2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate. Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (1) identification of all federal awards received and expended (2) accurate, current, and complete disclosure of the financial results of each federal award or program (3) records that identify adequately the source and application of funds for federally-funded activities (4) effective control over, and accountability for, all funds, property, and other assets (5) comparison of expenditures with budget amounts for each Federal award (6) written procedures to implement the requirements of section 200.305 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award. Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures. Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures. Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA. Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
2023-002: Material Weakness: Preparation of Schedule of Expenditures of Federal Awards Criteria: The Code of Federal Regulations (CFR) section 200.510 (b) states that, the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee's financial statements and must include the total federal awards expended as determined in accordance with section 200.502- Financial Management and must include at minimum the following: (1) list of individual federal programs by federal agency (2) for federal awards received as a subrecipient, the name and number of the pass-through entity (3) federal awards expended for each individual federal program and the Assistance Listings Number (4) include the total amount provided to subrecipients from each Federal program. (5) include notes that describe significant accounting policies used in preparing the schedule, loan or loan guarantee programs, and whether the auditee elected to use the 10% de minimis cost rate. Financial management section 200.502 (a) states that the auditee’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. (b) The financial management system must provide for the following: (1) identification of all federal awards received and expended (2) accurate, current, and complete disclosure of the financial results of each federal award or program (3) records that identify adequately the source and application of funds for federally-funded activities (4) effective control over, and accountability for, all funds, property, and other assets (5) comparison of expenditures with budget amounts for each Federal award (6) written procedures to implement the requirements of section 200.305 (7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the federal award. Condition: During the audit of the December 31, 2023 Schedule of Expenditures of Federal Awards (SEFA) prepared by management, we noted that controls over the preparation of the SEFA were not properly designed, therefore did not include the required federal award information and did not report all 2023 federal awards and related expenditures. Cause: The Organization has not implemented policies or procedures, to the degree necessary, to ensure that the SEFA is reconciled at year-end and that the schedule includes all federal awards and related expenditures. Effect: Audit procedures identified additional federal award expenditures and adjustments were required to be made to the final SEFA. Recommendation: We recommend that management of the Organization implement policies, procedures, and internal controls to ensure that federal expenditures are tracked in a manner that reflects that federal funds have been used and reported in accordance with federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.
Assistance Listing, Federal Agency, and Program Name - 11.611, United States Department of Commerce (DOC), National Institute of Standards and Technology (NIST) Federal Award Identification Number and Year - 70NANB20H067 Finding Type - Significant deficiency Repeat Finding - No Criteria - Internal controls should be put in place to ensure grant duties are appropriately segregated between preparation and review processes. In addition, written procdures to implement cash management requirements should in place and updated in accordance with 2 CFR Part 200.305. Condition - The Organization did not have appropriate segregation of duties surrounding the preparation and review of the monthly NIST schedules which accumulate the information necessary to calculate allowable costs and matching for drawdown requests. Further, while the Organization had written procedures over cash management, they were outdated and did not reflect the current staffing model. Questioned Costs - Not applicable Context - One individual was responsible for the preparation of the monthly schedule described above and submission of the drawdown request. The cash management policy was not updated when there was restructuring in the finance department during fiscal year. Cause and Effect - Turnover within the finance department contibuted to the lack of segregation of duties and delay in updating the cash management policy. A lack of segregation of duties allows for the potential for errors and/or noncompliance to occur without detection. The outdated cash management policy was not reflective of the actual process. Recommendation - An individual independent of the preparation process should review and approve the information used to calculate allowable costs and matching prior to submitting the drawdown requests for cash management. Additionally, the cash management policy should be updated to reflect the new process. Views of Responsible Officials and Planned Corrective Actions - Subsequent to year end, the reorganized finance team put new controls and procedures in place. Moving forward the Accounting Supervisor will calculate the NIST MEP monthly program income which is used to determine the monthly award drawdown of cash from the available grant award funds. This is reviewed by the Controller and this report is used to create SF 425.
Federal Program: Assistance Listing #93.590 - Community-based Child Abuse Prevention Grant Program Assistance Listing #93.912 - Rural Communities Opioid Response Program Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Illuminate Colorado has established a policy to time Federal drawdown requests to ensure that Federal cash on hand is sufficient to be disbursed to third party vendors within 10 days of receipt. 2 out of 49 program disbursements to external vendors were made 79 to 90 days after receipt of funds for Community-based Child Abuse Prevention Grant program. 32 out of 46 program disbursements to external vendors were made 14 to 186 days after receipt of funds for Rural Communities Opioid Response program. Questioned Costs: None. Cause and Effect: Illuminate Colorado experienced cashflow issues during 2023 resulting in usage of program receipts for other programs. In addition, vendors utilized for direct Federal assistance programs were not identified and prioritized for federal drawdown receipts. As a result, Illuminate Colorado did not minimize the time elapsing between the drawdown and transfer of funds from the US Treasury and disbursement by the non-federal entity for direct program or project costs. Recommendation: Since Illuminate Colorado is a direct recipient of federal program funds, we recommend Illuminate Colorado identify and pay external vendors participating in this program within 10 days of receipt of program funds in accordance with its financial policies and procedures. In addition, non-program cash flow should be increased to allow enough working capital to disburse program funds to external vendors utilized for this program. Management’s Response: Illuminate Colorado has improved invoicing procedures to ensure timely submission of invoices across the board to minimize time elapsed between submission of invoices to funders and reimbursement of those invoices. In addition, Illuminate Colorado has been seeking increased working capital via a larger line of credit or other sources to address cash flow issues. Finally, Illuminate Colorado is in process of developing a Standard Operating Procedure to ensure consistent identification of vendors utilized for direct Federal assistance programs in order to prioritize payment of those vendors with federal drawdown receipts.
Federal Program: Assistance Listing #93.590 - Community-based Child Abuse Prevention Grant Program Assistance Listing #93.912 - Rural Communities Opioid Response Program Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Illuminate Colorado has established a policy to time Federal drawdown requests to ensure that Federal cash on hand is sufficient to be disbursed to third party vendors within 10 days of receipt. 2 out of 49 program disbursements to external vendors were made 79 to 90 days after receipt of funds for Community-based Child Abuse Prevention Grant program. 32 out of 46 program disbursements to external vendors were made 14 to 186 days after receipt of funds for Rural Communities Opioid Response program. Questioned Costs: None. Cause and Effect: Illuminate Colorado experienced cashflow issues during 2023 resulting in usage of program receipts for other programs. In addition, vendors utilized for direct Federal assistance programs were not identified and prioritized for federal drawdown receipts. As a result, Illuminate Colorado did not minimize the time elapsing between the drawdown and transfer of funds from the US Treasury and disbursement by the non-federal entity for direct program or project costs. Recommendation: Since Illuminate Colorado is a direct recipient of federal program funds, we recommend Illuminate Colorado identify and pay external vendors participating in this program within 10 days of receipt of program funds in accordance with its financial policies and procedures. In addition, non-program cash flow should be increased to allow enough working capital to disburse program funds to external vendors utilized for this program. Management’s Response: Illuminate Colorado has improved invoicing procedures to ensure timely submission of invoices across the board to minimize time elapsed between submission of invoices to funders and reimbursement of those invoices. In addition, Illuminate Colorado has been seeking increased working capital via a larger line of credit or other sources to address cash flow issues. Finally, Illuminate Colorado is in process of developing a Standard Operating Procedure to ensure consistent identification of vendors utilized for direct Federal assistance programs in order to prioritize payment of those vendors with federal drawdown receipts.
Finding 2023-001; Lack of Written Policies and Procedures Condition: The Organization does not have written policies and procedures in place for the administration and management of federal awards, as required by the Uniform Guidance (2 CFR Part 200). Specifically, the organization lacks documented procedures for financial management, internal controls, allowable costs, procurement, and other key operational areas. Criteria: According to 2 CFR § 200.302(b)(7), non-federal entities must have written procedures to implement the requirements of § 200.305 (Payment) and must maintain written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the federal award. Additionally, 2 CFR § 200.303 requires non-federal entities to establish and maintain effective internal controls, including written policies and procedures, to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: The absence of written policies and procedures appears to be due to a lack of awareness of the specific requirements under the Uniform Guidance, coupled with insufficient resources allocated to the development of these necessary internal controls. Effect: Without written policies and procedures, the Organization is at risk of non-compliance with federal regulations, which could lead to unallowable costs being charged to federal awards, inefficient or improper use of federal funds, and potential disallowance of costs during audits. This deficiency could also reduce the Organization's ability to ensure consistency and accountability in the management of federal funds. Recommendation: The Organization should develop and implement comprehensive written policies and procedures in accordance with the requirements of the Uniform Guidance. These should include, but not be limited to, the following areas: 1. Financial management, including procedures for payments and cash management. 2. Internal controls to ensure compliance with federal requirements. 3. Determination of allowable costs in accordance with federal regulations and the terms and conditions of the award. 4. Time and effort reporting and compensation. The Organization should also ensure that staff are adequately trained in these policies and procedures to enhance compliance and operational efficiency. Views of Responsible Officials of Auditee: In response to the finding, management will take action to develop and implement the necessary written policies and procedures by June 30, 2025. Comprehensive training will be provided to all relevant staff to ensure compliance with federal requirements.
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the twenty-one (21) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the twenty-one (21) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the twenty-one (21) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Finding No. 2023–001 - CASH MANAGEMENT Name of Federal Agency U.S. Department of Education Pass-through the Puerto Rico Department of Education Federal Programs Charter Schools Assistance Listing Numbers 84.282 Category Significant Deficiency Compliance / Internal control Compliance Requirements Cash Management Criteria According to the 2 CFR 200.305(b) For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the passthrough entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. According to the 2 CFR 200.305(b) (2)The recipient or subrecipient must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient or subrecipient, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. The recipient or subrecipient must make timely payments to contractors in accordance with the contract provisions. Condition During our audit procedures, we found the following instances on which the Institution did not disbursed funds in an expedite matter: Fund Sample Selected Instances Average of Days Late 84.282 11 Two (2) 10 to 15 days Cause The delay in disbursements responds to several situations: remote work, lack of banking or information from suppliers, multiplicity of tasks under the responsibility of the CFO, which affected the dates of sending the payments. Effect As a result of this condition, the U.S. Department of Education and /or Puerto Rico Department of Education may issue warnings and/or impose penalties to the Institution.-34- Questioned Cost None Recommendation The management of the Institution should reinforce its cash management procedures and internal controls to ensure the disbursement of funds in the required time frame. Views of Responsible Officials of the Auditee The management of the Institution agrees with this finding. Responsible Person Yusein Duarakov Business Administration
Finding 2023-003: Cash Management Federal Department: U.S. Department of Education Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education Federal Program Name: Twenty-First Century Community Learning Centers Assistance Listing Number: 84.287 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.303, Internal controls states “The non-Federal” entity must: (1) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request. Condition/Context During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements. Exceptions were noted in five of five tested reimbursement requests: For all five requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission. For all five requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system-generated expenditures reports, instead of actual invoices, payroll registers, and payment support. Cause Based on our discussions with management, this finding occurred due to staff turnover. As a result, consistent documentation was not maintained to trace the reimbursement submissions to pass-through entities. Effect The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements. Questioned Costs Unable to determine. Identification of Repeat Findings Repeated (Prior Finding No. 2022-002). Recommendation We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations. Views of Responsible Officials and Corrective Action Plan CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 18-20.
Finding 2023-003: Cash Management Federal Department: U.S. Department of Education Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education Federal Program Name: Twenty-First Century Community Learning Centers Assistance Listing Number: 84.287 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.303, Internal controls states “The non-Federal” entity must: (1) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request. Condition/Context During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements. Exceptions were noted in five of five tested reimbursement requests: For all five requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission. For all five requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system-generated expenditures reports, instead of actual invoices, payroll registers, and payment support. Cause Based on our discussions with management, this finding occurred due to staff turnover. As a result, consistent documentation was not maintained to trace the reimbursement submissions to pass-through entities. Effect The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements. Questioned Costs Unable to determine. Identification of Repeat Findings Repeated (Prior Finding No. 2022-002). Recommendation We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations. Views of Responsible Officials and Corrective Action Plan CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 18-20.
Finding 2023-003: Cash Management Federal Department: U.S. Department of Education Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education Federal Program Name: Twenty-First Century Community Learning Centers Assistance Listing Number: 84.287 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.303, Internal controls states “The non-Federal” entity must: (1) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request. Condition/Context During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements. Exceptions were noted in five of five tested reimbursement requests: For all five requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission. For all five requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system-generated expenditures reports, instead of actual invoices, payroll registers, and payment support. Cause Based on our discussions with management, this finding occurred due to staff turnover. As a result, consistent documentation was not maintained to trace the reimbursement submissions to pass-through entities. Effect The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements. Questioned Costs Unable to determine. Identification of Repeat Findings Repeated (Prior Finding No. 2022-002). Recommendation We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations. Views of Responsible Officials and Corrective Action Plan CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 18-20.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.305 (b1) states “Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs.” Additionally, as noted in the terms of the grant agreements, “requests for payment must be submitted on Standard Form 270 (SF-270) Request for Advance or Reimbursement, and must be submitted no more than monthly.” Condition We noted several instances throughout the audit where management had drawn advances on federal awards which exceeded actual federal award expenditures in the same period. Also, while the Organization did submit requests for funds using the SF-270, each SF-270 was submitted as requesting reimbursement, when several were actually requesting advances. Cause of Condition The Organization’s internal controls are not properly designed to be in line with Federal guidelines, particularly, CFR 200.305. Additionally, the Organization lacked proper internal controls to review and approve each SF-270. Repeat Finding No. Effect of Condition The Organization was not in compliance with cash management compliance requirements as stated in 2 CFR 200.305. Recommendation We recommend management implement processes and procedures to adhere to Federal guidelines and only draw funds immediately needed. We also recommend management implement processes and procedures to review each SF-270 form and verify whether the request is an advancement or reimbursement request. We recommend management document the expenditures associated with each reimbursement request, when applicable.
U.S. Department of Health and Human Services 2023-003 Cash Management/Reporting Program(s) Name of Federal Program (Assistance Listing Number) Urban Indian Health Services (93.193) Special Diabetes Program for Indians - Diabetes Prevention and Treatment Projects (93.237) Criteria - Recipients of federal awards must minimize the time elapsing between the receipt of funds from the U.S. Treasury and disbursement by the Organization set out at 2 CFR section 200.305(b). Context and Condition - We compared four quarterly Federal Cash Transaction Reports and three monthly reimbursement requests to total disbursements reported by these two programs in the Organization’s job-costing system. In both reports we found that the amounts requested did not match the amounts in the job-costing system. Cause - Due to increased funding the Organization received to address the impact of COVID-19, disbursements were not always correctly assigned to a program when incurred. Requests for federal funds were made based on those incomplete reports that were changed subsequently and no longer represent the amounts requested. The original reports were not maintained to support the requests made. Effect - A federal program could disburse funds prior to the disbursement by the Organization. We identified that both programs had requested funds in excess of disbursements. Questioned Costs - No costs were questioned. Repeat finding - Yes Statistically valid - Yes Recommendation - We recommend the Organization 1) maintains timely and accurate recording of disbursements in its job-costing system and 2) regularly request grant funds based on amounts expended as report in the Organization’s job-costing system. Views of responsible officials - The Organization is implementing a grant tracking system in addition to its job-costing system to better comply with these requirements. Together, these systems will be used to request only the amount attributable to the program for reimbursement.
U.S. Department of Health and Human Services 2023-003 Cash Management/Reporting Program(s) Name of Federal Program (Assistance Listing Number) Urban Indian Health Services (93.193) Special Diabetes Program for Indians - Diabetes Prevention and Treatment Projects (93.237) Criteria - Recipients of federal awards must minimize the time elapsing between the receipt of funds from the U.S. Treasury and disbursement by the Organization set out at 2 CFR section 200.305(b). Context and Condition - We compared four quarterly Federal Cash Transaction Reports and three monthly reimbursement requests to total disbursements reported by these two programs in the Organization’s job-costing system. In both reports we found that the amounts requested did not match the amounts in the job-costing system. Cause - Due to increased funding the Organization received to address the impact of COVID-19, disbursements were not always correctly assigned to a program when incurred. Requests for federal funds were made based on those incomplete reports that were changed subsequently and no longer represent the amounts requested. The original reports were not maintained to support the requests made. Effect - A federal program could disburse funds prior to the disbursement by the Organization. We identified that both programs had requested funds in excess of disbursements. Questioned Costs - No costs were questioned. Repeat finding - Yes Statistically valid - Yes Recommendation - We recommend the Organization 1) maintains timely and accurate recording of disbursements in its job-costing system and 2) regularly request grant funds based on amounts expended as report in the Organization’s job-costing system. Views of responsible officials - The Organization is implementing a grant tracking system in addition to its job-costing system to better comply with these requirements. Together, these systems will be used to request only the amount attributable to the program for reimbursement.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
Material Weakness in Cash Management Controls Federal Agency and Pass-through Entity: U.S. Environmental Protection Agency – Georgia Environmental Finance Authority Program Title/Cluster: Clean Water State Revolving Fund Cluster (CWSRF) Criteria: In accordance with 2 CFR §200.305(b), when advance payments are made, the non-federal entity must maintain written procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury (or pass-through entity) and disbursement. Effective internal control over compliance with the cash management requirement includes documented procedures to ensure federal funds are drawn down only when needed and promptly disbursed. Per 2 CFR §200.303, the non-federal entity must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our testing of compliance with cash management requirements for the CWSRF program, we inquired about the City’s procedures to minimize the time elapsed between draw requests, deposit of funds, and disbursement to contractors. We noted that the City did not have formal or documented internal controls in place specifically related to this process. No control activities were identified to monitor or ensure timely disbursement following drawdowns. Effect: The absence of identifiable internal controls over cash management increases the risk of noncompliance with federal requirements, including the potential for drawing federal funds in advance of immediate cash needs. While our audit testing did not identify any instances of noncompliance (contractor payments were made within a reasonable timeframe) this control deficiency represents a material weakness in internal control over compliance. Questioned Costs: None reported. Recommendation: We recommend that the City develop and implement formal, documented procedures and internal controls to ensure that federal funds are drawn only when needed and disbursed in a timely manner in accordance with federal cash management requirements. This should include documented monitoring of the timing of drawdowns and corresponding disbursements. Status: New finding in the current year.
Finding 2023-006 Lack of Internal Control over Cash Management Federal Agency: U.S. Department of the Interior and U.S. Department of the Treasury Federal Program: Aid to Tribal Governments (ATG); Consolidated Tribal Government (CTG); and Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), respectively ALN: 15.020 (ATG); 15.021 (CTG); and 21.027 (CSLFRF), respectively Award Numbers: A19AV00203 (ATG); A19AV00203 and A22AV00218 (CTG); and SLFRP4178/4850 (CSLFRF), respectively Award Year: 2021 (ATG); 2021 and 2022 (CTG); and 2021 (CSLFRF), respectively Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: The requirement for cash management as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that grant funds drawn down were used for grant expenditures in the applicable program. We compared the unearned revenue balances of the grant funds with the available cash balances at year end. The Village’s cash balances for all governmental funds amounted to $7,546,844 at December 31, 2023. The unearned revenues were $8,138,199 which resulted in a shortfall of $591,355. The ATG and CTG programs had unearned revenue balances of $552,928, and the CSLFRF program had an unearned revenue balance of $6,624,359 as of December 31, 2023. Cause: Lack of internal control over cash management. Effect: The Village requested and received advances for various federal programs to cover expenditures. Cash advances were used to fund other unrelated programs of the Village. Questioned Costs: $591,355, which is the shortfall between cash and cash equivalents and the unearned revenue balances. Repeat Finding: This is a repeat of Finding 2022-003, and since it is a repeat finding we believe this to be a systemic issue. Recommendation: We recommend that the Village monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs to ensure that unearned revenue balances do not exceed total cash and cash equivalents. Management’s Response: Management concurs with this finding. See corrective action plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering & Office of International Science and Engineering AL No.: 47.050, 47.070 & 47.079 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019 -05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), OAC-1931278 (10/1/2019 – 09/30/2023), EAR- 2244446 (03/01/2023 – 02/28/2026), OAC-2209833 (01/01/2023 – 12/31/2026), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2024), OAC-2103780 (10/01/2021 – 09/30/2026), OAC-2118329 (10/01/2021 – 09/30/2026) & OISE-1855654 (05/15/2019 – 12/31/2023) Pass Through Entity: None MW2023-004 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Material Weakness Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2023, CUAHSI had advance drawdowns totaling $4,930,416 from the NSF. Of this amount, CUAHSI incurred $4,463,802 in eligible expenses for the year ended December 31, 2023. This resulted in $466,614 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2023 are reported as part of the advances payable liability in the accompanying Statement of Financial Position. Cause & Context CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement. Effect Drawing down funds in advance of incurring eligible expenses may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2022-007. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Finding 2023-007 – Payroll and Cash Management Deficiencies Agency: U.S. Department of Health and Human Services – Administration for Children and Families Federal program: Child Care and Development Block Grant (CCDBG) ALN: 93.575 Compliance requirement: Cash Management (2 CFR 200.305) Category: Material Weakness Questioned costs: None Repeat finding: No Condition: When federal cash balances were insufficient, payroll was temporarily paid from private funds. Upon receipt of federal reimbursements, Semillitas de Amor issued payroll checks from the federal account to the same employees, instructing them to return such funds to the private account. Some employees did not return the full amounts, resulting in receivables from employees in the private fund. No formal interfund entries or tracking logs were maintained. Criteria: 2 CFR 200.305 requires federal funds to be managed to minimize the time between drawdowns and disbursements, with adequate controls to ensure funds are used only for allowable costs and properly transferred. Cause: Management lacked adequate cash management controls and relied on informal repayments by employees. Effect: While no questioned costs were identified since payroll was allowable, the process distorted financial records and represents material weakness and noncompliance with cash management requirements. Importantly, the receivables that resulted from incomplete repayments were recorded entirely in the private (non-federal) fund. No amounts were misstated in the federal fund, and no federal expenditures, obligations, reimbursements, or SEFA amounts were affected. Because the underlying payroll costs were allowable, allocable, and properly chargeable to the federal program under 2 CFR 200 Subpart E, this condition did not result in questioned costs. The financial distortion and control impact were limited exclusively to the private fund. Recommendation: We recommend that management discontinue the practice of issuing duplicate payroll checks to employees. When federal cash is not available at the time payroll must be processed, management should transfer the exact amount of funds needed from the private account to the federal account prior to payroll. Payroll should then be processed directly from the federal account. Once the federal reimbursement is received, the private account should be reimbursed through a documented interfund transfer, supported by reconciliations and approved by management. This procedure ensures that employees are paid only once, that payroll is always disbursed from the correct account, and that interfund transactions are transparent and properly documented. Management should also establish written procedures for this process and maintain a detailed interfund log with dates, amounts, and approvals.
Criteria or Specific Requirement – Cash Management (2 CFR 200.305 (b)) Condition – The Organization drew down funds and determined later on these were not allowable expenditures. A subsequent draw down was reduced by the same amount during the audit period. Questioned Costs – None. Context – Out of a population of ten cash draws, a sample of two draws were selected for testing. The sampling methodology used is not and is not intended to be statistically valid. Of the two draws tested, one draw included a request for invoices which were determined later to not be allowable expenses, and a subsequent draw was reduced to offset the difference. Effect – The System's cash management system is not operating within the requirements determined by Department of Education (DOE). Cause – Management of the Organization does not have sufficient controls in place to ensure funds drawn in advance are allowable expenditures. Identification as a Repeat Finding – Not applicable. Recommendation - Management should review cash management processes and establish appropriate controls to ensure funds drawn are for allowable expenditures. Views of Responsible Officials and Planned Corrective Actions – We have since developed an organization policy for cash management for federally sponsored grant programs. SEH has provided and will continue to provide staff education on this policy in the future.
Criteria or Specific Requirement – Cash Management (2 CFR 200.305 (b)) Condition – The Organization drew down funds and determined later on these were not allowable expenditures. A subsequent draw down was reduced by the same amount during the audit period. Questioned Costs – None. Context – Out of a population of ten cash draws, a sample of two draws were selected for testing. The sampling methodology used is not and is not intended to be statistically valid. Of the two draws tested, one draw included a request for invoices which were determined later to not be allowable expenses, and a subsequent draw was reduced to offset the difference. Effect – The System's cash management system is not operating within the requirements determined by Department of Education (DOE). Cause – Management of the Organization does not have sufficient controls in place to ensure funds drawn in advance are allowable expenditures. Identification as a Repeat Finding – Not applicable. Recommendation - Management should review cash management processes and establish appropriate controls to ensure funds drawn are for allowable expenditures. Views of Responsible Officials and Planned Corrective Actions – We have since developed an organization policy for cash management for federally sponsored grant programs. SEH has provided and will continue to provide staff education on this policy in the future.
2023 – 006 Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2202ILLIEA 10/1/2021; G-2202ILLIEA 10/1/2021; G-2302ILLIEA 10/1/2022; 2102ILLWCS 5/28/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 22-221038; 22-224038; 23-224038; 21-233038 Award Period: June 1, 2022 through September 30, 2023, October 1, 2021 through June 30, 2023, October 1, 2022 through June 30, 2024, and September 1, 2021 through August 31, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.305(b)) requires non-federal entities to minimize the time between drawing and disbursing of federal funds. Effective internal controls should include ensuring the reimbursement request are supported by documentation of expenditures that been incurred. Additionally, the time between receiving and disbursing federal funds should be minimized and interest should be calculated on amounts of unearned revenue. Condition: Supporting documentation for the cash drawdown requests were not maintained. There were instances in which the accounting records did not agree to the grant reimbursement request. The time between receiving and disbursing federal funds was not minimized and interest on unearned revenue was not calculated. Documentation of review and approval of the reimbursement request by an individual other than the preparer was not retained. Questioned costs: $1,237,948 Context: 8 of 8 cash reimbursement requests tested did not have supporting documentation of the exact amount received maintained. Cause: Support for the reimbursement request could not be provided over the individual cash request as it was not retained. Adjustments made to the project accounting records after the cash reimbursement request were made caused the County to receive more funds than expenses incurred on specific grants. Effect: Lack of proper documentation for reported information can lead to an over or under reimbursement of grant funds. Repeat Finding: This is a repeat finding. Prior year finding number was 2022-006. Recommendation: We recommend the County design controls to ensure the accounting records reconcile to the reimbursement request and documentation be retained. Reconciliations should be reviewed and approved by an individual other than the preparer at the time of the request and this documentation should be retained. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 006 Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2202ILLIEA 10/1/2021; G-2202ILLIEA 10/1/2021; G-2302ILLIEA 10/1/2022; 2102ILLWCS 5/28/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 22-221038; 22-224038; 23-224038; 21-233038 Award Period: June 1, 2022 through September 30, 2023, October 1, 2021 through June 30, 2023, October 1, 2022 through June 30, 2024, and September 1, 2021 through August 31, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.305(b)) requires non-federal entities to minimize the time between drawing and disbursing of federal funds. Effective internal controls should include ensuring the reimbursement request are supported by documentation of expenditures that been incurred. Additionally, the time between receiving and disbursing federal funds should be minimized and interest should be calculated on amounts of unearned revenue. Condition: Supporting documentation for the cash drawdown requests were not maintained. There were instances in which the accounting records did not agree to the grant reimbursement request. The time between receiving and disbursing federal funds was not minimized and interest on unearned revenue was not calculated. Documentation of review and approval of the reimbursement request by an individual other than the preparer was not retained. Questioned costs: $1,237,948 Context: 8 of 8 cash reimbursement requests tested did not have supporting documentation of the exact amount received maintained. Cause: Support for the reimbursement request could not be provided over the individual cash request as it was not retained. Adjustments made to the project accounting records after the cash reimbursement request were made caused the County to receive more funds than expenses incurred on specific grants. Effect: Lack of proper documentation for reported information can lead to an over or under reimbursement of grant funds. Repeat Finding: This is a repeat finding. Prior year finding number was 2022-006. Recommendation: We recommend the County design controls to ensure the accounting records reconcile to the reimbursement request and documentation be retained. Reconciliations should be reviewed and approved by an individual other than the preparer at the time of the request and this documentation should be retained. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 006 Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2202ILLIEA 10/1/2021; G-2202ILLIEA 10/1/2021; G-2302ILLIEA 10/1/2022; 2102ILLWCS 5/28/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 22-221038; 22-224038; 23-224038; 21-233038 Award Period: June 1, 2022 through September 30, 2023, October 1, 2021 through June 30, 2023, October 1, 2022 through June 30, 2024, and September 1, 2021 through August 31, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.305(b)) requires non-federal entities to minimize the time between drawing and disbursing of federal funds. Effective internal controls should include ensuring the reimbursement request are supported by documentation of expenditures that been incurred. Additionally, the time between receiving and disbursing federal funds should be minimized and interest should be calculated on amounts of unearned revenue. Condition: Supporting documentation for the cash drawdown requests were not maintained. There were instances in which the accounting records did not agree to the grant reimbursement request. The time between receiving and disbursing federal funds was not minimized and interest on unearned revenue was not calculated. Documentation of review and approval of the reimbursement request by an individual other than the preparer was not retained. Questioned costs: $1,237,948 Context: 8 of 8 cash reimbursement requests tested did not have supporting documentation of the exact amount received maintained. Cause: Support for the reimbursement request could not be provided over the individual cash request as it was not retained. Adjustments made to the project accounting records after the cash reimbursement request were made caused the County to receive more funds than expenses incurred on specific grants. Effect: Lack of proper documentation for reported information can lead to an over or under reimbursement of grant funds. Repeat Finding: This is a repeat finding. Prior year finding number was 2022-006. Recommendation: We recommend the County design controls to ensure the accounting records reconcile to the reimbursement request and documentation be retained. Reconciliations should be reviewed and approved by an individual other than the preparer at the time of the request and this documentation should be retained. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 006 Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2202ILLIEA 10/1/2021; G-2202ILLIEA 10/1/2021; G-2302ILLIEA 10/1/2022; 2102ILLWCS 5/28/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 22-221038; 22-224038; 23-224038; 21-233038 Award Period: June 1, 2022 through September 30, 2023, October 1, 2021 through June 30, 2023, October 1, 2022 through June 30, 2024, and September 1, 2021 through August 31, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.305(b)) requires non-federal entities to minimize the time between drawing and disbursing of federal funds. Effective internal controls should include ensuring the reimbursement request are supported by documentation of expenditures that been incurred. Additionally, the time between receiving and disbursing federal funds should be minimized and interest should be calculated on amounts of unearned revenue. Condition: Supporting documentation for the cash drawdown requests were not maintained. There were instances in which the accounting records did not agree to the grant reimbursement request. The time between receiving and disbursing federal funds was not minimized and interest on unearned revenue was not calculated. Documentation of review and approval of the reimbursement request by an individual other than the preparer was not retained. Questioned costs: $1,237,948 Context: 8 of 8 cash reimbursement requests tested did not have supporting documentation of the exact amount received maintained. Cause: Support for the reimbursement request could not be provided over the individual cash request as it was not retained. Adjustments made to the project accounting records after the cash reimbursement request were made caused the County to receive more funds than expenses incurred on specific grants. Effect: Lack of proper documentation for reported information can lead to an over or under reimbursement of grant funds. Repeat Finding: This is a repeat finding. Prior year finding number was 2022-006. Recommendation: We recommend the County design controls to ensure the accounting records reconcile to the reimbursement request and documentation be retained. Reconciliations should be reviewed and approved by an individual other than the preparer at the time of the request and this documentation should be retained. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 006 Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2202ILLIEA 10/1/2021; G-2202ILLIEA 10/1/2021; G-2302ILLIEA 10/1/2022; 2102ILLWCS 5/28/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 22-221038; 22-224038; 23-224038; 21-233038 Award Period: June 1, 2022 through September 30, 2023, October 1, 2021 through June 30, 2023, October 1, 2022 through June 30, 2024, and September 1, 2021 through August 31, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.305(b)) requires non-federal entities to minimize the time between drawing and disbursing of federal funds. Effective internal controls should include ensuring the reimbursement request are supported by documentation of expenditures that been incurred. Additionally, the time between receiving and disbursing federal funds should be minimized and interest should be calculated on amounts of unearned revenue. Condition: Supporting documentation for the cash drawdown requests were not maintained. There were instances in which the accounting records did not agree to the grant reimbursement request. The time between receiving and disbursing federal funds was not minimized and interest on unearned revenue was not calculated. Documentation of review and approval of the reimbursement request by an individual other than the preparer was not retained. Questioned costs: $1,237,948 Context: 8 of 8 cash reimbursement requests tested did not have supporting documentation of the exact amount received maintained. Cause: Support for the reimbursement request could not be provided over the individual cash request as it was not retained. Adjustments made to the project accounting records after the cash reimbursement request were made caused the County to receive more funds than expenses incurred on specific grants. Effect: Lack of proper documentation for reported information can lead to an over or under reimbursement of grant funds. Repeat Finding: This is a repeat finding. Prior year finding number was 2022-006. Recommendation: We recommend the County design controls to ensure the accounting records reconcile to the reimbursement request and documentation be retained. Reconciliations should be reviewed and approved by an individual other than the preparer at the time of the request and this documentation should be retained. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 006 Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2202ILLIEA 10/1/2021; G-2202ILLIEA 10/1/2021; G-2302ILLIEA 10/1/2022; 2102ILLWCS 5/28/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 22-221038; 22-224038; 23-224038; 21-233038 Award Period: June 1, 2022 through September 30, 2023, October 1, 2021 through June 30, 2023, October 1, 2022 through June 30, 2024, and September 1, 2021 through August 31, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.305(b)) requires non-federal entities to minimize the time between drawing and disbursing of federal funds. Effective internal controls should include ensuring the reimbursement request are supported by documentation of expenditures that been incurred. Additionally, the time between receiving and disbursing federal funds should be minimized and interest should be calculated on amounts of unearned revenue. Condition: Supporting documentation for the cash drawdown requests were not maintained. There were instances in which the accounting records did not agree to the grant reimbursement request. The time between receiving and disbursing federal funds was not minimized and interest on unearned revenue was not calculated. Documentation of review and approval of the reimbursement request by an individual other than the preparer was not retained. Questioned costs: $1,237,948 Context: 8 of 8 cash reimbursement requests tested did not have supporting documentation of the exact amount received maintained. Cause: Support for the reimbursement request could not be provided over the individual cash request as it was not retained. Adjustments made to the project accounting records after the cash reimbursement request were made caused the County to receive more funds than expenses incurred on specific grants. Effect: Lack of proper documentation for reported information can lead to an over or under reimbursement of grant funds. Repeat Finding: This is a repeat finding. Prior year finding number was 2022-006. Recommendation: We recommend the County design controls to ensure the accounting records reconcile to the reimbursement request and documentation be retained. Reconciliations should be reviewed and approved by an individual other than the preparer at the time of the request and this documentation should be retained. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 006 Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2202ILLIEA 10/1/2021; G-2202ILLIEA 10/1/2021; G-2302ILLIEA 10/1/2022; 2102ILLWCS 5/28/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 22-221038; 22-224038; 23-224038; 21-233038 Award Period: June 1, 2022 through September 30, 2023, October 1, 2021 through June 30, 2023, October 1, 2022 through June 30, 2024, and September 1, 2021 through August 31, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.305(b)) requires non-federal entities to minimize the time between drawing and disbursing of federal funds. Effective internal controls should include ensuring the reimbursement request are supported by documentation of expenditures that been incurred. Additionally, the time between receiving and disbursing federal funds should be minimized and interest should be calculated on amounts of unearned revenue. Condition: Supporting documentation for the cash drawdown requests were not maintained. There were instances in which the accounting records did not agree to the grant reimbursement request. The time between receiving and disbursing federal funds was not minimized and interest on unearned revenue was not calculated. Documentation of review and approval of the reimbursement request by an individual other than the preparer was not retained. Questioned costs: $1,237,948 Context: 8 of 8 cash reimbursement requests tested did not have supporting documentation of the exact amount received maintained. Cause: Support for the reimbursement request could not be provided over the individual cash request as it was not retained. Adjustments made to the project accounting records after the cash reimbursement request were made caused the County to receive more funds than expenses incurred on specific grants. Effect: Lack of proper documentation for reported information can lead to an over or under reimbursement of grant funds. Repeat Finding: This is a repeat finding. Prior year finding number was 2022-006. Recommendation: We recommend the County design controls to ensure the accounting records reconcile to the reimbursement request and documentation be retained. Reconciliations should be reviewed and approved by an individual other than the preparer at the time of the request and this documentation should be retained. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 006 Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2202ILLIEA 10/1/2021; G-2202ILLIEA 10/1/2021; G-2302ILLIEA 10/1/2022; 2102ILLWCS 5/28/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 22-221038; 22-224038; 23-224038; 21-233038 Award Period: June 1, 2022 through September 30, 2023, October 1, 2021 through June 30, 2023, October 1, 2022 through June 30, 2024, and September 1, 2021 through August 31, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.305(b)) requires non-federal entities to minimize the time between drawing and disbursing of federal funds. Effective internal controls should include ensuring the reimbursement request are supported by documentation of expenditures that been incurred. Additionally, the time between receiving and disbursing federal funds should be minimized and interest should be calculated on amounts of unearned revenue. Condition: Supporting documentation for the cash drawdown requests were not maintained. There were instances in which the accounting records did not agree to the grant reimbursement request. The time between receiving and disbursing federal funds was not minimized and interest on unearned revenue was not calculated. Documentation of review and approval of the reimbursement request by an individual other than the preparer was not retained. Questioned costs: $1,237,948 Context: 8 of 8 cash reimbursement requests tested did not have supporting documentation of the exact amount received maintained. Cause: Support for the reimbursement request could not be provided over the individual cash request as it was not retained. Adjustments made to the project accounting records after the cash reimbursement request were made caused the County to receive more funds than expenses incurred on specific grants. Effect: Lack of proper documentation for reported information can lead to an over or under reimbursement of grant funds. Repeat Finding: This is a repeat finding. Prior year finding number was 2022-006. Recommendation: We recommend the County design controls to ensure the accounting records reconcile to the reimbursement request and documentation be retained. Reconciliations should be reviewed and approved by an individual other than the preparer at the time of the request and this documentation should be retained. Views of responsible officials: There is no disagreement with the audit finding.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time. #2023-010 – Major Federal Award Finding – Period of Performance Nature of Finding: Compliance Finding Period of Performance and Material Weakness in Internal Controls over Compliance Criteria/Condition: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. The Organization did not have controls in place to verify that costs were being charged to the award in the correct period of performance. Questioned Costs: $20,790 Identification of How Questioned Costs Were Computed: A sample of 40 non-payroll expenditures totaling approximately $48,000 was selected from a population of approximately $552,000 of non-payroll expenditures. An amount of $1,817 combined from two invoices that were charged to the Crime Victim Assistance program was related to the year ending September 30, 2024 and was inappropriately charged to the grant during 2023. Questioned costs are estimated by projecting the error identified in the sample tested to the population of non-payroll expenditures of the Crime Victim Assistance program. Cause/Context: There are not proper controls in place to review invoices and assign them to the appropriate grant period. Two expenditures out of forty non-payroll related expenditures tested for the Crime Victim Assistance grant was for a contracted annual service that covered multiple performance periods but was billed in its entirety to the current fiscal year. Effect: An overstatement of expenditures for the Crime Victim Assistance grant was reported in the current year. Recommendation: We recommend procedures are established to review for proper grant period when recording transactions and creating monthly reimbursement requests. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures. 1. The Staff Accountant will review the period each expenditure is related to and record the invoice to the appropriate period when entering it into accounts payable. The month and year will be noted on the invoice. 2. The CFO will review the month and year noted by the Staff Accountant prior to entry into accounts payable.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time. #2023-010 – Major Federal Award Finding – Period of Performance Nature of Finding: Compliance Finding Period of Performance and Material Weakness in Internal Controls over Compliance Criteria/Condition: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. The Organization did not have controls in place to verify that costs were being charged to the award in the correct period of performance. Questioned Costs: $20,790 Identification of How Questioned Costs Were Computed: A sample of 40 non-payroll expenditures totaling approximately $48,000 was selected from a population of approximately $552,000 of non-payroll expenditures. An amount of $1,817 combined from two invoices that were charged to the Crime Victim Assistance program was related to the year ending September 30, 2024 and was inappropriately charged to the grant during 2023. Questioned costs are estimated by projecting the error identified in the sample tested to the population of non-payroll expenditures of the Crime Victim Assistance program. Cause/Context: There are not proper controls in place to review invoices and assign them to the appropriate grant period. Two expenditures out of forty non-payroll related expenditures tested for the Crime Victim Assistance grant was for a contracted annual service that covered multiple performance periods but was billed in its entirety to the current fiscal year. Effect: An overstatement of expenditures for the Crime Victim Assistance grant was reported in the current year. Recommendation: We recommend procedures are established to review for proper grant period when recording transactions and creating monthly reimbursement requests. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures. 1. The Staff Accountant will review the period each expenditure is related to and record the invoice to the appropriate period when entering it into accounts payable. The month and year will be noted on the invoice. 2. The CFO will review the month and year noted by the Staff Accountant prior to entry into accounts payable.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time. #2023-010 – Major Federal Award Finding – Period of Performance Nature of Finding: Compliance Finding Period of Performance and Material Weakness in Internal Controls over Compliance Criteria/Condition: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. The Organization did not have controls in place to verify that costs were being charged to the award in the correct period of performance. Questioned Costs: $20,790 Identification of How Questioned Costs Were Computed: A sample of 40 non-payroll expenditures totaling approximately $48,000 was selected from a population of approximately $552,000 of non-payroll expenditures. An amount of $1,817 combined from two invoices that were charged to the Crime Victim Assistance program was related to the year ending September 30, 2024 and was inappropriately charged to the grant during 2023. Questioned costs are estimated by projecting the error identified in the sample tested to the population of non-payroll expenditures of the Crime Victim Assistance program. Cause/Context: There are not proper controls in place to review invoices and assign them to the appropriate grant period. Two expenditures out of forty non-payroll related expenditures tested for the Crime Victim Assistance grant was for a contracted annual service that covered multiple performance periods but was billed in its entirety to the current fiscal year. Effect: An overstatement of expenditures for the Crime Victim Assistance grant was reported in the current year. Recommendation: We recommend procedures are established to review for proper grant period when recording transactions and creating monthly reimbursement requests. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures. 1. The Staff Accountant will review the period each expenditure is related to and record the invoice to the appropriate period when entering it into accounts payable. The month and year will be noted on the invoice. 2. The CFO will review the month and year noted by the Staff Accountant prior to entry into accounts payable.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time. #2023-010 – Major Federal Award Finding – Period of Performance Nature of Finding: Compliance Finding Period of Performance and Material Weakness in Internal Controls over Compliance Criteria/Condition: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. The Organization did not have controls in place to verify that costs were being charged to the award in the correct period of performance. Questioned Costs: $20,790 Identification of How Questioned Costs Were Computed: A sample of 40 non-payroll expenditures totaling approximately $48,000 was selected from a population of approximately $552,000 of non-payroll expenditures. An amount of $1,817 combined from two invoices that were charged to the Crime Victim Assistance program was related to the year ending September 30, 2024 and was inappropriately charged to the grant during 2023. Questioned costs are estimated by projecting the error identified in the sample tested to the population of non-payroll expenditures of the Crime Victim Assistance program. Cause/Context: There are not proper controls in place to review invoices and assign them to the appropriate grant period. Two expenditures out of forty non-payroll related expenditures tested for the Crime Victim Assistance grant was for a contracted annual service that covered multiple performance periods but was billed in its entirety to the current fiscal year. Effect: An overstatement of expenditures for the Crime Victim Assistance grant was reported in the current year. Recommendation: We recommend procedures are established to review for proper grant period when recording transactions and creating monthly reimbursement requests. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures. 1. The Staff Accountant will review the period each expenditure is related to and record the invoice to the appropriate period when entering it into accounts payable. The month and year will be noted on the invoice. 2. The CFO will review the month and year noted by the Staff Accountant prior to entry into accounts payable.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time. #2023-010 – Major Federal Award Finding – Period of Performance Nature of Finding: Compliance Finding Period of Performance and Material Weakness in Internal Controls over Compliance Criteria/Condition: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. The Organization did not have controls in place to verify that costs were being charged to the award in the correct period of performance. Questioned Costs: $20,790 Identification of How Questioned Costs Were Computed: A sample of 40 non-payroll expenditures totaling approximately $48,000 was selected from a population of approximately $552,000 of non-payroll expenditures. An amount of $1,817 combined from two invoices that were charged to the Crime Victim Assistance program was related to the year ending September 30, 2024 and was inappropriately charged to the grant during 2023. Questioned costs are estimated by projecting the error identified in the sample tested to the population of non-payroll expenditures of the Crime Victim Assistance program. Cause/Context: There are not proper controls in place to review invoices and assign them to the appropriate grant period. Two expenditures out of forty non-payroll related expenditures tested for the Crime Victim Assistance grant was for a contracted annual service that covered multiple performance periods but was billed in its entirety to the current fiscal year. Effect: An overstatement of expenditures for the Crime Victim Assistance grant was reported in the current year. Recommendation: We recommend procedures are established to review for proper grant period when recording transactions and creating monthly reimbursement requests. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures. 1. The Staff Accountant will review the period each expenditure is related to and record the invoice to the appropriate period when entering it into accounts payable. The month and year will be noted on the invoice. 2. The CFO will review the month and year noted by the Staff Accountant prior to entry into accounts payable.
U.S. Department of Justice Crime Victim Assistance – Assistance #16.575 #2023-009 – Major Federal Award Finding – Cash Management Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $2,381 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper. Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization will implement the following changes in its accounting procedures: Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time.