Finding 2025-002 – Cash Management (Reimbursement Request Error) Federal Program: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance and Noncompliance Criteria Per 2 CFR §200.305(b)(1) and the terms of the subaward, the pass-through entity required the non-Federal entity to use the reimbursement method. Under this method, payment may be requested only for actual, allowable, and properly supported expenditures. Additionally, per 2 CFR §§200.302 and 200.303, the non-Federal entity must maintain financial management systems and internal controls sufficient to ensure reimbursement requests are accurate and supported by appropriate documentation. Condition The Town of Wheatland requested reimbursement totaling $74,113.15 in excess of actual, allowable, and supported expenditures due to an error in compiling reimbursement request amounts. As a result, the request was not fully supported by underlying documentation at the time of submission. The error was later identified by the Town and corrected through a subsequent reimbursement adjustment. Cause The condition resulted from insufficient review procedures over reimbursement requests, including a lack of detailed reconciliation between requested amounts and supporting expense documentation prior to submission. Effect The Town temporarily requested federal funds in excess of allowable and supported expenditures, resulting in noncompliance with cash management requirements. Questioned Costs None. Repeat Finding No. Recommendation We recommend the Town strengthen internal controls over reimbursement requests by implementing a secondary review of reimbursement calculations prior to submission, establishing a formal reconciliation process between requested amounts and supporting documentation, and using a standardized checklist to verify the completeness and accuracy of reimbursement requests. Views of Responsible Officials Management agrees with the finding and has corrected the identified error. Additional review procedures and reconciliations will be implemented to ensure reimbursement requests are accurate and fully supported prior to submission.
Significant Deficiency, Nonmaterial Non-Compliance North Carolina Department of Public Safety Program name: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (CDBG) AL Number: 14.228 Grant Number: 21-C-4010(NR) Criteria: In accordance with 2 CFR 200.305, the Town is required to maintain an adequate system of internal controls to ensure compliance with cash management requirements. Management must minimize the time elapsing between the transfer of funds form the agency and the disbursement of those funds by the recipient. Condition: The Town did not have adequate internal controls in place to ensure cash management compliance requirements. Our testing identified that reimbursement request #4 was drawn down and received in August; however, the related disbursement to the vendor was not made until September. As a result, fund were not disbursed within the required three-day timeframe. Context: Of the 43 expenditures totaling $755,482, we tested 24 transactions (19 ISI valued at $666,643 and five additional valued at $33,628) We noted that one transaction, valued at $6,563, did not meet the cash management requirements. Effect: The lack of effective internal controls over cash management increases the risk that errors to irregularities may occur and go undetected and may result in non-compliance with the grant requirements. Cause: This condition occurred because the Town did not disburse funds to the vendor within three business days of receipt. Questioned Costs: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs exceed $25,000. Likely questioned costs do not exceed $25,000. Recommendation: Management should strengthen the internal controls over cash management of grant funds to ensure that the requirements are met. Views of Responsible Officials and Planned Corrective Action: The Town agrees with this finding. Please refer to the Corrective Action Plan section of this report. 106
U.S. Department of Health and Human Services Congressional Directives - 93.493 Award# CE152271 Criteria or Specific Requirement – Cash Management and Significant Deficiency Non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. 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 – During our test work over the Congressional Directive grant, we noted the Hospital received the grant funds in October 2023. The funds were placed in a restricted cash account and were not expended until January 2025, when the MRI equipment was invoiced and subsequently paid for. As such, grant funds were drawn in advance of the incurrence of allowable costs. Cause – Management indicated that, at the time the grant funds were drawn, a former Chief Financial Officer was responsible for grant administration. Management believes the funds were drawn early to demonstrate receipt of grant funding in order for construction on the MRI suite to proceed. However, management was unable to locate written authorization, correspondence, or other documentation from HRSA approving an advance drawdown. Effect or Potential Effect – The Hospital did not comply with federal cash management requirements, as grant funds were drawn in advance of the incurrence of allowable costs and without documented federal approval. Questioned Costs – None noted. Context – The MRI equipment could not be purchased until remodeling of the imaging suite was completed, patient safety concerns were addressed, and inspection was completed. The Hospital did maintain the grant proceeds in restricted cash and did not use the funds for other purposes. No documentation was provided evidencing HRSA approval to draw funds prior to expenditure. Identification as a Repeat Finding, if applicable – Not applicable. Recommendation – Management should strengthen controls to ensure federal grant funds are drawn only as allowable costs are incurred and in accordance with grant agreement terms. Controls should require documented evidence of incurred costs prior to drawdown and retention of any federal approvals authorizing advance funding. Views of Responsible Official and Planned Corrective Actions – Management agrees with finding. See corrective action plan.
Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S Department of Health and Human Services Award No. 5 H80CS00681-23-07, June 1, 2024 – May 31, 2025 Award No. 6 H80CS00681-24-04, June 1, 2025 – May 31, 2026 Award No. 5 H8KCS49728-02-00, September 1, 2024 - August 3, 2025 Criteria or Specific Requirement – Cash Management – 2 CFR 200.305 Condition – The Organization’s internal controls over the cash drawdown process did not minimize the time elapsing between the transfer of funds to the Organization from the U.S. Treasury and the issuance of payments for program purposes by the Organization. Cause – The Organization did not comply with their federal cash drawdown policy or federal grant cash management requirements. Effect or potential effect– Grant funds were drawn down sooner than administratively necessary. Questioned Costs – None Context – The Organization did not follow their process of determining whether sufficient grant expenditures had been incurred and disbursed prior to drawing down grant funds. Grant funds were drawn down prior to disbursements of expenditures within the grant period for $707,934 for two out of eleven draws during the fiscal year ended June 30, 2025. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – The Organization should ensure procedures are followed to prevent cash draws from being drawn down prior to disbursement of allowable expenditures. Views of Responsible Officials and Planned Corrective Actions – Management Response - Management concurs with the auditor's finding. The Organization acknowledges the cash drawdown process was not operating effectively to minimize the time lapsing between the transfer of funds to the Organization from the U.S. Treasury and the issuance of payments for program purposes to the Organization. Corrective Action Taken - Designated Crossing Healthcare staff will submit cash draw down requests no more than 5 business days prior to the anticipated pay date for the pay period claimed. Management has developed a dedicated schedule listing Organization pay periods, pay dates, appropriate fund draw dates, and funding draw amounts. Completion Date - Completed 5/7/2026 Responsible Contact Person - Julie Brilley, CEO
2025-004: Cash management - excess cash - ALN 93.568 Condition: The Organization maintained excess cash balances throughout the fiscal year. Monthly balances ranged from approximately $39,000 to $296,000, with consistently elevated balances observed during multiple months. These balances indicate that federal funds were drawn down in advance of immediate cash needs. Criteria: In accordance with 2 CFR §200.305(b), non-federal entities must minimize the time elapsing between the transfer of funds from the federal awarding agency and the disbursement of those funds. Cash management practices should ensure that drawdowns are limited to amounts needed for immediate disbursement of program costs. Cause: The condition appears to be the result of inadequate alignment between cash drawdowns and actual disbursement needs, as well as a lack of ongoing monitoring of program cash balances to ensure compliance with federal cash management requirements. Questioned Costs: N/A Effect: Maintaining excess federal funds on hand increases the risk of noncompliance with federal regulations and may result in the Agency being subject to interest liability on advanced funds. Additionally, it reflects weakened internal controls over cash management and increases the risk of inefficient use of federal resources. Recommendation: We recommend that the Agency strengthen its cash management procedures to ensure compliance with federal requirements by aligning cash drawdowns more closely with immediate disbursement needs. This should include developing and utilizing short-term cash forecasts to support draw requests, performing regular monitoring and review of program cash balances, and maintaining documentation that clearly demonstrates the timing and necessity of each draw. Additionally, management should ensure that personnel responsible for cash management are adequately trained on federal cash management requirements to prevent excess cash from being held going forward. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2025-002 Finding: Material Weakness in Internal Control Over Compliance and Material Non-Compliance Federal Agency: U.S. Department of Education Federal Programs: 84.063 Federal Pell Grant Program; 84.268 William D. Ford Federal Direct Loan Program Compliance Requirement: Cash Management Repeat Finding: No Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200.305 requires non-Federal entities using the advance payment method to minimize the time between the transfer of federal funds and their disbursement. Advance payments must be limited to the minimum amounts needed and aligned with the entity’s actual, immediate cash requirements. To use the advance payment method, entities must maintain written cash management procedures and financial management systems that provide effective control and accountability over federal funds. In addition, 2 CFR 200.302(b)(3) and (b)(6) require entities to maintain financial management systems and written procedures sufficient to permit the tracing of federal funds to underlying expenditures and to implement the cash management requirements of 2 CFR 200.305. 2 CFR 200.303 further requires entities to establish and maintain effective internal control over federal awards to provide reasonable assurance of compliance, including monitoring activities. For Title IV Student Financial Assistance programs, 34 CFR 668.162(b) requires institutions using the advance payment method to request funds only for amounts needed immediately for disbursements made or to be made to eligible students and to disburse those funds no later than three business days after receipt. Condition: The College did not have written procedures governing drawdowns, including draw calculations, timing, approvals, reconciliations, or the return of excess funds. Tested draws were not consistently supported by documentation evidencing the accuracy of the expenditures being reimbursed. In addition, the College did not perform or document reconciliations between underlying disbursement records and authorized draw requests and did not monitor cash balances to identify whether positive balances were carried forward from period to period. As a result, the College could not demonstrate that draw amounts consistently reflected only eligible expenditures incurred during the applicable period. Cause: Management had not established a formal, documented cash management control framework, and responsibilities for draw preparation, review, approval, reconciliation, and monitoring were not clearly defined. As a result, draw requests, supporting documentation, and reconciliations were prepared inconsistently or not retained, and controls were not in place to identify or prevent excess cash on hand. Effect: Because the College did not maintain written cash management procedures, retain consistent support for draw calculations, or perform and document reconciliations of draws to underlying student disbursements and cash balances, the College could not demonstrate that Title IV funds were drawn only for actual, immediate cash needs or that drawn funds were timely disbursed in accordance with advance payment requirements. This condition increases the risk that the College may draw excess cash or draw funds in advance of need, be unable to detect or prevent noncompliance due to inadequate internal controls, and be subject to the return of excess funds, administrative actions, or questioned costs if noncompliance could be quantified. Recommendation: The College should strengthen cash management controls over the SFA Cluster by implementing the following: 1. Adopting written cash management procedures addressing draw calculations, timing of draws, approvals and segregation of duties, required supporting documentation, reconciliation requirements, and the identification and return of excess cash. 2. Maintaining a standardized draw file for each draw that includes approval evidence, supporting disbursement detail, a reconciliation to student-level disbursements by award type, and documentation of cash balances before and after the draw. 3. Performing and retaining monthly reconciliations between student-level disbursement records and federal cash activity, including documented supervisory review. Auditor’s Note: The engagement team noted that the cash management control deficiencies described in this finding have a direct impact on the College’s ability to support other Title IV compliance requirements that rely on traceable federal cash activity, including Return of Title IV Funds (R2T4). Specifically, where the College does not retain draw or return support, does not perform reconciliations between underlying student transactions and authorized activity, and does not maintain a clear audit trail of federal cash balances, it may be unable to demonstrate that Title IV funds were returned to the Department when required and that such returns can be traced from student-level determinations through COD activity and ultimately to federal cash activity (e.g., G5). View of Responsible Officials: See Auditee’s Corrective Action Plan. Questioned Costs: $0, Unknown
Federal Agency: Major Program – U.S. Department of Health and Human Services. Other Program –U.S. Department of Justice Federal Program Name: Major Program – HIV Prevention Activities: Non-Governmental Organization Based. Other Program – Grants for Outreach and Services to Underserved Populations Assistance Listing Number: Major Program – 93.939. Other Program – 16.889 Federal Award Identification Number: Major Program – NU65PS923746. Other Program – 15JOVW-22-GG-00404-UNDE Award Period: Major Program – July 1, 2024 through June 30, 2025. Other Program – October 1, 2024 through September 30, 2025. Type of Finding: • Material Weakness in Internal Control over Compliance and Compliance – Cash Management. Criteria or Specific Requirement: Per the Uniform Guidance (2 CFR §200.305), non-federal entities must minimize the time between the transfer of funds from the U.S. Treasury and the disbursement for program purposes. Drawdowns must be based on immediate cash needs and supported by incurred expenses. Condition: During the audit of federal program compliance, it was identified that the entity drew down federal funds in excess of the amounts incurred for allowable expenses. Specifically, cash management procedures did not ensure that funds drawn down were limited to actual expenditures incurred, resulting in excess cash balances held temporarily beyond the allowable timeframe. Questioned Costs: Major Program – $339,859. Other Program – $110,783. Context: We noted through our testing of drawdowns and related expenses that as of June 30, 2025 Mazzoni Center had drawn down $339,859 more funds than it had expended on the contract for Assistance Listing No. 93.939 HIV Prevention Activities. It was also identified that $110,783 of funds were drawn down in excess of funds expended for Assistance Listing No. 16.889 Grants for Outreach and Services to Underserved Populations which was not deemed to be a major program. The individual drawing down funds from the federal agencies did not draw down funds based on the expenses incurred each month. Cause: The entity lacked effective internal controls to reconcile actual drawdowns with expenditures incurred. Effect: This deficiency resulted in noncompliance with federal cash management requirements and exposed the entity to potential interest liabilities and reputational risk. It also indicates a reasonable possibility that material noncompliance with federal requirements may not be prevented or detected and corrected on a timely basis. Repeat Finding: Yes Recommendation: We recommend that management ensure drawdowns are strictly aligned with incurred and allowable expenses. This should include: • Pre-drawdown verification of expense documentation. • Monthly reconciliations of drawdown activity to actual expenditures. • Training for staff involved in federal fund management on Uniform Guidance requirements. Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan.
Condition During our testing of cash draws, we noted the Education Alliance requested and received federal funds for certain expenditures from subrecipients prior to the related costs being incurred. Specifically, funds were requested based on subrecipient annual agreements rather than actual expenditures incurred as of the date of the draw request. Criteria In accordance with requirements set forth by 2 CFR section 200.305(b), non-federal entities are required to minimize the time elapsed between the transfer of federal funds from the awarding agency and the disbursement of those funds for programmatic purposes. Cause The Education Alliance did not have adequate controls in place to ensure that cash drawdowns for subrecipient activity aligned with the timing of actual expenditures incurred by subrecipients. Effect Federal funds were drawn in advance of allowable programmatic expenditures, resulting in noncompliance with federal cash management requirements and the accumulation of significant refundable advances at year-end. Questioned Costs No questioned costs were identified. Recommendation We recommend the Education Alliance implement procedures to ensure that cash drawdowns related to subrecipient agreements are supported by expected disbursement needs, including monitoring subrecipient expenditure activity and reimbursement status, to minimize the time between receipt and disbursement of federal funds. Management Response Management will review its cash management procedures to ensure that federal drawdowns are supported by actual or immediate cash needs based on expenditures incurred. Management will also closely monitor subrecipient expenditure activity and reimbursement timing to ensure compliance with 2 CFR 200.305(b) and minimize the time between receipt and disbursement of federal funds.
Finding No: 2025-006 – Internal control deficiencies over accounting for federal funds received Federal Programs ALN 97.036, Disaster Grants - Public Assistance (Presidentially Declared Disasters) ALN 21.027, Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency ALN 21.027, Coronavirus State and Local Fiscal Recovery Funds Category U.S. Department of Treasury U.S. Department of Homeland Security Compliance Requirement Activities Allowed/Unallowed, Allowable Costs/Cost Principles, Period of Performance, Project Accounting. Criteria 2 CFR Part 200 Subpart D Subsection 200.302 states the following: The recipient's and subrecipient's financial management system must provide for the following: 1. Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. Puerto Rico Ports Authority (A Component Unit of the Commonwealth of Puerto Rico) Schedule of Findings and Questioned Costs – (Continued) Year Ended June 30, 2025 - 102 - Part III – Federal Award Findings and Questioned Costs – (continued) Finding No: 2025-006 – Internal control deficiencies over accounting for federal funds received Criteria – (continued) 3. Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. 4. Effective control over and accountability for all funds, property, and assets. The recipient or subrecipient must safeguard all assets and ensure they are used solely for authorized purposes. See § 200.303. 5. Comparison of expenditures with budget amounts for each Federal award. 6. Written procedures to implement the requirements of § 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. In addition, the 2 CFR Compliance Supplement states the following under Special Test and Provisions – Project Accounting: For large projects, the recipient is required to make an accounting to Federal Emergency Management Agency (FEMA) of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. For improved and alternate projects, if the total cost of the projects does not equal or exceed the approved eligible costs, then the auditor should expect to see an adjustment to reduce eligible costs (44 CFR section 206.205). For Small Projects, FEMA does not adjust estimated costs to the actual incurred amount. The Subrecipient must certify that they completed the approved SOW, and the Recipient must certify that they made all payments in accordance with the FEMA-State/Territory/Tribe agreement. This is typically completed on a Small Project Completion Certification. Puerto Rico Ports Authority (A Component Unit of the Commonwealth of Puerto Rico) Schedule of Findings and Questioned Costs – (Continued) Year Ended June 30, 2025 - 103 - Part III – Federal Award Findings and Questioned Costs – (continued) Finding No: 2025-006 – Internal control deficiencies over accounting for federal funds received Condition During our procedures over the Authority’s funds received from FEMA we noticed the following: 1. Return of interest earned on FEMA-related funds totaling approximately $211,853 was not timely recorded in the general ledger and was subsequently recorded through a post-closing entry dated January 26, 2026. 2. Management initially misclassified approximately $6 million received under the Coronavirus State and Local Fiscal Recovery Funds as state funds rather than federal awards. As a result, the amount was originally excluded from the Schedule of Expenditures of Federal Awards (the Schedule). Cause The condition was caused by the Authority's lack of personnel on the federal funds management office which has been present during prior audit periods, the early retirement program established under Act No. 80 of August 3, 2020 – “Law for Incentivized Retirement Program and Justice for Our Servants” (Act No. 80), and the resignation of some personnel from their occupied position and left the Authority willingly as stated in finding 2025-004 are the main causes for the condition. Effect Inadequate accounting and controls over federal funds can cause incorrect revenue recognition as capital advances are recognized as revenue when used appropriately and not when received. In addition, this can cause amounts to be included on the Schedule incorrectly as some of the activities received as capital advances have not actually occurred. It also creates risk of allocating funds in the incorrect federal awards as some of these have similar uses and assistance listing numbers. Also, the Authority could be subject to penalties or sanctions from the Federal Grantor. Puerto Rico Ports Authority (A Component Unit of the Commonwealth of Puerto Rico) Schedule of Findings and Questioned Costs – (Continued) Year Ended June 30, 2025 - 104 - Part III – Federal Award Findings and Questioned Costs – (continued) Finding No: 2025-006 – Internal control deficiencies over accounting for federal funds received Context The Authority recognized as federal award revenue of $6 million approximately, as contributions from the Commonwealth of Puerto Rico and therefore were originally not included in the Schedule. Also, $211,853 on the bank accounts where FEMA funds were deposited had to be returned since the funds cannot be deposited in an interest-bearing account. Journal entry recognizing this return was subsequently recorded through a post-closing entry dated January 26, 2026. Identification of repeat finding This is a repeat finding from the immediate previous audit, Finding 2025-006 Questioned costs None as adjustments were made during the audit to correct the misstatement. Recommendation We recommend the Authority’s Federal Funds Management Office (FFMO) and finance department coordinate with the external consultant who handles federal funds received from FEMA to better identify and classify funds received. In addition, we recommend the Authority to address the FFMO personnel limitations by hiring additional personnel for the Authority, re-shifting task between current personnel or by relaying on outsourced third party providers. Views of responsible officials and planned corrective actions We agreed with the auditors’ finding and recommendation. See further details regarding this matter within the Corrective Action Plan provided on pages 108-114.
Finding No: 2025-007 – Lack of controls over minimizing the time elapsing between the transfer of funds from the pass-through entity and the disbursement of funds by the Authority . CFR Part 200 Subpart D Subsection 200.305 states the following: 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 pass-through 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. See § 200.302(b)(6). Except as noted in this part, the Federal agency must require recipients to use only OMB-approved, government-wide information collections to request payment. 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. Whenever possible, advance payment requests by the recipient or subrecipient must be consolidated to cover anticipated cash needs for all Federal awards received by the recipient from the awarding Federal agency or pass-through entity. During our audit procedures, we identified that most capital advances received during fiscal years 2025 and 2024 from FEMA were still unused on June 30, 2025, with no procedures to minimize the time elapsing between funds received and disbursed. In addition the Authority had to returned unused funds to the pass through entity since they remained unused for more than a year.
Finding 2025-003 – U.S. Department of Education (ED) – Federal Work-Study - Noncompliance With Cash Management (Material Weakness): Information on the federal program –Federal Work-Study, FAL No. 84.033, June 30, 2025. Criteria – The Uniform Guidance (§200.305(b)) requires non-Federal entities to minimize the time elapsing between the drawdown of federal funds and the disbursement of those funds for program purposes. For the Federal Work-Study Program, institutions are required to draw federal funds only as funds are needed to reimburse allowable student payroll costs and related employer share expenses and to promptly disburse or return excess federal funds. Condition – As of June 30, 2025, the College reported excess federal cash of $415,971 related to the Federal Work-Study Program. The excess cash represented cumulative federal funds drawn down through the federal payment system that were not disbursed for allowable Federal Work-Study payroll costs as of year-end. The excess cash balance included amounts related to prior award years that had not been fully liquidated through reimbursement of allowable student wage expenditures or returned to the U.S. Department of Education as of June 30, 2025. Cause – The excess cash condition resulted from insufficiently effective cash-management monitoring controls over the Federal Work-Study Program. While allowable payroll expenditures were incurred and supported, cumulative federal draw activity was not adjusted on a sufficiently timely basis to ensure ongoing compliance with 2 CFR §200.305(b). Effect - As a result, the College held federal funds for an extended period beyond immediate program needs, resulting in noncompliance with federal cash-management requirements. Holding excess federal cash increases the risk that federal funds are not administered in accordance with applicable regulations and oversight expectations. Questioned Costs – $415,971 Repeat Finding – Yes. Auditor’s Perspective – From the auditors’ perspective, the excess federal cash balance identified represents a material weakness in cash-management controls over the Federal Work-Study Program. Although the College incurred allowable and supported Federal Work-Study payroll expenditures, routine cash-management procedures did not sufficiently ensure that federal funds were drawn only as needed and promptly liquidated. Government Auditing Standards and the Uniform Guidance emphasize the importance of effective monitoring controls to prevent the accumulation of excess federal cash and to ensure compliance with cash-management requirements. Auditor’s Recommendations – The auditors recommend that the College implement and document routine cash-management reconciliation procedures for the Federal Work-Study Program. At a minimum, reconciliations should be performed regularly between federal drawdowns, allowable payroll expenditures, and amounts subject to liquidation or return. Management review and approval of these reconciliations should be documented to ensure ongoing compliance with 2 CFR §200.305(b). Views of Responsible Officials – The College requests drawdowns for the Federal Work- Study Program on a reimbursable basis, including review and approval procedures. Of the total amount identified, $26,466 related to FY 2025, with the balance relating to prior year(s) activity. The College will review its Federal Work-Study Program cost allocation procedures to ensure all eligible costs are properly identified and supported. The College has engaged two accounting firms to assist with staff training and bring all reconciliations current. In addition, standard month-end and year-end closing procedures will be implemented to address timely, accurate Federal Work-Study Program reconciliations and audit readiness going forward.
Finding 2025-004 – Various Federal Programs: Cash Management – Excess Federal Cash, Untimely Reconciliations (Material Weakness): Information on the federal program – Strengthening Historically Black Colleges and Universities (HBCUs), (Title III), FAL No. 84.031B, June 30, 2025; Historically Black Colleges and Universities (HBCU) (FUTURE ACT), FAL No. 84.031E, June 30, 2025; Minority Science and Engineering Improvement Program (MSEIP), FAL No. 84.120A, June 30, 2025; Science Consortium of Minority Schools, FAL No. 84.120A, June 30, 2025; Empowerment of Undergraduate STEM Majors through Scholarships and Strengthening STEM Identity, FAL No. 47.076, June 30, 2025; Tennessee Louis Stokes (TSLAMP), FAL No. 47.076, June 30, 2025. Criteria – 2 CFR §200.303 requires non-Federal entities to establish and maintain effective internal control over federal awards. 2 CFR §200.305(b) requires that payments be limited to the minimum amounts needed and timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity. 2 CFR §200.308 requires that expenditures remain within approved budget limits unless prior approvals are obtained. Condition – At June 30, 2025, the College maintained excess federal cash balances across multiple federal programs, indicating that cash drawdowns and/or payable balances were not aligned with immediate cash needs for allowable program expenditures. These balances represented federal funds drawn or recorded as payable to federal agencies that were not supported by actual and immediate allowable program expenditures at year-end. The following table summarizes excess federal cash balances identified by program as of June 30, 2025: "Minority Science and Engineering Improvement Program" 120,031 "Science Consortium of Minority Schools" 169,907 "NSF - Empowerment of Undergraduate STEM Majors" 94,801 "NSF - Tennessee Louis Stokes TSLAMP" 54,834 "Title 111" 455,679 "FUTURE" 188,215 "Total Identified Excess Cash" "$ 1,083,467" Condition – (Continued) The College did not adequately reconcile federal cash activity to underlying grant expenditures on a timely basis and did not ensure that drawdowns were limited to amounts necessary to meet immediate cash needs. In addition, the College lacked effective monitoring controls to identify and resolve excess cash positions across federal programs in a timely manner. Federal bank reconciliations were untimely and error-prone. Corrections occurred only after auditor inquiry. Federal accounts also earned excess interest. Cause – The College lacked sufficient policies, procedures, and supervisory review controls to ensure that federal cash drawdowns were based on actual expenditures, that federal cash and grant reconciliations were prepared timely and accurately. Additionally, monitoring controls over cash balances, interest tracking and remittance were not effectively designed or implemented across federal programs. Effect – The lack of effective controls over federal cash management resulted in excess cash being maintained beyond immediate program needs. These conditions increase the risk of noncompliance with federal requirements, including potential return of excess cash or disallowed costs, and increase the risk of material misstatement of federal expenditures and cash balances. Questioned Costs – $1,083,467 Repeat Finding – No Auditor’s Perspective – From a compliance perspective, maintaining excess federal cash balances indicates that the College’s internal control over compliance did not operate effectively during the audit period. The condition demonstrates that drawdowns were not consistently based on actual incurred costs and that monitoring over federal cash was not functioning as designed. Given the pervasiveness of these conditions across multiple programs, this represents a systemic control deficiency. In accordance with 2 CFR §200.303 and auditing standards, this condition constitutes a material weakness in internal control over compliance. Auditor’s Recommendation – We recommend that the College strengthen controls over federal cash management and budget monitoring by implementing procedures to ensure that drawdowns are based on actual allowable expenditures and limited to immediate cash needs. Management should establish and enforce timely grant and federal bank reconciliation processes, monitor interest earnings and federal cash balances, and implement supervisory review controls to ensure compliance with federal requirements across all programs. Views of Responsible Officials – The College requests drawdowns for Title III and FUTURE programs on a reimbursable basis, including review and approval procedures. Of the total amount identified for the Title III program, a $181,433 receivable related to FY2025. The balance related to prior year(s) activity. The College will review its Federal program cost allocation procedures to ensure all eligible costs are properly identified and supported. The College has engaged two accounting firms to assist with staff training and bring all reconciliations current. In addition, standard month-end and year-end closing procedures will be implemented to address timely, accurate Federal program reconciliations and audit readiness going forward. The College experienced significant staff turnover within the business office. In addition, the College is undergoing conversion to a new Enterprise Resource Planning (ERP) system which affected its ability to complete some functions within a timely manner.
AL 93.354 – Material Weakness - Cash Management Criteria: Per 2 CFR 200.305(b), non-Federal entities must minimize the time elapsing between the transfer of funds from the pass-through entity and disbursement for program purposes. Funds under this grant should only be requested to reimburse expenditures for services that have already been provided. Condition: During our testing, we noted the Kentucky Health Departments Association (KHDA) drew down federal funds in excess of actual expenditures under the grant during the year ended June 30, 2025. As of June 30, 2025, cumulative drawdowns exceeded cumulative allowable expenditures by approximately $98,989. Cause: KDHA did not have adequate internal control procedures in place to ensure drawdowns were limited to expenditures for services that had already been provided. Effect: KHDA was not in compliance with federal cash management requirements. KHDA must spend the excess reimbursements on allowable grant expenses prior to the end of the grant’s period of performance, or KHDA may be required to return those funds to the grantor. Recommendation: We recommend KHDA implement procedures to ensure drawdowns are limited to immediate cash needs and are supported by actual expenditures incurred prior to the date of the drawdown. Management should periodically reconcile cumulative drawdowns to expenditures. Management’s Response: Staff have been trained on the federal requirements, and the organization has updated internal policies to reflect the compliance requirements. A Finance Committee has been formed to oversee federal compliance issues.
AL 93.354 – Material Weakness - Cash Management Criteria: Per 2 CFR 200.305(b), non-Federal entities must minimize the time elapsing between the transfer of funds from the pass-through entity and disbursement for program purposes. Funds under this grant should only be drawn down to meet immediate cash needs. Condition: During our testing, we noted the Kentucky Health Departments Association (KHDA) drew down federal funds without minimizing the amount of time between when those funds were received, and when they were disbursed for program purposes. During the year ended June 30, 2025, we noted approximately $163,690 of drawdowns that were not disbursed within thirty days of when the transfer of funds was received from the pass-through entity, which is the period of time KHDA determined be administratively feasible. Cause: KDHA did not have adequate internal control procedures in place to ensure drawdowns were limited to immediate cash needs and that disbursements for program purposes limited the time elapsing from when funds were received from the pass-through entity. Effect: KHDA was not in compliance with federal cash management requirements. These practices may subject KHDA to financial sanctions, repayment of excess funds, or increased oversight by the pass-through entity. Recommendation: We recommend KHDA implement procedures to ensure drawdowns are limited to immediate cash needs and that all program disbursements are scheduled to minimize the time elapsing between the transfer of funds from the pass-through entity and disbursement for program purposes. Management’s Response: Staff have been trained on the federal requirements, and the organization has updated internal policies to reflect the compliance requirements. A Finance Committee has been formed to oversee federal compliance issues.
EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 to 2027 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) IMMUNIZATION COOPERATIVE AGREEMENTS – 93.268 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 to 2025 Federal Award Number: NH23IP922618 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirement: Cash Management CONTROLS OVER CASH MANAGEMENT REQUIREMENTS RIDOH controls over cash management are lacking to ensure records and support are accurate, complete, and in compliance with federal requirements. RIDOH could not provide adequate supporting documentation for several drawdowns made during fiscal 2025. Background: RIDOH has constructed comprehensive workbooks, Uniform Grant Spreadsheets (UGS) / Monthly Federal Grants Tracking (MFGT), to assist in monitoring award activity throughout the period of performance. Agency staff populate the UGS/MFGT workbooks with transactional information (expenditures) from the State’s accounting system. Accounting details maintained in the UGS are utilized to reconcile and determine the amounts available for proper cash drawdowns. RIDOH has historically performed federal funding draws for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and Immunization Cooperative Agreements (Immunization) programs monthly. During fiscal 2025, RIDOH, on occasion, drew down funds during the month due to concerns over funding availability by the federal government to ensure that resources were available to sustain current program operations. Criteria: Federal regulation 2 CFR §200.305(b) requires recipients of federal awards to minimize the time elapsing between the transfer of federal funds from the federal government and the disbursement of those funds for program purposes. Reimbursement requests must be supported by allowable expenditures incurred under the federal award, and recipients are required to maintain adequate records to demonstrate compliance with federal cash management requirements. Condition: Internal control over cash management was insufficient to ensure compliance with federal regulations. Populating UGS spreadsheets is a manual process and lacks the required access, data integrity, and other monitoring controls necessary to ensure the accuracy of the recorded activity and subsequent calculations contained within. Additionally, these tracking tools are not designed to accurately track and record the required support for drawdowns outside the scheduled monthly payment requests. Cash drawdown records were not adequately maintained, limiting our ability to substantiate RIDOH’s drawdown requests through supporting documentation or the State’s accounting system. As part of our sample testing, we noted the following: • For the ELC program, 3 out of a sample of 13 (23%) lacked adequate support for drawdowns, 1 of which included a mid-month drawdown inclusive of future expenditures. • For the Immunization Cooperative Agreements program, 7 out of a sample of 12 (58%) lacked adequate support for drawdowns, 4 of which included mid-month drawdowns inclusive of future expenditures. Attempts to reconcile unsupported drawdown amounts with RIDOH were unsuccessful. While RIDOH was unable to specifically detail the expenditures incurred in support of a large percentage of draws, the supporting documentation for several draws indicated that projected future expenditures were included in some amounts drawn. Our audit results noted a significant percentage of drawdowns without adequate supporting documentation that we deemed to represent material noncompliance for both ELC and Immunization with federal requirements for cash management. In support of our finding that RIDOH drew down federal funds in advance of expenditure disbursement, the State’s monitoring in relation to the Cash Management Improvement Act also identified the ELC program as having drawn federal funds in excess of reported expenditures during the year. The State’s monitoring reported excess cash on hand for the ELC program collectively for 3 days during fiscal 2025. A review of the individual accounts in the State accounting system representing the various grants incorporated under the collective program noted a large number of individual grant awards where federal revenue far exceeded the expenditures reported for those accounts. The underlying accounting detail suggests that RIDOH was not reconciling its federal accounts in a timely manner to ensure that grants were not being overdrawn. Several federal accounts were reporting overdrawn funds at year-end in need of reconciliation. Cause: RIDOH did not establish and maintain adequate controls to ensure that federal reimbursement requests were supported by expenditures incurred at the time of the drawdown and that sufficient documentation was retained to support the amounts requested. Deficiencies in internal controls coupled with the use of estimates and spending projections, resulted in unsupported and excessive draws deemed noncompliance with federal cash management requirements. Personnel changes, in conjunction with a lack of documented policies and procedures, during fiscal 2025 contributed to cash management difficulties cited above. Effect: Noncompliance with federal requirements, specifically 2 CFR §200.305(b), for cash management going undetected by program management. Questioned Costs: None Valid Statistical Sample: Not Applicable RECOMMENDATIONS 2025-044a Document and implement formal policies and procedures over federal drawdowns to ensure compliance with federal regulations. 2025-044b Reconcile grant awards reporting excess cash drawdowns at June 30, 2025, and adjust amounts accordingly to ensure accurate grant award tracking for the ELC and Immunization programs.
Compliance Requirement C. Cash Management Finding Type Material Weakness in Internal Control Over Compliance and Compliance Finding Federal Agency U.S. Department of Health and Human Services Federal Program Title Administration for Children & Families - Head Start Assistance Listing Number 93.600 Criteria: The Organization receives federal assistance from the Department of Health and Human Services. The Organization requests draw down of grant funds based on actual expenditures incurred. The Organization is required to maintain adequate internal controls over financial reporting in order to ensure expenditures are properly supported, reported under the correct funding source, and within the correct grant period. 2 CFR 200.403 details the factors affecting the allowability of cost. Specifically, 2 CRF 200.403(e) provides that costs must be determined in accordance with generally accepted accounting principles (GAAP). GAAP provides that costs are not incurred until the services are performed or the product is received. In addition, Uniform Guidance 200.305(b)(1) states advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. Condition: During audit procedures, we noted total reimbursements received exceeded expenditures. The Organization requested reimbursements but could not provide supporting documentation as to how the amount requested for reimbursement of costs was determined. We consider this to be a material weakness. Cause: The Organization lacks established procedures which provide formal evidence that the accuracy and completeness of internal reports used to support reimbursement requests were verified, reviewed and approved before grant draw downs were requested. Effect: Without formal review controls in place, the Organization is more susceptible to reporting errors and/or noncompliance with federal requirements. Questioned Costs: $ 329,233 Identification as a Repeat Finding: This was reported as a finding in the prior audit report. Content: During the year ended June 30, 2024, the Organization received funds of $ 562,831 in excess of expenditures incurred. Subsequent to June 30, 2024, $ 346,944 of those funds were obligated and expended, leaving a remaining balance of $ 215,887. During the year ended June 30, 2025, the Organization requested and received reimbursements in excess of expenditures of $ 329,233. Recommendations: We recommend that the Organization implement a formal process for verifying the accuracy and completeness, and review of supporting documentation used to justify draw down requests. A reconciliation should be prepared of the expenditures recorded on the books and records to the amount submitted for reimbursement on a regular basis. All excess; unexpended funds should be returned to remain in compliance. All supporting documentation should be maintained for future reference. View of Responsible Officials: The Organization agrees with this audit finding.
Finding 2025-003 – U.S. Department of Education (ED) – Federal Work-Study - Noncompliance With Cash Management (Material Weakness): Information on the federal program –Federal Work-Study, FAL No. 84.033, June 30, 2025. Criteria – The Uniform Guidance (§200.305(b)) requires non-Federal entities to minimize the time elapsing between the drawdown of federal funds and the disbursement of those funds for program purposes. For the Federal Work-Study Program, institutions are required to draw federal funds only as funds are needed to reimburse allowable student payroll costs and related employer share expenses and to promptly disburse or return excess federal funds. Condition – As of June 30, 2025, the College reported excess federal cash of $415,971 related to the Federal Work-Study Program. The excess cash represented cumulative federal funds drawn down through the federal payment system that were not disbursed for allowable Federal Work-Study payroll costs as of year-end. The excess cash balance included amounts related to prior award years that had not been fully liquidated through reimbursement of allowable student wage expenditures or returned to the U.S. Department of Education as of June 30, 2025. Cause – The excess cash condition resulted from insufficiently effective cash-management monitoring controls over the Federal Work-Study Program. While allowable payroll expenditures were incurred and supported, cumulative federal draw activity was not adjusted on a sufficiently timely basis to ensure ongoing compliance with 2 CFR §200.305(b). Effect - As a result, the College held federal funds for an extended period beyond immediate program needs, resulting in noncompliance with federal cash-management requirements. Holding excess federal cash increases the risk that federal funds are not administered in accordance with applicable regulations and oversight expectations. Questioned Costs – $415,971 Repeat Finding – Yes. Auditor’s Perspective – From the auditors’ perspective, the excess federal cash balance identified represents a material weakness in cash-management controls over the Federal Work-Study Program. Although the College incurred allowable and supported Federal Work-Study payroll expenditures, routine cash-management procedures did not sufficiently ensure that federal funds were drawn only as needed and promptly liquidated. Government Auditing Standards and the Uniform Guidance emphasize the importance of effective monitoring controls to prevent the accumulation of excess federal cash and to ensure compliance with cash-management requirements. Auditor’s Recommendations – The auditors recommend that the College implement and document routine cash-management reconciliation procedures for the Federal Work-Study Program. At a minimum, reconciliations should be performed regularly between federal drawdowns, allowable payroll expenditures, and amounts subject to liquidation or return. Management review and approval of these reconciliations should be documented to ensure ongoing compliance with 2 CFR §200.305(b). Views of Responsible Officials – The College requests drawdowns for the Federal Work- Study Program on a reimbursable basis, including review and approval procedures. Of the total amount identified, $26,466 related to FY 2025, with the balance relating to prior year(s) activity. The College will review its Federal Work-Study Program cost allocation procedures to ensure all eligible costs are properly identified and supported. The College has engaged two accounting firms to assist with staff training and bring all reconciliations current. In addition, standard month-end and year-end closing procedures will be implemented to address timely, accurate Federal Work-Study Program reconciliations and audit readiness going forward.
Finding 2025-004 – Various Federal Programs: Cash Management – Excess Federal Cash, Untimely Reconciliations (Material Weakness): Information on the federal program – Strengthening Historically Black Colleges and Universities (HBCUs), (Title III), FAL No. 84.031B, June 30, 2025; Historically Black Colleges and Universities (HBCU) (FUTURE ACT), FAL No. 84.031E, June 30, 2025; Minority Science and Engineering Improvement Program (MSEIP), FAL No. 84.120A, June 30, 2025; Science Consortium of Minority Schools, FAL No. 84.120A, June 30, 2025; Empowerment of Undergraduate STEM Majors through Scholarships and Strengthening STEM Identity, FAL No. 47.076, June 30, 2025; Tennessee Louis Stokes (TSLAMP), FAL No. 47.076, June 30, 2025. Criteria – 2 CFR §200.303 requires non-Federal entities to establish and maintain effective internal control over federal awards. 2 CFR §200.305(b) requires that payments be limited to the minimum amounts needed and timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity. 2 CFR §200.308 requires that expenditures remain within approved budget limits unless prior approvals are obtained. Condition – At June 30, 2025, the College maintained excess federal cash balances across multiple federal programs, indicating that cash drawdowns and/or payable balances were not aligned with immediate cash needs for allowable program expenditures. These balances represented federal funds drawn or recorded as payable to federal agencies that were not supported by actual and immediate allowable program expenditures at year-end. The following table summarizes excess federal cash balances identified by program as of June 30, 2025: "Minority Science and Engineering Improvement Program" 120,031 "Science Consortium of Minority Schools" 169,907 "NSF - Empowerment of Undergraduate STEM Majors" 94,801 "NSF - Tennessee Louis Stokes TSLAMP" 54,834 "Title 111" 455,679 "FUTURE" 188,215 "Total Identified Excess Cash" "$ 1,083,467" Condition – (Continued) The College did not adequately reconcile federal cash activity to underlying grant expenditures on a timely basis and did not ensure that drawdowns were limited to amounts necessary to meet immediate cash needs. In addition, the College lacked effective monitoring controls to identify and resolve excess cash positions across federal programs in a timely manner. Federal bank reconciliations were untimely and error-prone. Corrections occurred only after auditor inquiry. Federal accounts also earned excess interest. Cause – The College lacked sufficient policies, procedures, and supervisory review controls to ensure that federal cash drawdowns were based on actual expenditures, that federal cash and grant reconciliations were prepared timely and accurately. Additionally, monitoring controls over cash balances, interest tracking and remittance were not effectively designed or implemented across federal programs. Effect – The lack of effective controls over federal cash management resulted in excess cash being maintained beyond immediate program needs. These conditions increase the risk of noncompliance with federal requirements, including potential return of excess cash or disallowed costs, and increase the risk of material misstatement of federal expenditures and cash balances. Questioned Costs – $1,083,467 Repeat Finding – No Auditor’s Perspective – From a compliance perspective, maintaining excess federal cash balances indicates that the College’s internal control over compliance did not operate effectively during the audit period. The condition demonstrates that drawdowns were not consistently based on actual incurred costs and that monitoring over federal cash was not functioning as designed. Given the pervasiveness of these conditions across multiple programs, this represents a systemic control deficiency. In accordance with 2 CFR §200.303 and auditing standards, this condition constitutes a material weakness in internal control over compliance. Auditor’s Recommendation – We recommend that the College strengthen controls over federal cash management and budget monitoring by implementing procedures to ensure that drawdowns are based on actual allowable expenditures and limited to immediate cash needs. Management should establish and enforce timely grant and federal bank reconciliation processes, monitor interest earnings and federal cash balances, and implement supervisory review controls to ensure compliance with federal requirements across all programs. Views of Responsible Officials – The College requests drawdowns for Title III and FUTURE programs on a reimbursable basis, including review and approval procedures. Of the total amount identified for the Title III program, a $181,433 receivable related to FY2025. The balance related to prior year(s) activity. The College will review its Federal program cost allocation procedures to ensure all eligible costs are properly identified and supported. The College has engaged two accounting firms to assist with staff training and bring all reconciliations current. In addition, standard month-end and year-end closing procedures will be implemented to address timely, accurate Federal program reconciliations and audit readiness going forward. The College experienced significant staff turnover within the business office. In addition, the College is undergoing conversion to a new Enterprise Resource Planning (ERP) system which affected its ability to complete some functions within a timely manner.
Finding 2025-003: Unallowable Costs / Cash Management (Material Weakness) Information on the Federal Programs: Assistance Listing Number 98.001 Criteria: According to Uniform Guidance (2 CFR 200.305(b)), internal controls over cash management should ensure that all drawdowns are approved by designated personnel to prevent improper or premature use of Federal funds. Condition: During our review of Federal grant drawdowns, it was noted that several drawdowns were processed without obtaining the required internal approvals as outlined in Astraea's cash management policies and procedures. Cause: Astraea’s cash management procedures were not consistently followed, leading to missed approvals for certain drawdowns. Effect: Drawdowns without proper internal approval increase the risk of non-compliance with Federal cash management requirements and could result in unauthorized or inaccurate fund usage. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: Finding 2024-004 Recommendation: Astraea should reinforce cash management controls by ensuring all Federal drawdowns obtain the appropriate internal approvals before processing. This can be achieved by implementing a checklist or automated workflow to verify compliance with approval requirements.
Finding 2025-005: Inadequate Controls Over Federal Reimbursement Draw Requests - Significant Deficiency Federal Program: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.243 Federal Agency: U.S. Department of Health and Human Services Federal Award Identification Numbers: 5H79TI084239-03, 5H79TI084239-04, 5H79TI084739-02, 5H79TI084739-03, 5H79TI082707-05 Award Year: 2024 and 2025 Criteria: Per 2 CFR § 200.305(b), payment methods must minimize the time elapsing between the transfer of federal funds and the disbursement of those funds by the recipient. For reimbursement payment methods, draw requests should be based solely on allowable, allocable, and paid expenditures. Effective internal controls, as required by 2 CFR § 200.303, include supervisory review of supporting documentation to verify the accuracy, completeness, and allowability of expenditures prior to submitting reimbursement requests. Condition: For 10 of 10 reimbursement draw requests tested, Mending Hearts’ did not maintain controls to ensure draw requests were supported by a review of actual expenditures paid prior to submission. Specifically, reimbursement requests were not tied directly to actual expenditures incurred and paid by Mending Hearts. In addition, there was no documented review of supporting invoices, payment documentation, schedules, or other reports to verify that expenditures had been paid with Mending Hearts’ funds before reimbursement was requested. Cause: Management has not established or implemented formal procedures requiring reimbursement requests to be reconciled to paid expenditures and independently reviewed prior to submission. Effect: Without adequate review procedures, Mending Hearts is at increased risk of requesting reimbursement for expenditures that have not yet been paid, are unsupported, or are otherwise unallowable. This increases the risk of noncompliance with federal cash management requirements and may result in questioned costs, repayment of federal funds, or other administrative action. Questioned Costs: None noted. Context: This condition was identified through testing of 10 reimbursement draw requests selected from the population of federal reimbursement requests submitted during the audit period. Exceptions were noted in all 10 items tested. The transactions tested were selected using a nonstatistical sampling approach and were not intended to be statistically representative of the population. Recommendation: We recommend that management implement formal cash management procedures requiring all reimbursement draw requests to be supported by detailed expenditure schedules and documentation demonstrating that expenditures have been paid with Organization funds. Prior to submitting reimbursement requests, an independent review should be performed and documented to verify that all requested amounts are accurate, supported, allowable, and based on actual paid expenditures. Views of Responsible Officials: Management acknowledges this finding and will address remediation in management's corrective action plan.
FA 2025-003 Strengthen Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425U210012 (Year: 2024) Questioned Costs: $52,211 Description: The School District made cash drawdowns in excess of the immediate cash needs of the Elementary and Secondary School Emergency Relief Fund program. Background Information: The School District may request Elementary and Secondary School Emergency Relief program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE- 0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the Elementary and Secondary School Emergency Relief program funds are typically disbursed to the School District through an electronic payment process the next week. Criteria: As a recipient of federal awards, the School District is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance Section 200.305(b) state, “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 pass-through entity and the disbursement by the recipient or subrecipient…” In addition, the Uniform Guidance Section 200.302(b)(6) requires that the entity develop written cash management procedures. Condition: A review of all cash drawdowns and disbursements related to the Elementary and Secondary School Emergency Relief program was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Excessive cash balances at fiscal year-end totaled $52,211. Questioned Costs: Questioned costs of $52,211 were identified for cash drawdowns in excess of reimbursable expenditures. Cause: Excess cash drawdowns resulted from failure to follow established procedures and claiming expenditures on completion reports that were not based on actual general ledger expenditures. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. Recommendation: The School District should follow established procedures to accurately forecast the cash needs of the Elementary and Secondary School Emergency Relief program and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
CFDA Number: 93.224 Federal Program or Cluster: Health Center Program Cluster Grantor Agency: U.S. Department of Health and Human Services Federal Award Identification: H8FCS41177 Compliance Requirements: Cash Management Type of Finding: Noncompliance/Material Weakness in Internal Control over Compliance Questioned Costs: None Criteria: Per 2 CFR Part 200, Section 200.305, Federal payment, "payment methods must minimize the time elapsing between the transfer of funds from the Federal agency...and the disbursement of funds by the recipient… 2 CFR Part 200, Section 200.302(b)(6) also requires written procedures to implement the requirements of Section 200.305. Per HHS Grant Policy Statement: “In accordance with Dept of Treasury regulations, you must draw federal cash only for your immediate needs. At the time of draw down, you will certify you will not hold cash beyond three working days… Do not request cash to cover unliquidated encumbrances, obligation, or accrued expenditures until payment is pending”. Condition: On June 30, 2024, the Organization drew the remaining H8F funds of $1,253,464, and recorded this amount as a credit to a balance sheet account, indicating these were unspent or unearned grant funds. Throughout the year ended May 31, 2025, as expenditures were made, the Organization recorded debits to this balance sheet account, crediting a grant revenue account. The Organization's internal controls over compliance failed to prevent, or detect and correct, this noncompliance. Cause: Organization personnel were not aware of the cash management compliance requirement with respect to this federal award. The Organization's previous CEO retired approximately May 31, 2024. Per inquiry of the Organizaton's CFO, their understanding was that the deadline to obligate for this federal award was December 31, 2024, and the deadline to expend or liquidate was December 31, 2026, and they were spreading it out to what they thought was the deadline. Effect or Potential Effect: By drawing federal award funds prior to expenditure, the Organization did not comply with the requirements of 2 CFR Part 200, Section 200.305, Federal payment and of the HHS Grants Policy Statement. Context: Draws for this Federal award were taken in July, 2024 for $1,270,464. We requested supporting detail of the $1,270,464 expenditures made during the year for this Federal award as reported in the Schedule of Expenditures of Federal Awards. We received a spreadsheet that contained a list of 26 descriptions and amounts, but no transactional detail such as check numbers, check dates, payee, invoice number, invoice date, etc. After determining the check numbers and check dates for 9 of the 26 items in the spreadsheet, we noted that disburesments for 8 of those 9 occurred more than 3 days after the date the draw, with 2 disbursements made more than 5 months after the date of the draw. Repeat Finding? No Recommendation: We recommend that the Organization provide grants management training to all its financial staff and management covering the Uniform Guidance/OMB Guidance for Federal Financial Assistance. We also recommend that the Organization develop and implement policies and procedures that ensure grant funds are drawn at the time of, or following, expenditures for allowable costs by the Organization. These policies and procedures should include that, for each draw from a Federal award, 1) detailed documentation of the expenditures for which the grant funds are being drawn is prepared prior requesting the draw, including transactional details such as vendor, invoice number, invoice amount, check number, check date, payee, and check amount; 2) that the documentation supporting the draw is reviewed and approved by a member of management (other than the person who prepares the documentation) prior to requesting the draw, and 3) that the documentation supported each draw is maintained as part of the Organization's accounting records. Views of Responsible Officials: We agree with the finding. We have never received proper training. See Corrective Action Plan for Reference 2025-005.
2025-001: U.S. Department of Health and Human Services, National Institutes for Health Research and Development Cluster, Cancer Control, Assistance Listing #93.399; Lack of Required Written Policies Condition Montana Cancer Consortium (the Consortium) does not have written policies and procedures in place as required by 2 CFR § 200.302 and § 200.313. Specifically, the Consortium lacks documented policies for: • The timing of federal cash draws; • The allowability of costs charged to federal awards; and • Documentation of time-and-effort for personal services. Criteria 2 CFR § 200.302(b)(6)–(7) requires nonfederal entities to have written procedures for: (a) cash drawdowns and (b) determining cost allowability. § 200.305 requires written cash-management procedures that minimize the time between draw and disbursement. § 200.430 requires a written policy that is consistently applied to both federal and nonfederal activities for documentation of compensation for personal services. Context At the time of completion of the audit for the year ended May 31, 2025, the written policies were not in place. We noted that the policies were implemented on December 1, 2025, which was after the fiscal year under audit had ended. Cause The Consortium has not yet developed or adopted the required written policies due to limited administrative capacity and reliance on informal practices. Effect The absence of written policies increases the risk of noncompliance with federal requirements, mismanagement of federal funds, and audit findings in future periods. It may also impair the Consortium’s ability to consistently apply federal cost principles and properly safeguard assets. Recommendation We recommend that the Consortium develop and implement written policies and procedures that comply with the requirements of Uniform Guidance. Management Response See Corrective Action Plan.
Finding Number: 2025-001 Award Identification: Assistance listing program title and number: NSF Technology, Innovation, and Partnerships – 47.084 Federal award identification number: 2303493 Award Date: May 9, 2023 Name of the federal agency: National Science Foundation Repeat Finding: No Questioned Costs: There are no questioned costs related to this finding Type of Finding: Significant Deficiency in Internal Control over Cash Management Criteria: Section 2 CFR 200.305 establishes the requirements over the management of federal payments. Under this regulation, the grantee must minimize the time lapse between the draw down of federal funds and the disbursement of those funds as well as demonstrate written procedures and a system of financial management that meets control and accountability requirements. Condition: While testing of internal controls over cash management it was noted that the Center did not follow the procedures in place for the draw down of federal funds. Cause: The Center was guided by the NSF program manager to draw down the funds as they became available in accordance with the grant agreement as opposed to following procedures in accordance with Section 2 CFR 200.305. Effect: The Center did not incur the costs in-line with the draw down of federal funds. Recommendation: We recommend the Center follow cash management procedures in accordance with Section 2 CFR 200.305. These procedures should ensure that funds are drawn on a reimbursement basis, supported by actual expenditures incurred or very soon to be incurred and paid. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Material Weakness Finding: 2025-002 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement Assistance Listing No. 93.912 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: The Organization did not reconcile federal grant expenditures in a timely manner, resulting in a lack of draws of federal funds for which qualifying expenditures had been made prior to the end of the Organization’s financial statement year end. This resulted in unrecorded revenue and receivables of approximately $224,564 at March 31, 2025. Without proper reconciliations and timely draws of federal grant funds, the Organization could be impacted by lost federal funding. Cause: The Organization did not reconcile federal grant expenditures or make federal grant draws in a timely manner. Effect: The Organization failed to properly recognize federal grant revenue and receivables of $224,564. Questioned Costs: None Context/Sampling: Not applicable. Repeat Finding from Prior Year: No Recommendation: The Organization should ensure that qualifying expenditures are reconciled, recorded in the Organization’s financial statements, and drawn from the Payment Management System in a timely manner. Views of Responsible Officials: The Organization understands the importance of timely reconciliations of federal grant expenditures and timely draws of federal grant funds. The Organization will review its processes and procedures to ensure that federal grants are reconciled in a timely manner. Contact Person: Brian Morton, CFO Anticipated Date of Completion: November 30, 2025
Material Weakness Finding: 2025-002 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Department of Health and Human Services Grants for Capital Development in Health Centers Assistance Listing No.- 93.526 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: The Organization made three draws of federal funds for which qualifying expenditures were not made prior to the end of the Organization’s financial statement year end. This resulted in excess federal cash on hand at March 31, 2025. The Organization is required to incur qualifying expenditures prior to drawing funds from the U.S. Treasury. Cause: The Organization made drawdowns of federal grant funds for which qualifying expenditures were not incurred. Effect: The Organization held excess federal cash due to lack of qualifying expenditures. Questioned Costs: $430,732. Context/Sampling: Out of 39 drawdowns during the fiscal year, three of the drawdowns were received for expenditures that had yet to be incurred and paid. The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: The Organization should ensure that qualifying expenditures are incurred prior to making the related draws of funds from the U.S. Treasury. Views of Responsible Officials: The Organization understands the requirements to incur qualifying expenditures prior to drawing funds from the U.S. Treasury. Procedures will be established to ensure that excess federal cash is not held by the Organization. Contact Person: Dr. Aretha Powers, CEO Anticipated Date of Completion: November 30, 2025
2025-002 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00540-23, H8GCS48292, H8LCS51370 Criteria Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Condition The Organization was not able to provide documentation for certain cash draws made from the Payment Management System (PMS) to show that expenditures were incurred or expected to be incurred within a minimal amount of time. This finding appears to be a systemic issue. Cause The Organization did not always maintain documentation of the qualifying expenditures used to support amounts drawn from the payment management system. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs $0. Although the auditee did not retain documentation of the expenditures supporting certain draws, our testing indicated that the total program expenditures for the period were sufficient to cover all draws of federal funds under the program in the period. Context For two of six draws tested, the Organization was not able to provide documentation to show that expenses were incurred prior to or within a reasonable time after the draws. Recommendation We recommend the Organization implement controls requiring all draws from the PMS to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation, along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by appropriate personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
CFR section 200.305 requires Public Housing Authorities (PHA) to minimize the time federal funds are drawn down to expenditure. The Public Housing Capital Fund provides guidelines of three business days from draw down to expenditure to minimize the interest accrued by the PHA. Per review of all Public Housing Capital Fund funding received by the Authority we noted $1,024,894 of received funding identified as not being expensed within three business days of being received. 2 CFR Subpart F § 200.510(b) requires the auditee to prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the County’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. Errors and omissions were noted related to various programs on the Authority’s 2025 schedule, including a $816,389 overstatement of expenditures for the Public Housing Capital Fund program. We recommend the Authority implement increased training on the requirements of not drawing down Public Housing Capital Fund funding until either an allowable expenditure has occurred or will occur within three days after the funding was received. We recommend the Authority implement increased training on the requirements for preparing the Schedule of Expenditures of Federal Awards. We also recommend a greater number of quality control reviews to identify errors before requesting funds and preparing the Schedule of Expenditures of Federal Awards.
2025-004 Cash Management (repeat of finding 2024-008) Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition The Organization did not maintain supporting documentation for cash draws made from the Payment Management System (PMS). This finding appears to be a systemic problem. Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs None noted. Context Out of seven draws tested, the Organization was not able to provide any supporting documentation or expenditure detail to support two draws. Due to this, we were unable to verify the time elapsing between the funds transfer from the PMS system and the disbursement of funds. Recommendation We recommend the Organization implement controls requiring all draws from the PMS to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures to be paid or reimbursed. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2025-004 Cash Management (repeat of finding 2024-008) Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition The Organization did not maintain supporting documentation for cash draws made from the Payment Management System (PMS). This finding appears to be a systemic problem. Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs None noted. Context Out of seven draws tested, the Organization was not able to provide any supporting documentation or expenditure detail to support two draws. Due to this, we were unable to verify the time elapsing between the funds transfer from the PMS system and the disbursement of funds. Recommendation We recommend the Organization implement controls requiring all draws from the PMS to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures to be paid or reimbursed. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
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. Additionally, Authority is required to submit annual SF-425 reports within 90 days of the end of the federal fiscal year. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there was one instance 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, 2024 no funds have been returned to U.S. DOT. It was also noted that multiple annual SF-425 reports were submitted late. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2024 and SF-425 reports for all open grants. 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 Yes. Prior audit finding 2023-003. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
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. Additionally, Authority is required to submit annual SF-425 reports within 90 days of the end of the federal fiscal year. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there was one instance 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, 2024 no funds have been returned to U.S. DOT. It was also noted that multiple annual SF-425 reports were submitted late. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2024 and SF-425 reports for all open grants. 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 Yes. Prior audit finding 2023-003. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
2024-002 Twenty-First Century Community Learning Centers – Assistance Listing No. 84.287 Significant Deficiency in Internal Control Over Compliance and Noncompliance – Appropriate Review of Expenditures Claimed B. Allowable Costs/Cost Principles and C. Cash Management Criteria: In accordance with 2 CFR § 200.403(e), expenses must be determined under generally accepted accounting principles (GAAP) to be considered allowable unless otherwise noted in 2 CFR 200. In accordance with 2 CFR § 200.305(b), the draws under reimbursable grants must be limited to the minimum amount needed and drawn down after expenses have incurred. Condition and Context: During our testing of expenses charged to the federal program, we identified one transaction which the Organization prepaid for services to be rendered in 2025. The prepaid expense were charged to the SEFA in 2024 which does not match when they should be recognized as expenses under GAAP. The expenses were claimed for reimbursement prior to being incurred based on GAAP. Total questioned costs for this instance were $8,750. The population was considered the month of December as these were went the prepayments were made. The error rate for the defined population was 93.85% resulting in likely questioned costs of $14,393. Our sample was not statistically valid. Cause and Effect: The issue appears to have resulted from a lack of adequate review procedures to ensure that expenses charged to the federal award align with recognition under GAAP. As a result, the entity claimed expenditures which may be unallowable. Claimed expenditures which may be unallowable and drawn prior to being incurred. Recommendation: We recommend that management strengthen its review procedures over expense cutoff to ensure that expenditures are recognized on the SEFA in alignment with GAAP and are drawn down appropriately under the cost reimbursement method. Additionally, training should be provided to accounting personnel on Uniform Guidance compliance and GAAP requirements related to expense recognition. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and plan to have the corrective action implemented by August 2025.
2024-005 - Lack of Written Federal Policies and Procedures Required by Uniform Guidance Finding Type: Material weakness in internal control over compliance Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Allowable Costs/Cost Principles, Procurement and Suspension and Debarment Condition/Finding: The Village has not developed or implemented the written policies and procedures required under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Required documentation is absent in areas such as internal controls over compliance, cash management, procurement, and allowable costs. Criteria: Per 2 CFR §200.303 and related sections (including §§200.305 and 200.318–320), non-federal entities expending federal awards must establish and maintain effective internal controls and must document policies and procedures governing compliance with applicable federal statutes, regulations, and terms of award. Cause: The Village has not formally developed Uniform Guidance-compliant policies due to limited administrative resources and competing operational priorities. Effect: The absence of formal written policies and procedures increases the risk of inconsistent or noncompliant treatment of federal expenditures. Without documented controls and expectations, the Village may fail to detect or prevent noncompliance with federal requirements in key grant administration areas. Recommendation: We recommend that the Village adopt written policies and procedures addressing the specific requirements outlined in the Uniform Guidance. These policies should include, but not be limited to, internal controls over compliance, procurement, cash management, subrecipient monitoring (if applicable), and allowable cost determinations. Management should ensure that these policies are communicated and periodically reviewed. View of Responsible Officials: Management’s response and planned corrective action can be found in the accompanying Corrective Action Plan.
Criteria: According to 2 CFR §200.305(b), when a non-federal entity receives advance payments of federal funds, it must deposit those funds in interest-bearing accounts, unless certain exceptions apply, and must remit any interest earned on advances in excess of $500 per year to the federal agency. Furthermore, advance payments should be segregated to ensure proper tracking and safeguarding of federal funds. Condition: During our audit of the Organization’s federal awards, we identified deficiencies in the grantee’s cash management procedures related to advance payments received from federal awarding agencies. Specifically, the grantee did not segregate advance payments into separate insured interestbearing accounts as required by the Uniform Guidance. Cause: The Organization did not have adequate policies and procedures or internal controls in place to ensure compliance with the cash management requirements related to advance payments. Effect: The federal awarding agency did not receive interest that could have been earned on the advances. All advances received during 2024 were expended by December 31, 2024. There was no loss from uninsured funds or from lack of segregating funds into separate accounts. Recommendation: We recommend that the Organization implement policies and procedures to ensure that all advance payments are deposited into separate, insured, interest-bearing accounts as required. The Organization should also establish controls to track interest earned on these accounts and remit amounts due to the federal awarding agencies in a timely manner. Training should be provided to staff responsible for cash management to ensure ongoing compliance with federal requirements. Views of Responsible Officials: Management agrees with the finding and procedures have been implemented to address the related issues.
Criteria: According to 2 CFR §200.305(b), when a non-federal entity receives advance payments of federal funds, it must deposit those funds in interest-bearing accounts, unless certain exceptions apply, and must remit any interest earned on advances in excess of $500 per year to the federal agency. Furthermore, advance payments should be segregated to ensure proper tracking and safeguarding of federal funds. Condition: During our audit of the Organization’s federal awards, we identified deficiencies in the grantee’s cash management procedures related to advance payments received from federal awarding agencies. Specifically, the grantee did not segregate advance payments into separate insured interestbearing accounts as required by the Uniform Guidance. Cause: The Organization did not have adequate policies and procedures or internal controls in place to ensure compliance with the cash management requirements related to advance payments. Effect: The federal awarding agency did not receive interest that could have been earned on the advances. All advances received during 2024 were expended by December 31, 2024. There was no loss from uninsured funds or from lack of segregating funds into separate accounts. Recommendation: We recommend that the Organization implement policies and procedures to ensure that all advance payments are deposited into separate, insured, interest-bearing accounts as required. The Organization should also establish controls to track interest earned on these accounts and remit amounts due to the federal awarding agencies in a timely manner. Training should be provided to staff responsible for cash management to ensure ongoing compliance with federal requirements. Views of Responsible Officials: Management agrees with the finding and procedures have been implemented to address the related issues.
2024-004: Written Policies and Procedures – Significant Deficiency Criteria and Condition: 2 CFR 200.302 requires that the recipient or subrecipient’s financial management system must provide written procedures to implement the requirements of 2 CFR 200.305 (Federal payments) and for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. Additionally, 2 CFR 200.318 requires that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. Context: Although the Organization follows procedures that minimize the time between reimbursement of dollars and expenditure (2 CFR 200.305), verify payments made are in accordance with subpart E and terms and conditions of the award, and follow procurement standards for vendors, there are no written procedures as required by the CFR. Cause and Effect: The Organization did not maintain written procedures as required by the CFR. Questioned Costs: This finding does not result in questioned costs. Recommendation: We recommend that the Organization formally document the current policies and procedures in place to meet documentation requirements of the CFR. Views of Responsible Officials and Planned Corrective Actions: We will adopt formal policies and procedures that document our current practices and also meet the requirements of the CFR.
2024-004: Written Policies and Procedures – Significant Deficiency Criteria and Condition: 2 CFR 200.302 requires that the recipient or subrecipient’s financial management system must provide written procedures to implement the requirements of 2 CFR 200.305 (Federal payments) and for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. Additionally, 2 CFR 200.318 requires that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. Context: Although the Organization follows procedures that minimize the time between reimbursement of dollars and expenditure (2 CFR 200.305), verify payments made are in accordance with subpart E and terms and conditions of the award, and follow procurement standards for vendors, there are no written procedures as required by the CFR. Cause and Effect: The Organization did not maintain written procedures as required by the CFR. Questioned Costs: This finding does not result in questioned costs. Recommendation: We recommend that the Organization formally document the current policies and procedures in place to meet documentation requirements of the CFR. Views of Responsible Officials and Planned Corrective Actions: We will adopt formal policies and procedures that document our current practices and also meet the requirements of the CFR.
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. Additionally, Authority is required to submit annual SF-425 reports within 90 days of the end of the federal fiscal year. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there was one instance 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, 2024 no funds have been returned to U.S. DOT. It was also noted that multiple annual SF-425 reports were submitted late. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2024 and SF-425 reports for all open grants. 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 Yes. Prior audit finding 2023-003. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
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. Additionally, Authority is required to submit annual SF-425 reports within 90 days of the end of the federal fiscal year. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there was one instance 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, 2024 no funds have been returned to U.S. DOT. It was also noted that multiple annual SF-425 reports were submitted late. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2024 and SF-425 reports for all open grants. 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 Yes. Prior audit finding 2023-003. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
2024-002 Twenty-First Century Community Learning Centers – Assistance Listing No. 84.287 Significant Deficiency in Internal Control Over Compliance and Noncompliance – Appropriate Review of Expenditures Claimed B. Allowable Costs/Cost Principles and C. Cash Management Criteria: In accordance with 2 CFR § 200.403(e), expenses must be determined under generally accepted accounting principles (GAAP) to be considered allowable unless otherwise noted in 2 CFR 200. In accordance with 2 CFR § 200.305(b), the draws under reimbursable grants must be limited to the minimum amount needed and drawn down after expenses have incurred. Condition and Context: During our testing of expenses charged to the federal program, we identified one transaction which the Organization prepaid for services to be rendered in 2025. The prepaid expense were charged to the SEFA in 2024 which does not match when they should be recognized as expenses under GAAP. The expenses were claimed for reimbursement prior to being incurred based on GAAP. Total questioned costs for this instance were $8,750. The population was considered the month of December as these were went the prepayments were made. The error rate for the defined population was 93.85% resulting in likely questioned costs of $14,393. Our sample was not statistically valid. Cause and Effect: The issue appears to have resulted from a lack of adequate review procedures to ensure that expenses charged to the federal award align with recognition under GAAP. As a result, the entity claimed expenditures which may be unallowable. Claimed expenditures which may be unallowable and drawn prior to being incurred. Recommendation: We recommend that management strengthen its review procedures over expense cutoff to ensure that expenditures are recognized on the SEFA in alignment with GAAP and are drawn down appropriately under the cost reimbursement method. Additionally, training should be provided to accounting personnel on Uniform Guidance compliance and GAAP requirements related to expense recognition. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and plan to have the corrective action implemented by August 2025.
2024-005 - Lack of Written Federal Policies and Procedures Required by Uniform Guidance Finding Type: Material weakness in internal control over compliance Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Allowable Costs/Cost Principles, Procurement and Suspension and Debarment Condition/Finding: The Village has not developed or implemented the written policies and procedures required under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Required documentation is absent in areas such as internal controls over compliance, cash management, procurement, and allowable costs. Criteria: Per 2 CFR §200.303 and related sections (including §§200.305 and 200.318–320), non-federal entities expending federal awards must establish and maintain effective internal controls and must document policies and procedures governing compliance with applicable federal statutes, regulations, and terms of award. Cause: The Village has not formally developed Uniform Guidance-compliant policies due to limited administrative resources and competing operational priorities. Effect: The absence of formal written policies and procedures increases the risk of inconsistent or noncompliant treatment of federal expenditures. Without documented controls and expectations, the Village may fail to detect or prevent noncompliance with federal requirements in key grant administration areas. Recommendation: We recommend that the Village adopt written policies and procedures addressing the specific requirements outlined in the Uniform Guidance. These policies should include, but not be limited to, internal controls over compliance, procurement, cash management, subrecipient monitoring (if applicable), and allowable cost determinations. Management should ensure that these policies are communicated and periodically reviewed. View of Responsible Officials: Management’s response and planned corrective action can be found in the accompanying Corrective Action Plan.
Criteria: According to 2 CFR §200.305(b), when a non-federal entity receives advance payments of federal funds, it must deposit those funds in interest-bearing accounts, unless certain exceptions apply, and must remit any interest earned on advances in excess of $500 per year to the federal agency. Furthermore, advance payments should be segregated to ensure proper tracking and safeguarding of federal funds. Condition: During our audit of the Organization’s federal awards, we identified deficiencies in the grantee’s cash management procedures related to advance payments received from federal awarding agencies. Specifically, the grantee did not segregate advance payments into separate insured interestbearing accounts as required by the Uniform Guidance. Cause: The Organization did not have adequate policies and procedures or internal controls in place to ensure compliance with the cash management requirements related to advance payments. Effect: The federal awarding agency did not receive interest that could have been earned on the advances. All advances received during 2024 were expended by December 31, 2024. There was no loss from uninsured funds or from lack of segregating funds into separate accounts. Recommendation: We recommend that the Organization implement policies and procedures to ensure that all advance payments are deposited into separate, insured, interest-bearing accounts as required. The Organization should also establish controls to track interest earned on these accounts and remit amounts due to the federal awarding agencies in a timely manner. Training should be provided to staff responsible for cash management to ensure ongoing compliance with federal requirements. Views of Responsible Officials: Management agrees with the finding and procedures have been implemented to address the related issues.
Criteria: According to 2 CFR §200.305(b), when a non-federal entity receives advance payments of federal funds, it must deposit those funds in interest-bearing accounts, unless certain exceptions apply, and must remit any interest earned on advances in excess of $500 per year to the federal agency. Furthermore, advance payments should be segregated to ensure proper tracking and safeguarding of federal funds. Condition: During our audit of the Organization’s federal awards, we identified deficiencies in the grantee’s cash management procedures related to advance payments received from federal awarding agencies. Specifically, the grantee did not segregate advance payments into separate insured interestbearing accounts as required by the Uniform Guidance. Cause: The Organization did not have adequate policies and procedures or internal controls in place to ensure compliance with the cash management requirements related to advance payments. Effect: The federal awarding agency did not receive interest that could have been earned on the advances. All advances received during 2024 were expended by December 31, 2024. There was no loss from uninsured funds or from lack of segregating funds into separate accounts. Recommendation: We recommend that the Organization implement policies and procedures to ensure that all advance payments are deposited into separate, insured, interest-bearing accounts as required. The Organization should also establish controls to track interest earned on these accounts and remit amounts due to the federal awarding agencies in a timely manner. Training should be provided to staff responsible for cash management to ensure ongoing compliance with federal requirements. Views of Responsible Officials: Management agrees with the finding and procedures have been implemented to address the related issues.
2024-004: Written Policies and Procedures – Significant Deficiency Criteria and Condition: 2 CFR 200.302 requires that the recipient or subrecipient’s financial management system must provide written procedures to implement the requirements of 2 CFR 200.305 (Federal payments) and for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. Additionally, 2 CFR 200.318 requires that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. Context: Although the Organization follows procedures that minimize the time between reimbursement of dollars and expenditure (2 CFR 200.305), verify payments made are in accordance with subpart E and terms and conditions of the award, and follow procurement standards for vendors, there are no written procedures as required by the CFR. Cause and Effect: The Organization did not maintain written procedures as required by the CFR. Questioned Costs: This finding does not result in questioned costs. Recommendation: We recommend that the Organization formally document the current policies and procedures in place to meet documentation requirements of the CFR. Views of Responsible Officials and Planned Corrective Actions: We will adopt formal policies and procedures that document our current practices and also meet the requirements of the CFR.
2024-004: Written Policies and Procedures – Significant Deficiency Criteria and Condition: 2 CFR 200.302 requires that the recipient or subrecipient’s financial management system must provide written procedures to implement the requirements of 2 CFR 200.305 (Federal payments) and for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. Additionally, 2 CFR 200.318 requires that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. Context: Although the Organization follows procedures that minimize the time between reimbursement of dollars and expenditure (2 CFR 200.305), verify payments made are in accordance with subpart E and terms and conditions of the award, and follow procurement standards for vendors, there are no written procedures as required by the CFR. Cause and Effect: The Organization did not maintain written procedures as required by the CFR. Questioned Costs: This finding does not result in questioned costs. Recommendation: We recommend that the Organization formally document the current policies and procedures in place to meet documentation requirements of the CFR. Views of Responsible Officials and Planned Corrective Actions: We will adopt formal policies and procedures that document our current practices and also meet the requirements of the CFR.
2 CFR § 300 codified in 45 CFR part 75 and gives regulatory effect to the Department of Health and Human Services 2 CFR § 200; while 2 CFR § 400 gives regulatory effect to the Department of Agriculture for 2 CFR § 200. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 for Payment. 2 CFR 200.302(b)(7) requires 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. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B). The Board of Health did not have written policies as required by the Uniform Guidance as they were not aware of the requirements. The failure to implement written policies as required by the Uniform Guidance could result in noncompliance with the District’s federal programs. The Board of Health should adopt written policies in accordance with the Uniform Guidance to help improve internal controls over federal compliance.
2 CFR § 300 codified in 45 CFR part 75 and gives regulatory effect to the Department of Health and Human Services 2 CFR § 200; while 2 CFR § 400 gives regulatory effect to the Department of Agriculture for 2 CFR § 200. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 for Payment. 2 CFR 200.302(b)(7) requires 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. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B). The Board of Health did not have written policies as required by the Uniform Guidance as they were not aware of the requirements. The failure to implement written policies as required by the Uniform Guidance could result in noncompliance with the District’s federal programs. The Board of Health should adopt written policies in accordance with the Uniform Guidance to help improve internal controls over federal compliance.
2 CFR § 300 codified in 45 CFR part 75 and gives regulatory effect to the Department of Health and Human Services 2 CFR § 200; while 2 CFR § 400 gives regulatory effect to the Department of Agriculture for 2 CFR § 200. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 for Payment. 2 CFR 200.302(b)(7) requires 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. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B). The Board of Health did not have written policies as required by the Uniform Guidance as they were not aware of the requirements. The failure to implement written policies as required by the Uniform Guidance could result in noncompliance with the District’s federal programs. The Board of Health should adopt written policies in accordance with the Uniform Guidance to help improve internal controls over federal compliance.
2 CFR § 300 codified in 45 CFR part 75 and gives regulatory effect to the Department of Health and Human Services 2 CFR § 200; while 2 CFR § 400 gives regulatory effect to the Department of Agriculture for 2 CFR § 200. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 for Payment. 2 CFR 200.302(b)(7) requires 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. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B). The Board of Health did not have written policies as required by the Uniform Guidance as they were not aware of the requirements. The failure to implement written policies as required by the Uniform Guidance could result in noncompliance with the District’s federal programs. The Board of Health should adopt written policies in accordance with the Uniform Guidance to help improve internal controls over federal compliance.