest-bearing accounts. Effect: Cash management procedures were not properly followed in accordance with the uniform guidance and program requirements. Repeat Finding: No Recommendation: Management should develop a procedure to track its federal award advances to ensure those funds are placed in interest-bearing accounts, when applicable, and any interest earnings on those funds are separately tracked, reported and remitted in accordance with the program requirements. A documented review of this activity should be performed by a knowledge individual who is aware of the program requirements prior to reporting or remitting payment back to the federal agency. Views of Responsible Officials: There is no disagreement with the audit finding.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.302(b)(6) requires the non-Federal entity to provide written procedures to implement the requirements of cash management as defined in 200.305. Condition: 2 out of 5 draw requests did not have documented approvals. Cause: There were no written procedures over cash management and when changes in management and accounting services occurred internal control documentation was not consistent. Effect or Potential Effect: Time elapsing between the transfer of funds and disbursements may not be minimized. Context: 5 out of 46 draw requests were tested. In addition, 4 significant draw requests were tested and all of those had documented approvals for internal control over cash management. Repeat Finding: This finding is a repeat of Finding 2022-004. Recommendation: The Organization document internal control over compliance procedures and document written procedures to ensure compliance with 2 CFR 200.305. Views of Responsible Officials: Management agrees with the finding and will implement documentation of internal controls and document its policies and procedures.
Finding 2023-001: Cash Management Requirements U.S Department of Health and Human Services – Unaccompanied Alien Children ALN 93.676 Cash Management Statement of Condition: During the audit of KidsPeace it was observed that the organization did not minimize the time elapsing between the transfer of funds from the Federal agency to the disbursement of these funds. Funds were drawndown in advance of actual disbursement needs resulting in excess cash balances. No questioned costs. Criteria: According to 2CFR 200.305(b), non- Federal entities must minimize the time elapsing between the transfer of funds from the federal agency and the disbursement of funds by the non- Federal entity. Advance payments must be limited to the minimum amounts needed and timed in accordance with the actual immediate cash requirements of the entity in carrying out the purpose of the program. Cause: The organization lacked adequate procedures to ensure that funds were drawn down only as needed for immediate disbursement. Additionally, there was insufficient oversight of cash management practices. Effect of the Condition: The cash on hand by year end was approximately $3.4 million which is in excess of the immediate needs of the program. Recommendation: We recommend that the Organization implements further procedures to ensure the draw down amounts reflect actual expenditures incurred. Repeat Finding: This is not a repeat funding. Views of Responsible Officials: Management agrees with the findings. As expenditure amounts fluctuate, management was approving estimated amounts rather than actual expenditures for the month. Management will put a process in place to only approve and draw down amounts that are equal to expenditures incurred each month.
Assistance Listing Number(s): 10.912 Name of Federal Program or Cluster: Environmental Quality Incentives Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Assistance Listing Number(s): 10.924 Name of Federal Program or Cluster: Conservation Stewardship Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies. Condition: There are no written policies and procedures for allowable costs/cost principles, cash management, procurement and suspension and debarment requirements. Cause: The Organization does not have a process for reviewing their accounting policies and procedures manual on a regular basis to ensure written procedures conform to Uniform Guidance requirements. Effect or Potential Effect: A lack of written policies, procedures, and standards of conduct may result in noncompliance with the requirements of federal programs and/or disallowed costs. Repeat Finding: No Recommendation: We recommend the Organization’s written policies and procedures be reviewed and updated for compliance with Uniform Guidance. The organization should become familiar with the requirements of Subparts D and E of 2 CFR Part 200 and establish appropriate written policies, procedures, and standards of conduct. Views of Responsible Officials: Management agrees with the finding and they will evaluate our findings to determine an appropriate corrective action.
Assistance Listing Number(s): 10.912 Name of Federal Program or Cluster: Environmental Quality Incentives Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Assistance Listing Number(s): 10.924 Name of Federal Program or Cluster: Conservation Stewardship Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies. Condition: There are no written policies and procedures for allowable costs/cost principles, cash management, procurement and suspension and debarment requirements. Cause: The Organization does not have a process for reviewing their accounting policies and procedures manual on a regular basis to ensure written procedures conform to Uniform Guidance requirements. Effect or Potential Effect: A lack of written policies, procedures, and standards of conduct may result in noncompliance with the requirements of federal programs and/or disallowed costs. Repeat Finding: No Recommendation: We recommend the Organization’s written policies and procedures be reviewed and updated for compliance with Uniform Guidance. The organization should become familiar with the requirements of Subparts D and E of 2 CFR Part 200 and establish appropriate written policies, procedures, and standards of conduct. Views of Responsible Officials: Management agrees with the finding and they will evaluate our findings to determine an appropriate corrective action.
2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate. Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (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 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award. Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures. Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures. Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA. Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate. Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (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 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award. Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures. Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures. Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA. Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate. Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (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 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award. Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures. Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures. Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA. Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
Assistance Listing, Federal Agency, and Program Name - 11.611, United States Department of Commerce (DOC), National Institute of Standards and Technology (NIST) Federal Award Identification Number and Year - 70NANB20H067 Finding Type - Significant deficiency Repeat Finding - No Criteria - Internal controls should be put in place to ensure grant duties are appropriately segregated between preparation and review processes. In addition, written procdures to implement cash management requirements should in place and updated in accordance with 2 CFR Part 200.305. Condition - The Organization did not have appropriate segregation of duties surrounding the preparation and review of the monthly NIST schedules which accumulate the information necessary to calculate allowable costs and matching for drawdown requests. Further, while the Organization had written procedures over cash management, they were outdated and did not reflect the current staffing model. Questioned Costs - Not applicable Context - One individual was responsible for the preparation of the monthly schedule described above and submission of the drawdown request. The cash management policy was not updated when there was restructuring in the finance department during fiscal year. Cause and Effect - Turnover within the finance department contibuted to the lack of segregation of duties and delay in updating the cash management policy. A lack of segregation of duties allows for the potential for errors and/or noncompliance to occur without detection. The outdated cash management policy was not reflective of the actual process. Recommendation - An individual independent of the preparation process should review and approve the information used to calculate allowable costs and matching prior to submitting the drawdown requests for cash management. Additionally, the cash management policy should be updated to reflect the new process. Views of Responsible Officials and Planned Corrective Actions - Subsequent to year end, the reorganized finance team put new controls and procedures in place. Moving forward the Accounting Supervisor will calculate the NIST MEP monthly program income which is used to determine the monthly award drawdown of cash from the available grant award funds. This is reviewed by the Controller and this report is used to create SF 425.
Federal Program: Assistance Listing #93.590 - Community-based Child Abuse Prevention Grant Program Assistance Listing #93.912 - Rural Communities Opioid Response Program Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Illuminate Colorado has established a policy to time Federal drawdown requests to ensure that Federal cash on hand is sufficient to be disbursed to third party vendors within 10 days of receipt. 2 out of 49 program disbursements to external vendors were made 79 to 90 days after receipt of funds for Community-based Child Abuse Prevention Grant program. 32 out of 46 program disbursements to external vendors were made 14 to 186 days after receipt of funds for Rural Communities Opioid Response program. Questioned Costs: None. Cause and Effect: Illuminate Colorado experienced cashflow issues during 2023 resulting in usage of program receipts for other programs. In addition, vendors utilized for direct Federal assistance programs were not identified and prioritized for federal drawdown receipts. As a result, Illuminate Colorado did not minimize the time elapsing between the drawdown and transfer of funds from the US Treasury and disbursement by the non-federal entity for direct program or project costs. Recommendation: Since Illuminate Colorado is a direct recipient of federal program funds, we recommend Illuminate Colorado identify and pay external vendors participating in this program within 10 days of receipt of program funds in accordance with its financial policies and procedures. In addition, non-program cash flow should be increased to allow enough working capital to disburse program funds to external vendors utilized for this program. Management’s Response: Illuminate Colorado has improved invoicing procedures to ensure timely submission of invoices across the board to minimize time elapsed between submission of invoices to funders and reimbursement of those invoices. In addition, Illuminate Colorado has been seeking increased working capital via a larger line of credit or other sources to address cash flow issues. Finally, Illuminate Colorado is in process of developing a Standard Operating Procedure to ensure consistent identification of vendors utilized for direct Federal assistance programs in order to prioritize payment of those vendors with federal drawdown receipts.
Federal Program: Assistance Listing #93.590 - Community-based Child Abuse Prevention Grant Program Assistance Listing #93.912 - Rural Communities Opioid Response Program Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Illuminate Colorado has established a policy to time Federal drawdown requests to ensure that Federal cash on hand is sufficient to be disbursed to third party vendors within 10 days of receipt. 2 out of 49 program disbursements to external vendors were made 79 to 90 days after receipt of funds for Community-based Child Abuse Prevention Grant program. 32 out of 46 program disbursements to external vendors were made 14 to 186 days after receipt of funds for Rural Communities Opioid Response program. Questioned Costs: None. Cause and Effect: Illuminate Colorado experienced cashflow issues during 2023 resulting in usage of program receipts for other programs. In addition, vendors utilized for direct Federal assistance programs were not identified and prioritized for federal drawdown receipts. As a result, Illuminate Colorado did not minimize the time elapsing between the drawdown and transfer of funds from the US Treasury and disbursement by the non-federal entity for direct program or project costs. Recommendation: Since Illuminate Colorado is a direct recipient of federal program funds, we recommend Illuminate Colorado identify and pay external vendors participating in this program within 10 days of receipt of program funds in accordance with its financial policies and procedures. In addition, non-program cash flow should be increased to allow enough working capital to disburse program funds to external vendors utilized for this program. Management’s Response: Illuminate Colorado has improved invoicing procedures to ensure timely submission of invoices across the board to minimize time elapsed between submission of invoices to funders and reimbursement of those invoices. In addition, Illuminate Colorado has been seeking increased working capital via a larger line of credit or other sources to address cash flow issues. Finally, Illuminate Colorado is in process of developing a Standard Operating Procedure to ensure consistent identification of vendors utilized for direct Federal assistance programs in order to prioritize payment of those vendors with federal drawdown receipts.
Finding 2023-001; Lack of Written Policies and Procedures Condition: The Organization does not have written policies and procedures in place for the administration and management of federal awards, as required by the Uniform Guidance (2 CFR Part 200). Specifically, the organization lacks documented procedures for financial management, internal controls, allowable costs, procurement, and other key operational areas. Criteria: According to 2 CFR § 200.302(b)(7), non-federal entities must have written procedures to implement the requirements of § 200.305 (Payment) and must maintain written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the federal award. Additionally, 2 CFR § 200.303 requires non-federal entities to establish and maintain effective internal controls, including written policies and procedures, to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: The absence of written policies and procedures appears to be due to a lack of awareness of the specific requirements under the Uniform Guidance, coupled with insufficient resources allocated to the development of these necessary internal controls. Effect: Without written policies and procedures, the Organization is at risk of non-compliance with federal regulations, which could lead to unallowable costs being charged to federal awards, inefficient or improper use of federal funds, and potential disallowance of costs during audits. This deficiency could also reduce the Organization's ability to ensure consistency and accountability in the management of federal funds. Recommendation: The Organization should develop and implement comprehensive written policies and procedures in accordance with the requirements of the Uniform Guidance. These should include, but not be limited to, the following areas: 1. Financial management, including procedures for payments and cash management. 2. Internal controls to ensure compliance with federal requirements. 3. Determination of allowable costs in accordance with federal regulations and the terms and conditions of the award. 4. Time and effort reporting and compensation. The Organization should also ensure that staff are adequately trained in these policies and procedures to enhance compliance and operational efficiency. Views of Responsible Officials of Auditee: In response to the finding, management will take action to develop and implement the necessary written policies and procedures by June 30, 2025. Comprehensive training will be provided to all relevant staff to ensure compliance with federal requirements.
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the twenty-one (21) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the twenty-one (21) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the twenty-one (21) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Finding No. 2023–001 - CASH MANAGEMENT Name of Federal Agency U.S. Department of Education Pass-through the Puerto Rico Department of Education Federal Programs Charter Schools Assistance Listing Numbers 84.282 Category Significant Deficiency Compliance / Internal control Compliance Requirements Cash Management Criteria According to the 2 CFR 200.305(b) For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the passthrough entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. According to the 2 CFR 200.305(b) (2)The recipient or subrecipient 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 recipient or subrecipient, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient 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 recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. The recipient or subrecipient must make timely payments to contractors in accordance with the contract provisions. Condition During our audit procedures, we found the following instances on which the Institution did not disbursed funds in an expedite matter: Fund Sample Selected Instances Average of Days Late 84.282 11 Two (2) 10 to 15 days Cause The delay in disbursements responds to several situations: remote work, lack of banking or information from suppliers, multiplicity of tasks under the responsibility of the CFO, which affected the dates of sending the payments. Effect As a result of this condition, the U.S. Department of Education and /or Puerto Rico Department of Education may issue warnings and/or impose penalties to the Institution.-34- Questioned Cost None Recommendation The management of the Institution should reinforce its cash management procedures and internal controls to ensure the disbursement of funds in the required time frame. Views of Responsible Officials of the Auditee The management of the Institution agrees with this finding. Responsible Person Yusein Duarakov Business Administration
Finding 2023-003: Cash Management Federal Department: U.S. Department of Education Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education Federal Program Name: Twenty-First Century Community Learning Centers Assistance Listing Number: 84.287 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.303, Internal controls states “The non-Federal” entity must: (1) 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 terms and conditions of the Federal award. 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request. Condition/Context During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements. Exceptions were noted in five of five tested reimbursement requests: For all five requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission. For all five requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system-generated expenditures reports, instead of actual invoices, payroll registers, and payment support. Cause Based on our discussions with management, this finding occurred due to staff turnover. As a result, consistent documentation was not maintained to trace the reimbursement submissions to pass-through entities. Effect The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements. Questioned Costs Unable to determine. Identification of Repeat Findings Repeated (Prior Finding No. 2022-002). Recommendation We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations. Views of Responsible Officials and Corrective Action Plan CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 18-20.
Finding 2023-003: Cash Management Federal Department: U.S. Department of Education Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education Federal Program Name: Twenty-First Century Community Learning Centers Assistance Listing Number: 84.287 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.303, Internal controls states “The non-Federal” entity must: (1) 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 terms and conditions of the Federal award. 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request. Condition/Context During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements. Exceptions were noted in five of five tested reimbursement requests: For all five requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission. For all five requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system-generated expenditures reports, instead of actual invoices, payroll registers, and payment support. Cause Based on our discussions with management, this finding occurred due to staff turnover. As a result, consistent documentation was not maintained to trace the reimbursement submissions to pass-through entities. Effect The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements. Questioned Costs Unable to determine. Identification of Repeat Findings Repeated (Prior Finding No. 2022-002). Recommendation We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations. Views of Responsible Officials and Corrective Action Plan CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 18-20.
Finding 2023-003: Cash Management Federal Department: U.S. Department of Education Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education Federal Program Name: Twenty-First Century Community Learning Centers Assistance Listing Number: 84.287 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.303, Internal controls states “The non-Federal” entity must: (1) 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 terms and conditions of the Federal award. 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request. Condition/Context During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements. Exceptions were noted in five of five tested reimbursement requests: For all five requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission. For all five requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system-generated expenditures reports, instead of actual invoices, payroll registers, and payment support. Cause Based on our discussions with management, this finding occurred due to staff turnover. As a result, consistent documentation was not maintained to trace the reimbursement submissions to pass-through entities. Effect The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements. Questioned Costs Unable to determine. Identification of Repeat Findings Repeated (Prior Finding No. 2022-002). Recommendation We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations. Views of Responsible Officials and Corrective Action Plan CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 18-20.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
U.S. Department of Health and Human Services 2023-003 Cash Management/Reporting Program(s) Name of Federal Program (Assistance Listing Number) Urban Indian Health Services (93.193) Special Diabetes Program for Indians - Diabetes Prevention and Treatment Projects (93.237) Criteria - Recipients of federal awards must minimize the time elapsing between the receipt of funds from the U.S. Treasury and disbursement by the Organization set out at 2 CFR section 200.305(b). Context and Condition - We compared four quarterly Federal Cash Transaction Reports and three monthly reimbursement requests to total disbursements reported by these two programs in the Organization’s job-costing system. In both reports we found that the amounts requested did not match the amounts in the job-costing system. Cause - Due to increased funding the Organization received to address the impact of COVID-19, disbursements were not always correctly assigned to a program when incurred. Requests for federal funds were made based on those incomplete reports that were changed subsequently and no longer represent the amounts requested. The original reports were not maintained to support the requests made. Effect - A federal program could disburse funds prior to the disbursement by the Organization. We identified that both programs had requested funds in excess of disbursements. Questioned Costs - No costs were questioned. Repeat finding - Yes Statistically valid - Yes Recommendation - We recommend the Organization 1) maintains timely and accurate recording of disbursements in its job-costing system and 2) regularly request grant funds based on amounts expended as report in the Organization’s job-costing system. Views of responsible officials - The Organization is implementing a grant tracking system in addition to its job-costing system to better comply with these requirements. Together, these systems will be used to request only the amount attributable to the program for reimbursement.
U.S. Department of Health and Human Services 2023-003 Cash Management/Reporting Program(s) Name of Federal Program (Assistance Listing Number) Urban Indian Health Services (93.193) Special Diabetes Program for Indians - Diabetes Prevention and Treatment Projects (93.237) Criteria - Recipients of federal awards must minimize the time elapsing between the receipt of funds from the U.S. Treasury and disbursement by the Organization set out at 2 CFR section 200.305(b). Context and Condition - We compared four quarterly Federal Cash Transaction Reports and three monthly reimbursement requests to total disbursements reported by these two programs in the Organization’s job-costing system. In both reports we found that the amounts requested did not match the amounts in the job-costing system. Cause - Due to increased funding the Organization received to address the impact of COVID-19, disbursements were not always correctly assigned to a program when incurred. Requests for federal funds were made based on those incomplete reports that were changed subsequently and no longer represent the amounts requested. The original reports were not maintained to support the requests made. Effect - A federal program could disburse funds prior to the disbursement by the Organization. We identified that both programs had requested funds in excess of disbursements. Questioned Costs - No costs were questioned. Repeat finding - Yes Statistically valid - Yes Recommendation - We recommend the Organization 1) maintains timely and accurate recording of disbursements in its job-costing system and 2) regularly request grant funds based on amounts expended as report in the Organization’s job-costing system. Views of responsible officials - The Organization is implementing a grant tracking system in addition to its job-costing system to better comply with these requirements. Together, these systems will be used to request only the amount attributable to the program for reimbursement.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
Material Weakness in Cash Management Controls Federal Agency and Pass-through Entity: U.S. Environmental Protection Agency – Georgia Environmental Finance Authority Program Title/Cluster: Clean Water State Revolving Fund Cluster (CWSRF) Criteria: In accordance with 2 CFR §200.305(b), when advance payments are made, the non-federal entity must maintain written procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury (or pass-through entity) and disbursement. Effective internal control over compliance with the cash management requirement includes documented procedures to ensure federal funds are drawn down only when needed and promptly disbursed. Per 2 CFR §200.303, the non-federal entity must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our testing of compliance with cash management requirements for the CWSRF program, we inquired about the City’s procedures to minimize the time elapsed between draw requests, deposit of funds, and disbursement to contractors. We noted that the City did not have formal or documented internal controls in place specifically related to this process. No control activities were identified to monitor or ensure timely disbursement following drawdowns. Effect: The absence of identifiable internal controls over cash management increases the risk of noncompliance with federal requirements, including the potential for drawing federal funds in advance of immediate cash needs. While our audit testing did not identify any instances of noncompliance (contractor payments were made within a reasonable timeframe) this control deficiency represents a material weakness in internal control over compliance. Questioned Costs: None reported. Recommendation: We recommend that the City develop and implement formal, documented procedures and internal controls to ensure that federal funds are drawn only when needed and disbursed in a timely manner in accordance with federal cash management requirements. This should include documented monitoring of the timing of drawdowns and corresponding disbursements. Status: New finding in the current year.
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.