FINDING 2023-004 – Cash Management: Significant Deficiency over Internal Controls over Compliance Assistance Listing Number Federal Agency/Pass-through Entity – Program Name Award Year Questioned Costs 64.033 VA Supportive Services for Veteran Families Program 2023 $0 Criteria: Regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Non-federal entities must establish written procedures to implement the requirements of 2 CFR section 200.305 ((2 CFR section 200.302(b)(6)). 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)). The reimbursement payment method is the preferred payment method if (a) the non-federal entity cannot the meet the requirements in 2 CFR section 200.305(b)(1) for advance payment, (b) the federal awarding agency sets a specific condition for use of the reimbursement or (c) if requested by the non-federal entity (2 CFR sections 200.305(b)(3) and 200.208). Condition/Context: The Organization draws down funds based on a profit and loss report to signify the excess expenses incurred over the grant revenue. The Organization operates on a reimbursement basis. The request for reimbursements are not reviewed to ensure amounts have been paid with the Organization’s funds prior to the reimbursement request because certain expense codes do not relate to expenses paid but rather expenses incurred. Additionally, the frequency of draws during mid-months creates potential for errors when the reporting period has not been reconciled and therefore coded expenses are subject to change. Effect: Certain expenses included on the draw down total have not been paid for with Organization funds prior to the request or within 3 days of receipt of federal fund. Cause: There is no review to ensure the total only included expenses paid. Repeat finding: This is not a repeat finding. Recommendation: The Organization should reconcile program expenditures and requests for federal funds to ensure the total draw down is not in excess of disbursements paid by the Organization. Management should implement a review and approval process for reimbursement requests to verify that amounts drawn are supported by paid expenditures and appropriate documentation. Views of responsible officials and planned corrective actions: Management agrees with the recommendation and has developed a corrective action plan to address the finding.
2 CFR § 300 codified in 45 CFR part 75 gives regulatory effect to the Department of Health and Human Services. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 Payment. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B) 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. The General Health District did not have written policies as required by Uniform Guidance. The failure to implement written policies as required by Uniform Guidance could result in noncompliance with the District’s federal programs. The General Health District should adopt written policies in accordance with the Uniform Guidance.
Finding 2022-04 – Noncompliance with Cash Management and Prompt Payment Requirements Program Number: 93.224, 93.225, 93.493, 93.527 Type of Finding: Internal Control, Compliance and Material Weakness Condition During our audit of cash management and disbursement practices, we noted that the organization maintains accounts payable balances that remain outstanding for several months after invoice dates, indicating that vendors are not being paid in a timely manner. These delays were observed across multiple transactions and were not isolated in nature. The aging of payables suggests that payments are not processed in accordance with established timelines, and there is no evidence of a formal process to monitor or enforce timely disbursement of obligations. In addition, management was unable to provide documentation demonstrating that payments related to federally funded expenditures were made promptly after costs were incurred and recorded. These conditions raise concerns that the organization is not complying with prompt payment requirements and may not be managing federal funds in accordance with cash management standards, particularly where funds are drawn down but not disbursed timely. Criteria Under 2 CFR 200.305 (Cash Management), non-federal entities must minimize the time elapsing between the drawdown of federal funds and disbursement of those funds. Additionally, federal regulations require compliance with applicable Prompt Payment Act requirements (31 U.S.C. 3901–3907), which mandate that vendors be paid in a timely manner to avoid unnecessary delays, penalties, or inefficiencies. Effective internal control also requires that obligations be paid when due, that liabilities be monitored, and that payment processes ensure compliance with both federal and contractual requirements. Cause These deficiencies appear to result from inadequate cash management practices, lack of monitoring of accounts payable aging, insufficient oversight of disbursement processes, and possible liquidity or operational constraints. Additionally, there is no evidence of formal policies or controls to ensure compliance with prompt payment requirements. Effect These conditions create significant risks, including: ▪ Noncompliance with federal cash management requirements ▪ Potential violation of Prompt Payment Act provisions CARESTL HEALTH SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 43 SECTION III – FEDERAL AWARD FINDINGS AND QUESTION COSTS (Continued) ▪ Increased risk that federal funds are not disbursed timely after drawdown ▪ Exposure to interest penalties or vendor disputes ▪ Inefficient use of federal resources and potential cash flow mismanagement ▪ Increased likelihood of audit findings, questioned costs, and regulatory scrutiny Questioned Costs Likely Questioned Costs: Undeterminable The failure to process payments timely and monitor accounts payable aging constitutes a material weakness in internal control over compliance and results in noncompliance with federal cash management requirements. Recommendation We recommend that management: ▪ Implement procedures to ensure timely payment of all obligations, particularly those related to federal programs ▪ Establish accounts payable aging monitoring and review processes, with escalation of overdue items ▪ Align disbursement practices with 2 CFR 200.305 to ensure funds are drawn and disbursed promptly ▪ Develop and enforce policies consistent with the Prompt Payment Act, including defined payment timelines ▪ Perform periodic reviews of cash flow and payment cycles to ensure compliance ▪ Assign oversight responsibility to ensure timely processing and documentation of payments Strengthening cash management practices will improve compliance with federal requirements and enhance overall financial control. Management Response Management acknowledges the auditor’s observations regarding delayed vendor payments and agrees that improvements in cash management practices are necessary. While we recognize that certain invoices remained outstanding longer than desired, these delays were not the result of intentional noncompliance or disregard for federal requirements. Rather, they were a direct consequence of the organization’s severe operational constraints during the audit period. CARESTL HEALTH SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 44 SECTION III – FEDERAL AWARD FINDINGS AND QUESTION COSTS (Continued) As outlined in our financial management response to HRSA, CareSTL Health was simultaneously navigating multiple federally driven demands, including an unexpected and unannounced full operational site visit and the pressures associated with reimbursement only funding. These conditions significantly strained liquidity, staffing capacity, and administrative bandwidth. The reimbursement only structure, in particular, created unavoidable timing gaps between the incurrence of costs and the availability of cash to satisfy vendor obligations. These challenges were further compounded by staffing shortages and the inability to retain personnel dedicated to financial operations due to lack of funding. Management agrees with the recommendations provided and has already begun implementing corrective actions to strengthen cash management and ensure timely disbursement of obligations. These actions include: ▪ Establishing formal accounts payable aging review processes ▪ Implementing structured monitoring and escalation procedures for overdue items ▪ Aligning drawdown and disbursement practices with 2 CFR 200.305 ▪ Developing Prompt Payment Act–aligned policies with defined timelines ▪ Conducting periodic cash flow reviews to ensure compliance ▪ Assigning clear oversight responsibility for payment processing and documentation CareSTL Health is committed to improving the timeliness of payments and enhancing internal controls to ensure full compliance with federal cash management and prompt payment requirements moving forward.
Finding No.: 2023-002 Federal Agency: U.S. Department of Commerce AL Program: 11.482 Coral Reef Preservation Program Federal Award Nos.: NA20NOS4820198 Area: Cash Management Questioned Costs: $248,189 Criteria: 2 CFR 200.305(b) requires payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient. 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. 2 CFR 200.305(b)(1) requires that the recipient or subrecipient must maintain 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. Condition: Of thirteen (13) cash drawdowns totaling $759,083, eight (8) cash drawdowns totaling $592,568 were tested. For one (1) sample or (or 13% of drawdowns tested), the Trust did not demonstrate implementation of procedures to minimize the time elapsing between the transfer of funds from the federal agencies and disbursement of funds for program purposes Cause: The Trust does not maintain written procedures to ensure that time elapsing between the transfer of funds from the U.S. federal agency or pass-through entity and the disbursements of funds is minimized. Effect: The Trust is in noncompliance with applicable cash management requirements which resulted in questioned costs of $248,189. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The Trust should establish written procedures to minimize the number of days elapsing between transfer of funds from U.S. federal agency or pass-through entity and disbursements of funds. Views of Responsible Officials: Management agrees with the finding. See separate Corrective Action Plan
Finding 2023-010—Cash Management Material Weakness / Material Noncompliance Federal Program: All federal awards. Criteria: Under 2 CFR 200.305, entities must minimize the time between incurring costs and drawing federal funds or receiving reimbursement. Condition: Subgrantee amounts included amounts drawn down but not sent to the subgrantees in a timely manner. Management adjusted the amounts to reduce the subgrantee expenses and related revenue for the amounts that were not sent to subgrantees. Cause: Accounting was recording subgrantee expenses when the funds were drawn down and not when the funds were sent to the subgrantees. Effect: Overstatement of subgrantee expenses and the time between incurring costs and drawing federal funds was not minimized. Questioned costs: None noted. Context: IFDC recorded $1,016,519 in subgrantee expenses and related revenue for amounts that were drawn down but not sent to the subgrantees. Repeat Finding: No Recommendation: IFDC should minimize the time between incurring costs and drawing federal funds. Views of responsible officials and planned corrective actions: Management agrees with the finding. See corrective action plan.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (Eviction Rental Assistance Program 2.0) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0002 2022 Pass-Through Agency: Washington State Department of Commerce Pass-Through Number(s): 21-4619C-104 Award Period: 10/1/2021 - 6/30/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance Criteria or specific requirement: Uniform Guidance permits advance payments; however, advance payments must be limited to the minimum amounts needed and timed to meet the immediate cash requirements of the recipient (2 CFR §200.305(b)(1)). In addition, Uniform Guidance requires non‑Federal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that the award is being managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award (2 CFR §200.303). Condition: The auditee billed the Washington State Department of Commerce for the Emergency Rental Assistance Program (ERA2) and received federal funding totaling $8,674,165.38 over the life of the grant. While total eligible expenditures incurred over the life of the grant exceeded this amount, billing activity occurred in advance of eligible expenditures at certain points during the grant period. As a result, the auditee received federal funds in advance of incurring allowable expenditures, resulting in excess federal cash on hand of $47,833.36 at the time of billing. Context: The Emergency Rental Assistance Program (ERAP 2.0) allows for a combination of advance payments and cost‑reimbursement payments. As a result, recipients must maintain controls to ensure that advances are limited to immediate cash needs and reconciled to eligible expenditures incurred Cause: The auditee did not have sufficient procedures in place to ensure that federal reimbursement requests and advance payments were limited to actual eligible expenditures incurred as of the billing date and that excess advances were timely identified and monitored. Effect: The auditee’s billing practices resulted in the receipt of federal funds in advance of incurring allowable costs, which constitutes noncompliance with Uniform Guidance cash‑management requirements. This increased the risk that federal funds were not appropriately limited to immediate cash needs and were not timely identified as advances requiring monitoring or deferral. Repeat Finding: No. Recommendation: We recommend that the auditee strengthen controls over grant billing and cash management to ensure that reimbursement requests and advance payments submitted to the pass‑through entity are limited to immediate cash needs and supported by allowable costs incurred as of the billing date, in accordance with Uniform Guidance requirements. Views of responsible officials: Management agrees with the finding and has prepared a Corrective Action Plan.
Criteria: Regulations require that the Organization must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient, to comply with 2 CFR § 200.305(b). Condition: The 93.493 grant is a reimbursement type grant, subject to an approved preliminary expense budget, as the grant agreement does not specifically indicate that it is an advance-type grant. As such, all supported expenses should be recognized before applying for funding or expended within a “reasonable” period subsequent to receipt of funds. Effect: A portion of reimbursement funds were received prior to supporting expenditures being recognized, and funds were not subsequently expended within a “reasonable” period. Questioned Costs: No questioned costs were identified as a result of our procedures. Cause: The Organization applied for grant drawdowns based on projections and expended funds greater than 30 days beyond receipt, resulting in expenditures occurring prior to being identified as qualified expenditures. Recommendation: The Organization should review internal policies related to drawdowns to ensure that drawdowns occur in compliance with Uniform Guidance. Views of Responsible Officials: We agree with finding and will follow prescribed recommendation
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.
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.
Finding 2023-001 Lack of Internal Controls over Cash Management Federal Agency: U.S. Department of the Treasury Federal Programs: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Numbers: 21.027 Award Number: SLFRP3171/4774 Award Years: 2021 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, which 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 funds drawn down were not used for other grant expenditures. The Village’s cash balances for all governmental funds amounted to $3,569,292 at September 30, 2023. The unearned revenues were $3,789,475 which resulted in a shortfall of $220,183. The unearned revenue for the CSLFRF Fund was $2,941,712. Cause: Lack of internal controls over cash management. Effect: The Village requested and received advances for various federal programs to cover expenditures. Deposits were used to fund other programs of the Village. Questioned Costs: $220,183, which is the shortfall between cash and investment balances and the unearned revenue balances. Repeat Finding: This is a repeat of finding 2022-001, and since this 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 in an effort to ensure that unearned revenue balances do not exceed total cash and investments. Management’s Response: Management concurs with this finding. See corrective action plan.
Under the requirements of 2 CFR section 200.305(9), interest earned in excess of $500 per year on federal cash draws must be annually remitted to the Department of Health and Human Services, Payment Management System. For ALN 19.517, the interest earned in excess of $500 of $279 was not remitted to the Department of Health and Human Services, Payment Management System for fiscal year ended September 30, 2023.
Under the requirements of 2 CFR section 200.305(9), interest earned in excess of $500 per year on federal cash draws must be annually remitted to the Department of Health and Human Services, Payment Management System. For ALN 19.517, the interest earned in excess of $500 of $279 was not remitted to the Department of Health and Human Services, Payment Management System for fiscal year ended September 30, 2023.
Under the requirements of 2 CFR section 200.305(9), interest earned in excess of $500 per year on federal cash draws must be annually remitted to the Department of Health and Human Services, Payment Management System. For ALN 19.517, the interest earned in excess of $500 of $279 was not remitted to the Department of Health and Human Services, Payment Management System for fiscal year ended September 30, 2023.
Under the requirements of 2 CFR section 200.305(9), interest earned in excess of $500 per year on federal cash draws must be annually remitted to the Department of Health and Human Services, Payment Management System. For ALN 19.517, the interest earned in excess of $500 of $279 was not remitted to the Department of Health and Human Services, Payment Management System for fiscal year ended September 30, 2023.
Under the requirements of 2 CFR section 200.305(9), interest earned in excess of $500 per year on federal cash draws must be annually remitted to the Department of Health and Human Services, Payment Management System. For ALN 19.517, the interest earned in excess of $500 of $279 was not remitted to the Department of Health and Human Services, Payment Management System for fiscal year ended September 30, 2023.
Under the requirements of 2 CFR section 200.305(9), interest earned in excess of $500 per year on federal cash draws must be annually remitted to the Department of Health and Human Services, Payment Management System. For ALN 19.517, the interest earned in excess of $500 of $279 was not remitted to the Department of Health and Human Services, Payment Management System for fiscal year ended September 30, 2023.
Under the requirements of 2 CFR 200.305 (b)(3), When the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or passthrough entity reasonably believes the request to be improper. For ALN 19.517, all selections tested of payments to subrecipients, MTI did not remit payment with federal funds timely, with time between receipt of subrecipient invoice and MTI payment ranging from 3 to 6 months. Total federal funds passed through to subrecipients is $525,953 of which $169,733 was tested.
Under the requirements of 2 CFR 200.305 (b)(3), When the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or passthrough entity reasonably believes the request to be improper. For ALN 19.517, all selections tested of payments to subrecipients, MTI did not remit payment with federal funds timely, with time between receipt of subrecipient invoice and MTI payment ranging from 3 to 6 months. Total federal funds passed through to subrecipients is $525,953 of which $169,733 was tested.
Under the requirements of 2 CFR 200.305 (b)(3), When the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or passthrough entity reasonably believes the request to be improper. For ALN 19.517, all selections tested of payments to subrecipients, MTI did not remit payment with federal funds timely, with time between receipt of subrecipient invoice and MTI payment ranging from 3 to 6 months. Total federal funds passed through to subrecipients is $525,953 of which $169,733 was tested.
Under the requirements of 2 CFR 200.305 (b)(3), When the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or passthrough entity reasonably believes the request to be improper. For ALN 19.517, all selections tested of payments to subrecipients, MTI did not remit payment with federal funds timely, with time between receipt of subrecipient invoice and MTI payment ranging from 3 to 6 months. Total federal funds passed through to subrecipients is $525,953 of which $169,733 was tested.
Under the requirements of 2 CFR 200.305 (b)(3), When the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or passthrough entity reasonably believes the request to be improper. For ALN 19.517, all selections tested of payments to subrecipients, MTI did not remit payment with federal funds timely, with time between receipt of subrecipient invoice and MTI payment ranging from 3 to 6 months. Total federal funds passed through to subrecipients is $525,953 of which $169,733 was tested.
Under the requirements of 2 CFR 200.305 (b)(3), When the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or passthrough entity reasonably believes the request to be improper. For ALN 19.517, all selections tested of payments to subrecipients, MTI did not remit payment with federal funds timely, with time between receipt of subrecipient invoice and MTI payment ranging from 3 to 6 months. Total federal funds passed through to subrecipients is $525,953 of which $169,733 was tested.
Federal Aid Policies Finding 2023-002 Condition: The Authority’s management has completely turned over and been restructured. However, the Authority’s policies for federal aid approved in 2021 have not been revised to update for the current management structure. The policies have also not been updated for changes in the 2 CFR 200 that have occurred. Criteria: The 2 CFR 200 requires the adoption of federal aid policies and that they are to be updated and maintained in accordance with the federal regulations. These policies include the following along with the 2 CFR 200 reference. a. Cash Management Procedure –200.302(b)(6) and 200.305 b. Cost Allowability Procedures –200.302(b)(7) c. Conflicts of Interest Policy –200.318(c) d. Procurement Procedures –200.318(a) and 200.319(d) e. Method for Conducting Technical Evaluations of Proposals and Selecting Recipients –200.320(b)(2)(ii) f. Travel Policy –200.475(a) g. Procedures for Managing Equipment –200.313(d) h. Employee Benefits –200.431 Cause: The Authority has experienced a high turnover of employees since 2021 when the policies were adopted and have not been reviewed since their adoption. Effect: The Authority is noncompliant with 2 CFR 200. Directive: We direct the Authority review and update all federal aid policies and implement procedures to ensure that they are being reviewed at least once a year for changes in the Authority’s management structure or changes that occur in the 2 CFR 200. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will update their federal policies to comply with 2 CFR 200 and will review all policies on an annual basis going forward.
Federal Aid Policies Finding 2023-002 Condition: The Authority’s management has completely turned over and been restructured. However, the Authority’s policies for federal aid approved in 2021 have not been revised to update for the current management structure. The policies have also not been updated for changes in the 2 CFR 200 that have occurred. Criteria: The 2 CFR 200 requires the adoption of federal aid policies and that they are to be updated and maintained in accordance with the federal regulations. These policies include the following along with the 2 CFR 200 reference. a. Cash Management Procedure –200.302(b)(6) and 200.305 b. Cost Allowability Procedures –200.302(b)(7) c. Conflicts of Interest Policy –200.318(c) d. Procurement Procedures –200.318(a) and 200.319(d) e. Method for Conducting Technical Evaluations of Proposals and Selecting Recipients –200.320(b)(2)(ii) f. Travel Policy –200.475(a) g. Procedures for Managing Equipment –200.313(d) h. Employee Benefits –200.431 Cause: The Authority has experienced a high turnover of employees since 2021 when the policies were adopted and have not been reviewed since their adoption. Effect: The Authority is noncompliant with 2 CFR 200. Directive: We direct the Authority review and update all federal aid policies and implement procedures to ensure that they are being reviewed at least once a year for changes in the Authority’s management structure or changes that occur in the 2 CFR 200. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will update their federal policies to comply with 2 CFR 200 and will review all policies on an annual basis going forward.
Federal Aid Policies Finding 2023-002 Condition: The Authority’s management has completely turned over and been restructured. However, the Authority’s policies for federal aid approved in 2021 have not been revised to update for the current management structure. The policies have also not been updated for changes in the 2 CFR 200 that have occurred. Criteria: The 2 CFR 200 requires the adoption of federal aid policies and that they are to be updated and maintained in accordance with the federal regulations. These policies include the following along with the 2 CFR 200 reference. a. Cash Management Procedure –200.302(b)(6) and 200.305 b. Cost Allowability Procedures –200.302(b)(7) c. Conflicts of Interest Policy –200.318(c) d. Procurement Procedures –200.318(a) and 200.319(d) e. Method for Conducting Technical Evaluations of Proposals and Selecting Recipients –200.320(b)(2)(ii) f. Travel Policy –200.475(a) g. Procedures for Managing Equipment –200.313(d) h. Employee Benefits –200.431 Cause: The Authority has experienced a high turnover of employees since 2021 when the policies were adopted and have not been reviewed since their adoption. Effect: The Authority is noncompliant with 2 CFR 200. Directive: We direct the Authority review and update all federal aid policies and implement procedures to ensure that they are being reviewed at least once a year for changes in the Authority’s management structure or changes that occur in the 2 CFR 200. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will update their federal policies to comply with 2 CFR 200 and will review all policies on an annual basis going forward.
Federal Aid Policies Finding 2023-002 Condition: The Authority’s management has completely turned over and been restructured. However, the Authority’s policies for federal aid approved in 2021 have not been revised to update for the current management structure. The policies have also not been updated for changes in the 2 CFR 200 that have occurred. Criteria: The 2 CFR 200 requires the adoption of federal aid policies and that they are to be updated and maintained in accordance with the federal regulations. These policies include the following along with the 2 CFR 200 reference. a. Cash Management Procedure –200.302(b)(6) and 200.305 b. Cost Allowability Procedures –200.302(b)(7) c. Conflicts of Interest Policy –200.318(c) d. Procurement Procedures –200.318(a) and 200.319(d) e. Method for Conducting Technical Evaluations of Proposals and Selecting Recipients –200.320(b)(2)(ii) f. Travel Policy –200.475(a) g. Procedures for Managing Equipment –200.313(d) h. Employee Benefits –200.431 Cause: The Authority has experienced a high turnover of employees since 2021 when the policies were adopted and have not been reviewed since their adoption. Effect: The Authority is noncompliant with 2 CFR 200. Directive: We direct the Authority review and update all federal aid policies and implement procedures to ensure that they are being reviewed at least once a year for changes in the Authority’s management structure or changes that occur in the 2 CFR 200. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will update their federal policies to comply with 2 CFR 200 and will review all policies on an annual basis going forward.
Federal Aid Policies Finding 2023-002 Condition: The Authority’s management has completely turned over and been restructured. However, the Authority’s policies for federal aid approved in 2021 have not been revised to update for the current management structure. The policies have also not been updated for changes in the 2 CFR 200 that have occurred. Criteria: The 2 CFR 200 requires the adoption of federal aid policies and that they are to be updated and maintained in accordance with the federal regulations. These policies include the following along with the 2 CFR 200 reference. a. Cash Management Procedure –200.302(b)(6) and 200.305 b. Cost Allowability Procedures –200.302(b)(7) c. Conflicts of Interest Policy –200.318(c) d. Procurement Procedures –200.318(a) and 200.319(d) e. Method for Conducting Technical Evaluations of Proposals and Selecting Recipients –200.320(b)(2)(ii) f. Travel Policy –200.475(a) g. Procedures for Managing Equipment –200.313(d) h. Employee Benefits –200.431 Cause: The Authority has experienced a high turnover of employees since 2021 when the policies were adopted and have not been reviewed since their adoption. Effect: The Authority is noncompliant with 2 CFR 200. Directive: We direct the Authority review and update all federal aid policies and implement procedures to ensure that they are being reviewed at least once a year for changes in the Authority’s management structure or changes that occur in the 2 CFR 200. Management’s Response--Corrective Action Plan: Contact person is Rufus Adams, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority will update their federal policies to comply with 2 CFR 200 and will review all policies on an annual basis going forward.
Item 2023‐002 Written policies, procedures, and standards of conduct COVID 19 – Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number 21.027 U.S. Department of Treasury Grant period: Year ended September 30, 2023 Questioned Costs – $0 Condition – The City does not have all of the written policies, procedures and standards of conduct required by UG. Criteria – 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non‐ Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non‐ Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: § 200.302 Financial management § 200.305 Payment § 200.319 Competition § 200.320 Methods of procurement to be followed § 200.430 Compensation—personal services § 200.431 Compensation—fringe benefits Cause of Condition – The City has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Potential Effect of Condition – Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation – We recommend that the City implement the required written policies and procedures. Management’s Response – Management agrees with the finding and will implement the necessary written policies to comply with the UG. Management anticipates completion by September 30, 2024.
2023 002 Assistance Listing, Federal Agency, and Program Name ALN 10.557, U.S. Department of Agriculture, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Federal Award Identification Number and Year E20233413 00 (2023) and E20232456 00 (2023) Pass through Entity Michigan Department of Health and Human Services Finding Type Significant deficiency Repeat Finding No Criteria Per 2 CFR section 200.305(b)(9), interest earned amounts up to $500 per year may be retained by the non Federal entity for administrative expense. Any additional interest earned on Federal advanced payments deposited in interest bearing accounts must be remitted annually to the Department of Health and Human Services Payment Management System (PMS)t. Condition The County did not track WIC interest income earned throughout the fiscal year, resulting in the County not refunding the Department of Health and Human Services the excess of $500 earned during the year. Questioned Costs $806 Identification of How Questioned Costs Were Computed The County determined that there was $1,306 of interest earned, less $500 that can be retained for administrative expense, results in $806 that should have been remitted back to the Department of Health and Human Services. Context From October 1, 2022 through September 30, 2023, the County received advanced payments for the WIC program, which were held in an interest bearing account and those funds earned interest in excess of $500. Cause and Effect The County did not have a control in place to track the interest earned on WIC advanced payments to note if they exceeded $500 throughout the year. This resulted in the County not properly remitting the excess interest amount earned back to the Department of Health and Human Services at the end of the fiscal year. Recommendation We recommend that an internal control be put in place to monitor interest earned monthly or quarterly, to ensure that if it exceeds $500 on WIC advance payments, that it is properly remitted back to the Department of Health and Human Resources annually. Views of Responsible Officials and Planned Corrective Actions The financial analyst assigned to the grant will review interest income earned throughout the fiscal year and ensure any amount exceeding $500 is returned to the Department of Health and Human Services.
2023 002 Assistance Listing, Federal Agency, and Program Name ALN 10.557, U.S. Department of Agriculture, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Federal Award Identification Number and Year E20233413 00 (2023) and E20232456 00 (2023) Pass through Entity Michigan Department of Health and Human Services Finding Type Significant deficiency Repeat Finding No Criteria Per 2 CFR section 200.305(b)(9), interest earned amounts up to $500 per year may be retained by the non Federal entity for administrative expense. Any additional interest earned on Federal advanced payments deposited in interest bearing accounts must be remitted annually to the Department of Health and Human Services Payment Management System (PMS)t. Condition The County did not track WIC interest income earned throughout the fiscal year, resulting in the County not refunding the Department of Health and Human Services the excess of $500 earned during the year. Questioned Costs $806 Identification of How Questioned Costs Were Computed The County determined that there was $1,306 of interest earned, less $500 that can be retained for administrative expense, results in $806 that should have been remitted back to the Department of Health and Human Services. Context From October 1, 2022 through September 30, 2023, the County received advanced payments for the WIC program, which were held in an interest bearing account and those funds earned interest in excess of $500. Cause and Effect The County did not have a control in place to track the interest earned on WIC advanced payments to note if they exceeded $500 throughout the year. This resulted in the County not properly remitting the excess interest amount earned back to the Department of Health and Human Services at the end of the fiscal year. Recommendation We recommend that an internal control be put in place to monitor interest earned monthly or quarterly, to ensure that if it exceeds $500 on WIC advance payments, that it is properly remitted back to the Department of Health and Human Resources annually. Views of Responsible Officials and Planned Corrective Actions The financial analyst assigned to the grant will review interest income earned throughout the fiscal year and ensure any amount exceeding $500 is returned to the Department of Health and Human Services.