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.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2024-001: Cash Management (Material Weakness) Federal Programs: ALN 19.019 Criteria: According to 2 CFR 200.305, recipients must draw Federal funds only in amounts necessary to meet immediate cash needs for program expenditures. Funds should be disbursed as soon as possible, generally within three business days of receipt. Condition: During our testing of cash management compliance, we noted that ICMEC drew down a total of $233,494 on Federal funds in advance of need. The remaining funds were used for other ICMEC programmatic work. Cause: ICMEC did not have adequate procedures to align Federal drawdown requests with immediate program disbursement requirements. Drawdowns were based on budgeted monthly cash needs rather than actual expenditures. Effect or Potential Effect: Drawing funds in advance of need results in excess Federal cash being held by ICMEC, which is not permitted under Federal regulations. This increases the risk of misuse of Federal funds and may result in ICMEC owing interest to the Federal Government. Questioned Costs: $233,494 Context: Our audit procedures consisted of testwork completed on individual cash receipts and draw downs requests and evaluating the refundable advance analysis prepared by ICMEC as of December 31, 2024. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend ICMEC establish and implement procedures to ensure drawdown requests are limited to actual, immediate cash needs, with monitoring to confirm that Federal funds are disbursed within three business days of receipt.
Finding 2024-004 – All Federal Programs – Material Weakness Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance - Cash Management Federal Agency: National Science Foundation Federal Program Name: Research and Development Cluster - NSF Technology, Innovation and Partnerships CO-WY Climate Resilience Engine Assistance Listing Number: 47.084 Federal Award Identification Number: 2315760 Award Period: March 1, 2024 – February 28, 2026 Criteria or specific requirement: Per the Uniform Guidance (2 CFR §200.305), non-federal entities must minimize the time between the transfer of funds from the U.S. Treasury and the disbursement for program purposes. Drawdowns must be based on immediate cash needs and supported by incurred expenses. Condition: During the audit of federal program compliance, it was identified that the entity did not have a consistent process for tracking, calculating, reviewing and approving federal draw downs. Specifically, cash management procedures did not consistently ensure that funds drawn down were limited to actual expenditures incurred, resulting in excess cash balances held temporarily beyond the allowable timeframe. Questioned costs: None noted for major program as of December 31, 2024 as drawdowns occurred after year end, $65,000 for other program. Context: We noted through our testing of drawdowns and related expenses that the amount of the draw downs made after year end were in excess of what was required for costs incurred through December 31, 2024, however there were no advance amount held as of December 31, 2024. Management trued up the draws during 2025 and 2026. Cause: The entity lacked effective internal controls to reconcile actual drawdowns with expenditures incurred. Effect: This deficiency resulted in noncompliance with federal cash management requirements and exposed the entity to potential interest liabilities. It also indicates a reasonable possibility that material noncompliance with federal requirements may not be prevented or detected and corrected on a timely basis. Repeat finding: No Recommendation: We recommend that management ensure drawdowns are strictly aligned with incurred and allowable expenses and the use of a consistent template to determine the amount of the drawdown that includes: 1) pre-drawdown verification of expense documentation reviewed by knowledgeable staff 2) monthly reconciliations of drawdown activity to actual expenditures, 3) training for staff involved in federal fund management on Uniform Guidance requirements. Views of responsible officials: There is no disagreement with the audit finding. See Corrective Action Plan.
ALN 14.251 and ALN 21.027 Finding #2024‐006 Financial Policies and Procedures Repeat Finding: No Condition: The Organization did not have formalized, written financial policies and procedures that address key Uniform Guidance requirements. Criteria: Under 2 CFR 200.302(b), non‐federal entities must establish and maintain effective financial management systems that provide accurate, current, and complete disclosure of the financial results of each federal award. Uniform Guidance further requires that entities implement written policies and procedures governing: · Allowable costs (2 CFR 200.302(b)(7) and 200.403–200.405), · Procurement (2 CFR 200.317–200.327), · Cash management (2 CFR 200.305), · Travel costs (2 CFR 200.475), and · Conflict of interest (2 CFR 200.318(c)(1)). Written policies serve as the framework for consistent compliance with federal requirements. Cause: The Organization had not developed or adopted written financial policies, relying instead on informal practices and staff knowledge to manage federal awards. Effect: The absence of formalized financial policies increases the risk of noncompliance with Uniform Guidance, inconsistent application of requirements, and potential misuse of federal funds. The lack of a documented framework also limits accountability and makes it difficult to train new staff or demonstrate compliance to oversight agencies. Questioned Costs: None noted. Perspective Information: This condition applied to the Organization’s overall financial management system and impacted all federal programs administered during the year ended December 31, 2024. As such, the lack of formalized financial policies represents a systemic issue and a material weakness in internal control over compliance. Recommendation: We recommend that the Organization adopt formal, written financial policies and procedures that address all Uniform Guidance requirements applicable to federal awards. These policies should be approved by management and the governing body, disseminated to staff, and reviewed periodically to ensure continued compliance. Reporting Views of Responsible Officials: The Organization agrees with the finding. The Organization will establish formalized accounting policies and procedures that adhere to the requirements of the Uniform Guidance.
Cash management - I noted that the AKNWRC did not have sufficient cash on hand in excess of unearned grant revenue. Per 2 CFR, Section 200.305(b), the AKNWRC must ensure all advanced funds are spent on allowable items. No questioned costs. There was a large loss in the current year that caused cash on hand to be less than unearned grant revenue. At year end, total cash on hand was less than total unearned grant revenue. Total cash on hand was $52,267 while total unearned grant revenue was $265,804. Total unearned grant revenue related to the FVPSA 93.592 grants was $169,768 and total unearned grant revenue related to the DHHS, Covid-19, ARP Support for Survivors of Domestic Violence, 93.496 was $12,432. It is imperative that AKNWRC does not incur losses in its administrative function, to ensure that grant drawdowns are retained until spent on allowable grant expenses. This was not a repeat finding.
Assistance Listing Number(s): 10.902 Name of Federal Program or Cluster: Soil and Water Conservation Name of Federal Agency: Department of Agriculture Award Periods: Grant # NR205F48XXXXC006 and period September 30, 2020 through September 30, 2025 and Grant # FAN NR223A750022C002 and period December 21, 2023 through September 30, 2025 Assistance Listing Number(s): 10.912 Name of Federal Program or Cluster: Environmental Quality Incentives Program Name of Federal Agency: Department of Agriculture Award Periods: Grant # NR205F48XXXXC006 and period September 30, 2020 through September 30, 2025 and Grant # FAN NR223A750022C002 and period December 21, 2023 through September 30, 2025 Assistance Listing Number(s): 10.924 Name of Federal Program or Cluster: Conservation Stewardship Program Name of Federal Agency: Department of Agriculture Award Periods: Grant # NR205F48XXXXC006 and period September 30, 2020 through September 30, 2025 and Grant # FAN NR223A750022C002 and period December 21, 2023 through September 30, 2025 Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies. Condition: There are no written policies and procedures for allowable costs/cost principles, cash management, procurement and suspension and debarment requirements. Cause: The Organization does not have a process for reviewing their accounting policies and procedures manual on a regular basis to ensure written procedures conform to Uniform Guidance requirements. Effect or Potential Effect: A lack of written policies, procedures, and standards of conduct may result in noncompliance with the requirements of federal programs and/or disallowed costs. Repeat Finding: Yes Recommendation: We recommend the Organization’s written policies and procedures be reviewed and updated for compliance with Uniform Guidance. he organization should become familiar with the requirements of Subparts D and E of 2 CFR Part 200 and establish appropriate written policies, procedures, and standards of conduct. Views of Responsible Officials: Management agrees with the finding and they will evaluate our findings to determine an appropriate corrective action. Financial policies and procedures will be created and implemented. Annual schedule of expenditures will be created by Executive Director or Bookkeeper and reviewed by Board of Directors.
Cash Management Federal Department – U.S. Department of Justice Pass-through Illinois Criminal Justice Information Authority Federal Award Identification Number and Year: 15JOVW-21-GG-00543-STOP and 2021 15JOVW-22-GG-00422-STOP and 2022 Violence Against Women Formula Grants, Federal Assistance Listing #16.588 County Department – State’s Attorney Office Finding 2024 – 001 CRITERIA 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D - Post Federal Award Requirements Standards for Financial and Program Management, Section 200.305 Federal Payment (b)(3) Payments for recipients and subrecipients other than States requires that, “Reimbursement is preferred when the requirements in paragraph (b) cannot be met, when the Federal agency or pass-through entity sets a specific condition per Section 200.208, when requested by the recipient or subrecipient, when a Federal award is for construction, or when a significant portion of the construction project is accomplished through private market financing or Federal loans and the Federal award constitutes a minor portion of the project. When the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” CONDITION During the current audit period, the Cook County State’s Attorney Office (SAO) did not adequately comply with its cash management requirements in accordance with federal regulations. CAUSE Based on discussions with management, a portion of the late payments resulted from the SAO’s Program Managers being unable to provide sufficient documentation demonstrating that the delays were due to late invoice submissions by subrecipients. As a result, the Auditor could not verify whether the non-compliance was attributable to subrecipient actions. The remaining delays were due to weaknesses in the payment processing system, which relied heavily on email communications between involved parties. These emails, initiated by the Accounts Payable Processor, were not acted upon in a timely manner, resulting in payments being processed well over the thirty (30) days after initial submission. EFFECT The failure to pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s billing or payment request is a violation of federal regulations. This could impact the subrecipient’s ability to adequately perform its programmatic responsibilities under the program. QUESTIONED COSTS None. CONTEXT During our test of 29 subrecipients’ expenditures, we noted 17 instances where payments to the subrecipients’ were not made within 30 days after receipt of the subrecipient’s payment request. The payments were submitted late, ranging from 2 to 313 days late. IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend that SAO develop and implement procedures to ensure payments to subrecipients are made within 30 days after receipt of the subrecipients billing or payment request, as required. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County’s corrective action plan is on page 38.
Finding: 2024-007 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: Due to staff turnover, the Organization was unable to immediately provide proper documentation to support the fact that qualifying expenditures were made prior to making certain drawdowns of federal funds. No grant draws exceeded the cash needs for grant-related expenditures. However, failure to reconcile expenditures to federal grant draws, and failure to maintain such documentation, could result in advance draws. Cause: The Organization did not maintain proper documentation of expenditures to support the drawdowns made, Effect: Without proper controls over the reconciliation of expenditures to federal grant draws, drawdowns may occur for the incorrect amount, for the wrong period, and for costs that may not have been incurred. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: It is recommended that management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented. Views of Responsible Officials: The Organization understands the requirements to document expenditures prior to drawing down federal funds. Procedures will be established to ensure that federal grant expenditures are documented so that advance draws of federal funds do not occur. Contact Person: Suzanne Freeman, CEO Anticipated Date of Completion: October 31, 2025
Finding: 2024-007 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: Due to staff turnover, the Organization was unable to immediately provide proper documentation to support the fact that qualifying expenditures were made prior to making certain drawdowns of federal funds. No grant draws exceeded the cash needs for grant-related expenditures. However, failure to reconcile expenditures to federal grant draws, and failure to maintain such documentation, could result in advance draws. Cause: The Organization did not maintain proper documentation of expenditures to support the drawdowns made, Effect: Without proper controls over the reconciliation of expenditures to federal grant draws, drawdowns may occur for the incorrect amount, for the wrong period, and for costs that may not have been incurred. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: It is recommended that management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented. Views of Responsible Officials: The Organization understands the requirements to document expenditures prior to drawing down federal funds. Procedures will be established to ensure that federal grant expenditures are documented so that advance draws of federal funds do not occur. Contact Person: Suzanne Freeman, CEO Anticipated Date of Completion: October 31, 2025
Finding: 2024-007 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: Due to staff turnover, the Organization was unable to immediately provide proper documentation to support the fact that qualifying expenditures were made prior to making certain drawdowns of federal funds. No grant draws exceeded the cash needs for grant-related expenditures. However, failure to reconcile expenditures to federal grant draws, and failure to maintain such documentation, could result in advance draws. Cause: The Organization did not maintain proper documentation of expenditures to support the drawdowns made, Effect: Without proper controls over the reconciliation of expenditures to federal grant draws, drawdowns may occur for the incorrect amount, for the wrong period, and for costs that may not have been incurred. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: It is recommended that management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented. Views of Responsible Officials: The Organization understands the requirements to document expenditures prior to drawing down federal funds. Procedures will be established to ensure that federal grant expenditures are documented so that advance draws of federal funds do not occur. Contact Person: Suzanne Freeman, CEO Anticipated Date of Completion: October 31, 2025
Finding: 2024-007 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: Due to staff turnover, the Organization was unable to immediately provide proper documentation to support the fact that qualifying expenditures were made prior to making certain drawdowns of federal funds. No grant draws exceeded the cash needs for grant-related expenditures. However, failure to reconcile expenditures to federal grant draws, and failure to maintain such documentation, could result in advance draws. Cause: The Organization did not maintain proper documentation of expenditures to support the drawdowns made, Effect: Without proper controls over the reconciliation of expenditures to federal grant draws, drawdowns may occur for the incorrect amount, for the wrong period, and for costs that may not have been incurred. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: It is recommended that management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented. Views of Responsible Officials: The Organization understands the requirements to document expenditures prior to drawing down federal funds. Procedures will be established to ensure that federal grant expenditures are documented so that advance draws of federal funds do not occur. Contact Person: Suzanne Freeman, CEO Anticipated Date of Completion: October 31, 2025
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
Cash Management Federal Department – U.S. Department of Justice Pass-through Illinois Criminal Justice Information Authority Federal Award Identification Number and Year: 15JOVW-21-GG-00543-STOP and 2021 15JOVW-22-GG-00422-STOP and 2022 Violence Against Women Formula Grants, Federal Assistance Listing #16.588 County Department – State’s Attorney Office Finding 2024 – 001 CRITERIA 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D - Post Federal Award Requirements Standards for Financial and Program Management, Section 200.305 Federal Payment (b)(3) Payments for recipients and subrecipients other than States requires that, “Reimbursement is preferred when the requirements in paragraph (b) cannot be met, when the Federal agency or pass-through entity sets a specific condition per Section 200.208, when requested by the recipient or subrecipient, when a Federal award is for construction, or when a significant portion of the construction project is accomplished through private market financing or Federal loans and the Federal award constitutes a minor portion of the project. When the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” CONDITION During the current audit period, the Cook County State’s Attorney Office (SAO) did not adequately comply with its cash management requirements in accordance with federal regulations. CAUSE Based on discussions with management, a portion of the late payments resulted from the SAO’s Program Managers being unable to provide sufficient documentation demonstrating that the delays were due to late invoice submissions by subrecipients. As a result, the Auditor could not verify whether the non-compliance was attributable to subrecipient actions. The remaining delays were due to weaknesses in the payment processing system, which relied heavily on email communications between involved parties. These emails, initiated by the Accounts Payable Processor, were not acted upon in a timely manner, resulting in payments being processed well over the thirty (30) days after initial submission. EFFECT The failure to pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s billing or payment request is a violation of federal regulations. This could impact the subrecipient’s ability to adequately perform its programmatic responsibilities under the program. QUESTIONED COSTS None. CONTEXT During our test of 29 subrecipients’ expenditures, we noted 17 instances where payments to the subrecipients’ were not made within 30 days after receipt of the subrecipient’s payment request. The payments were submitted late, ranging from 2 to 313 days late. IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend that SAO develop and implement procedures to ensure payments to subrecipients are made within 30 days after receipt of the subrecipients billing or payment request, as required. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County’s corrective action plan is on page 38.
Finding: 2024-007 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: Due to staff turnover, the Organization was unable to immediately provide proper documentation to support the fact that qualifying expenditures were made prior to making certain drawdowns of federal funds. No grant draws exceeded the cash needs for grant-related expenditures. However, failure to reconcile expenditures to federal grant draws, and failure to maintain such documentation, could result in advance draws. Cause: The Organization did not maintain proper documentation of expenditures to support the drawdowns made, Effect: Without proper controls over the reconciliation of expenditures to federal grant draws, drawdowns may occur for the incorrect amount, for the wrong period, and for costs that may not have been incurred. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: It is recommended that management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented. Views of Responsible Officials: The Organization understands the requirements to document expenditures prior to drawing down federal funds. Procedures will be established to ensure that federal grant expenditures are documented so that advance draws of federal funds do not occur. Contact Person: Suzanne Freeman, CEO Anticipated Date of Completion: October 31, 2025
Finding: 2024-007 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: Due to staff turnover, the Organization was unable to immediately provide proper documentation to support the fact that qualifying expenditures were made prior to making certain drawdowns of federal funds. No grant draws exceeded the cash needs for grant-related expenditures. However, failure to reconcile expenditures to federal grant draws, and failure to maintain such documentation, could result in advance draws. Cause: The Organization did not maintain proper documentation of expenditures to support the drawdowns made, Effect: Without proper controls over the reconciliation of expenditures to federal grant draws, drawdowns may occur for the incorrect amount, for the wrong period, and for costs that may not have been incurred. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: It is recommended that management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented. Views of Responsible Officials: The Organization understands the requirements to document expenditures prior to drawing down federal funds. Procedures will be established to ensure that federal grant expenditures are documented so that advance draws of federal funds do not occur. Contact Person: Suzanne Freeman, CEO Anticipated Date of Completion: October 31, 2025
Finding: 2024-007 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: Due to staff turnover, the Organization was unable to immediately provide proper documentation to support the fact that qualifying expenditures were made prior to making certain drawdowns of federal funds. No grant draws exceeded the cash needs for grant-related expenditures. However, failure to reconcile expenditures to federal grant draws, and failure to maintain such documentation, could result in advance draws. Cause: The Organization did not maintain proper documentation of expenditures to support the drawdowns made, Effect: Without proper controls over the reconciliation of expenditures to federal grant draws, drawdowns may occur for the incorrect amount, for the wrong period, and for costs that may not have been incurred. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: It is recommended that management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented. Views of Responsible Officials: The Organization understands the requirements to document expenditures prior to drawing down federal funds. Procedures will be established to ensure that federal grant expenditures are documented so that advance draws of federal funds do not occur. Contact Person: Suzanne Freeman, CEO Anticipated Date of Completion: October 31, 2025
Finding: 2024-007 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Cash Management, 2 CFR 200.305(b)(1) Condition: Due to staff turnover, the Organization was unable to immediately provide proper documentation to support the fact that qualifying expenditures were made prior to making certain drawdowns of federal funds. No grant draws exceeded the cash needs for grant-related expenditures. However, failure to reconcile expenditures to federal grant draws, and failure to maintain such documentation, could result in advance draws. Cause: The Organization did not maintain proper documentation of expenditures to support the drawdowns made, Effect: Without proper controls over the reconciliation of expenditures to federal grant draws, drawdowns may occur for the incorrect amount, for the wrong period, and for costs that may not have been incurred. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: It is recommended that management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented. Views of Responsible Officials: The Organization understands the requirements to document expenditures prior to drawing down federal funds. Procedures will be established to ensure that federal grant expenditures are documented so that advance draws of federal funds do not occur. Contact Person: Suzanne Freeman, CEO Anticipated Date of Completion: October 31, 2025
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 004 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-2302ILLIEA 6/1/2023; G-2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038; 24-224038 Award Period: June 1, 2023 through September 30, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters 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; interest should also be calculated on amounts of unearned revenue. Effective internal controls should include procedures that involve reimbursement requests being reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not agree to the County’s accounting records or to the amounts reported on the SEFA. The time between receiving and disbursing federal funds was not minimized, and interest on unearned revenue was not calculated. Furthermore, reimbursement requests were not reviewed and approved prior to submission, and documentation of such review was not retained. Questioned Costs: $132,322 Context: 2 of 8 reimbursement requests tested did not have supporting documentation for the exact amount received. All 8 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not complete; specifically, adjustments made to the project accounting records after the reimbursement requests were submitted caused the County to receive more funds than expenditures incurred on specific grants. Documentation of review and approval for reimbursement requests was also not retained. Effect: Lack of proper documentation and reconciliation can result in over- or under-reimbursement of federal grant funds, potentially leading to noncompliance with federal requirements and potential repayment obligations. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 004 Cash Management (Continued) Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-006. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reconciliations should be reviewed and approved by an individual other than the preparer prior to submission, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
Cash Management Grantor: Department of Health and Human Services Pass Through Entity: Advanced Regenerative Manufacturing Institute, Inc. Award Name: Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities Award Number: IDSEP22005-003 Assistance Listing Number: 93.817 Award Year: June 1, 2023-September 30, 2023 Criteria In accordance with 2 CFR 200.305 (b)(3), reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per 2 CFR 200.208, or when the non-Federal entity requests payment by reimbursement. In accordance with 2 CFR 200.334 (c) and (e), a subrecipient must liquidate all financial obligations incurred under a subaward no later than 90 calendar days after the conclusion of the period of performance of the subaward (or an earlier date as agreed upon by the pass-through entity and subrecipient). The subrecipient must promptly refund any unobligated funds that the pass-through entity paid and that are not authorized to be retained. Condition In testing the period of performance compliance requirement in accordance with the OMB Compliance Supplement, we requested support for the expenditures on the FY2024 Schedule of Federal Awards, as they were outside of the period of performance of the subaward, which ended September 30, 2023. The Company issued an invoice to Advanced Regenerative Manufacturing Institute, the Prime awardee, for $215,192 on September 14, 2023, but did not incur those expenses until after the period of performance of the subaward. Therefore, the Company requested and received the funds in advance of incurring the expenses. Further, the Company did not liquidate its obligations under the subaward within the required 90 calendar days after the conclusion of the performance of the subaward, as expenditures were recorded through August 2024. There were no terms in the award that allowed retention of unused funds. Cause The grant personnel were not aware of the invoicing requirements under the reimbursement method and invoiced the Prime awardee in advance of incurring the associated costs. Effect Federal funds were obtained in advance of incurring costs and outside of the period of performance of the subaward. Questioned Costs $215,192 Recommendation We recommend that the Company return the advance funds received to the Prime. Further, the Company should consider the need for clarifying and/or enhancing existing internal control procedures to ensure expenditures are paid in compliance with Federal reimbursement requirements and that requests for reimbursement are reviewed and validated against supporting documentation to identify any discrepancies prior to requesting reimbursement. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.
Finding 2024-008 – Cash Management (Material Weakness and Noncompliance) Information on the Federal Program: U.S. Department of Education, Higher Education- Institutional Aid, Assistance Listing No. 84.031Criteria: 2 CFR Part 200.305 establishes the methods of receiving payment from the federal agency. The College uses the reimbursement method to receive Title III funds. The non-federal entity is also required to design and implement internal controls over the cash management process. Condition: We selected 5 drawdowns for reimbursement made during the year for testing. For 4 drawdowns, there was no documentation of a review of the calculation of the amount to draw or approval to draw down the funds. Cause: The College did not have a review and approval process in place for 9 months of the fiscal year. Effect: The College’s grant reimbursements were not properly approved. Questioned Costs: None reported Recommendation: We recommend the College strengthen its policies and procedures over cash management to ensure controls are properly implemented and working effectively. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.
Finding 2024-001 – Cash Management (Material Weakness) Information on the Federal Program: U.S. Department of Education, Trio Cluster Criteria: 2 CFR 200.305 establishes the procedures for receiving federal payments. Non-federal entities must design and implement internal controls to ensure compliance with cash management requirements. Condition: We selected a sample of 24 reimbursement draw downs made during the year through the G5 payment system. Procedures were in place to accumulate expenses based on approved invoices and draw the reimbursement amount down through G5, however, documentation of review and approval of amounts to be drawn was not available. Cause: The College did not document the review and approval of the calculated reimbursement before it was drawn down. Effect: Key controls over cash management were not operating effectively. Questioned Costs: None reported Recommendation: We recommend the College strengthen its policies and procedures to properly design and implement controls over the draw down process. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.
Finding 2024-001 – Cash Management (Material Weakness) Information on the Federal Program: U.S. Department of Education, Trio Cluster Criteria: 2 CFR 200.305 establishes the procedures for receiving federal payments. Non-federal entities must design and implement internal controls to ensure compliance with cash management requirements. Condition: We selected a sample of 24 reimbursement draw downs made during the year through the G5 payment system. Procedures were in place to accumulate expenses based on approved invoices and draw the reimbursement amount down through G5, however, documentation of review and approval of amounts to be drawn was not available. Cause: The College did not document the review and approval of the calculated reimbursement before it was drawn down. Effect: Key controls over cash management were not operating effectively. Questioned Costs: None reported Recommendation: We recommend the College strengthen its policies and procedures to properly design and implement controls over the draw down process. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.
Finding 2024-001 – Cash Management (Material Weakness) Information on the Federal Program: U.S. Department of Education, Trio Cluster Criteria: 2 CFR 200.305 establishes the procedures for receiving federal payments. Non-federal entities must design and implement internal controls to ensure compliance with cash management requirements. Condition: We selected a sample of 24 reimbursement draw downs made during the year through the G5 payment system. Procedures were in place to accumulate expenses based on approved invoices and draw the reimbursement amount down through G5, however, documentation of review and approval of amounts to be drawn was not available. Cause: The College did not document the review and approval of the calculated reimbursement before it was drawn down. Effect: Key controls over cash management were not operating effectively. Questioned Costs: None reported Recommendation: We recommend the College strengthen its policies and procedures to properly design and implement controls over the draw down process. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.
Finding 2024-001 – Cash Management (Material Weakness) Information on the Federal Program: U.S. Department of Education, Trio Cluster Criteria: 2 CFR 200.305 establishes the procedures for receiving federal payments. Non-federal entities must design and implement internal controls to ensure compliance with cash management requirements. Condition: We selected a sample of 24 reimbursement draw downs made during the year through the G5 payment system. Procedures were in place to accumulate expenses based on approved invoices and draw the reimbursement amount down through G5, however, documentation of review and approval of amounts to be drawn was not available. Cause: The College did not document the review and approval of the calculated reimbursement before it was drawn down. Effect: Key controls over cash management were not operating effectively. Questioned Costs: None reported Recommendation: We recommend the College strengthen its policies and procedures to properly design and implement controls over the draw down process. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.
Finding 2024-014 – Cash Management (Significant Deficiency and Noncompliance) Identification of the Federal Program: Community Program to Improve Minority Health, ALN 93.137, Department of Health and Human Services (Minority Health). Criteria: 2 CFR 200.305 establishes methods of receiving payment from federal agencies. 2 CFR 200.303 established that recipients must establish, document and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to the City's approved fiscal policies and procedures, drawdown reports/reimbursement requests must be approved by the grants department and accounting manager or CFO. Condition: The City drew the remaining balance on the Minority Health award during the year. Documentation of review and approval for the draw was not available. Cause: The City is experiencing turnovers and staffing challenges which have led to some gaps in following procedures. Effect: The City did not document proper controls in place over cash management. Questioned Costs: None reported. Recommendation: We recommend the City should strengthen procedures to ensure it complies with its policies and procedures to ensure appropriate level of management is reviewing cash drawdown requests. Views of Responsible Officials: The City agrees with the finding. See Management’s View and Corrective Action Plan included at the end of the report.
Assistance Listing Number: 66.468 Program Title: Capitalization Grants for Drinking Water Revolving Fund Pass-through Entity: Alabama Department of Environmental Management Contract Number and Year: FS010055.02 2022 Finding Type: Significant Deficiency Known Questioned Costs: None Criteria - 2 CFR Section 200.303(a) requires nonfederal entities receiving federal awards to establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR 200.305 Federal Payment requires nonfederal entities to establish written procedures to implement the requirements of cash management of federal funding. Condition - The Organization received federal funds prior to paying contractors and had no written procedures in place for appropriately handling those funds. Cause - The Organization has not developed or implemented written procedures for appropriately handling advance federal funds. Effect - Possible noncompliance with cash management requirements of the program. Recommendation - The Organization should develop, implement and comply with written procedures to meet the requirements of 2 CFR Section 200.303(a) and 2 CFR 200.305 Federal Payment. View of Responsible Officials - The General Manager has implemented policies and procedures so the Utilities Board of the City of Oneonta will not request advance payments. Payments to contractors will issue within 10 business days of receipt of approval from Project Engineer. In the event contractors can not be paid within 30 days, advanced funds received will be deposited into a designated insured interest bearing account until contractors are paid.
Item 2024-001 Uniform Guidance Written Policies, Procedures and Standards of Conduct U.S. Department of Treasury COVID-19 Coronavirus State and Local Fiscal Recovery Funds Listing #21.027 Year Ended September 30, 2024 Criteria – 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 Condition – The City does not have written policies, procedures and standards of conduct. Cause – The entity has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Questioned Costs – None noted Effect – Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation – We recommend that the Commission prepare written policies, procedures, and standards of conduct to include all the required elements as provided in 2 CFR 200, Subparts D & E of the Uniform Guidance. Management’s Response – The City is evaluating the auditor’s recommendations and will implement the necessary corrective action based on a cost benefit analysis.
Condition: During our audit, we noted the Agency did not comply with the cash management requirements for federal awards. Specifically, the Agency drew down federal funds in advance of immediate cash needs, resulting in excess cash balances being held for extended periods. Criteria: Under 2 CFR Part 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Funds should be drawn down only as needed to meet immediate cash requirements. Cause: The Agency made periodic draws of federal awards without ensuring such draws were for immediate cash needs. Effect: Holding excess federal funds for extended periods can result in non-compliance with federal regulations, and could potentially increase the risk of mismanagement or misuse of funds. Recommendation: We recommend the Agency revise federal award cash draw procedures to ensure compliance with cash management requirements. Such draws should be made solely for immediate cash needs. Management Response: Management agrees with this finding and has begun implementing corrective actions. Such actions include implementing a process whereby federal draws are based on upcoming cash needs rather than periodic draws.
2024-001: CASH MANAGEMENT Type: Considered a significant deficiency in internal control over compliance/immaterial noncompliance Program: ALN 93.788 Opioid STR; grant number H79TI085750 ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (SUD Block Grant); grant number B08TI085813 Criteria: As detailed by 2 CFR 200.305(b), “For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means.” Condition: During testing, it was noted that cash was requested prior to disbursement of funds by a month or more. Cause/Effect: This condition appears to be the result of a misunderstanding of the cash management requirements by management. Questioned Cost: Immaterial Recommendation: We recommend that the CMHSP review its methods to ensure that cash requests are made for expenditures for which disbursement has been made.
2024-001: CASH MANAGEMENT Type: Considered a significant deficiency in internal control over compliance/immaterial noncompliance Program: ALN 93.788 Opioid STR; grant number H79TI085750 ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (SUD Block Grant); grant number B08TI085813 Criteria: As detailed by 2 CFR 200.305(b), “For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means.” Condition: During testing, it was noted that cash was requested prior to disbursement of funds by a month or more. Cause/Effect: This condition appears to be the result of a misunderstanding of the cash management requirements by management. Questioned Cost: Immaterial Recommendation: We recommend that the CMHSP review its methods to ensure that cash requests are made for expenditures for which disbursement has been made.
Item: 2024-001 Assistance Listing Number: 93.243 Program: Substance Abuse and Mental Health Services, Projects of Regional and National Significance Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: N/A Contract Number: 5H79TI082775-02 Award Year: 9/30/2023 – 9/29/2024 Compliance Requirement: Cash Management, Reporting Criteria: Per 2 CFR 200.305, under the reimbursement method, expenditures must be incurred prior to the date of the reimbursement request. The Organization is also responsible for submitting an annual Federal Financial Report (“FFR” or SF-425) to the U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration. Condition: The Organization erroneously included a duplicate request for reimbursement in a monthly reimbursement request report submitted to the granting agency and was overpaid by the amount of this duplicate request for reimbursement totaling $41,042. Additionally, the total expenditures reported in the FFR/SF-425 were misstated by $23,058. Questioned Costs: $41,042 Context: In our testing of the annual FFR/SF-425, we noted that the total expenditures reported did not agree to the expenditures reported on the Schedule of Expenditures of Federal Awards by $23,058. Upon further investigation and review of each monthly request for reimbursement submitted for fiscal 2024, we noted a duplicate reimbursement request totaling $41,042. Additionally, we noted that $17,984 representing an expense accrual at September 30, 2024, while properly reflected on the Schedule of Expenditures of Federal Awards, was not properly included in the detail of expenditures noted in the FFR/SF-425 for fiscal 2024. As a result, the FFR/SF-425 misreported expenditures by $23,058, the net of the two errors noted above. Effect: The duplicate federal draw request resulted in a duplicate payment from the grantor. Thus, the Organization has drawn federal funds in excess of the federal expenditures incurred totaling $41,042, which is reported as a questioned cost as the overpayment is due back to the granting agency. Additionally, the expenditures reported on the FFR/SF-425 for fiscal 2024 were misstated by $23,058. This is deemed to be a material weakness in internal control over compliance. Cause: Review and approval controls of the monthly reimbursement request and the annual FFR/SF-425 report were not operating effectively. Identification as a Repeat Finding: Not a repeat finding Recommendation: The Organization should ensure monthly requests for reimbursement and reviewed and approved prior to submission. Additionally, the annual FFR/SF-425 should be reviewed and reconciled to the monthly draws. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
Reportable Finding Considered a Material Weakness – Lack of Supporting Documentation for Cash Draws Program Name: Innovative Approaches to Literacy; Full-Service Community Schools; and Promise Neighborhood Assistance listing #: 84.215K Program year: 2024 Federal Awarding Agency: Department of Education Compliance requirement: Cash Management Criteria: According to 2 CFR 200.305(b)(4) – If the recipient or subrecipient cannot meet the criteria for advance payments, an advance payment for an initial period may be made, however, after that, the Federal agency or pass-through entity must reimburse the recipient or subrecipient for its actual cash disbursements. In addition, per 2 CFR 200.305(b)(9), the recipient or subrecipient must be able to account for all Federal funds received, obligated, and expended. Condition: During our testing of cash draws, it was noted that the reimbursement requests submitted for this award were not based on actual cash disbursements, lacked adequate documentation with no internal support retained that showed internal review and approval for the cash draws. Cause: Policies and internal controls over draw requests were not in place during the year, due in part to turnover in the positions that were in charge of approvals. Effect: The requests for reimbursement were not in line with actual expenses incurred during the draw period. Questioned costs: There are no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Recommendation: We recommend that the Organization update their policies and procedures surrounding cash management to ensure that funds are drawn on a reimbursement basis, supported by actual expenditures incurred. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
Finding 2024-001 Significant deficiency in internal controls over compliance and instances of noncompliance with cash management for subrecipients. Federal Agency: National Science Foundation Assistance Listing Number: 47.050 Assistance Listing Name: Geosciences Award Number: 2208081 Award Year: October 1, 2023 through September 30, 2024 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards section 200.305(b)(3) requires that when the reimbursement method is used, the pass-through entity must make payment within 30-calendar days after receipt of the payment request unless the pass-through entity reasonably believes the request to be improper. Condition/Context for Evaluation During our testing, we noted that the Institute paid three subrecipient invoices beyond the 30-calendar day standard. The sample size was six selections. These subrecipients were under the reimbursement method for payment. Cause The Institute does not have an adequate system of internal control to ensure payments to subrecipients are disbursed within 30-calendar days after receiving the subrecipient’s request for reimbursement. Effect or Potential Effect The Institute is not in compliance with the requirements of 2 CFR section 200.305(b)(3). Payments to subrecipients were not made timely and exceed the 30-calendar day standard. Questioned Costs Not applicable. Repeat Finding This is not a repeat finding. Recommendation We recommend management update its system of internal controls to add processes in place that ensure payments to subrecipients are paid within 30 days after receipt of reimbursement request from the subrecipient. Views of Responsible Officials and Correct Action Management concurs with the finding and has provided the accompanying corrective action plan.
Finding 2024-001 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 $8,470,564 at September 30, 2024. The unearned revenues were $8,727,660 which resulted in a shortfall of $257,096. The unearned revenue for the CSLFRF Program (ARPA Special Revenue Fund) was $269,930. 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: $257,096, which is the shortfall between cash and cash equivalent balance and the unearned revenue balance. Repeat Finding: This is a repeat of Finding 2023-001, 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.
Finding 2024-001: Significant Deficiency and known questioned costs related to activities allowed or unallowed and allowable costs/cost principles Major Program: HOME Investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Assistant Listing Number: 14.239 Criteria: The City is responsible for ensuring compliance with all applicable provisions of the HOME Investment Partnerships Program (HOME) as prescribed by the U.S. Department of Housing and Urban Development. According to requirements included in the OMB Compliance Supplement, all HOME Funds may be used by participating jurisdictions to provide for: (a) incentives to develop and support affordable rental housing and homeownership affordability through the acquisition, new construction, reconstruction, or rehabilitation of non-luxury housing with suitable amenities, including real property acquisition, site improvements, conversion, demolition, and other expenses, including financing costs, relocation expenses of any displaced persons, families, businesses, or organizations; (b) tenant-based rental assistance, including security deposits; (c) the payment of reasonable administrative and planning costs; and (d) the payment of operating expenses of Community Housing Development Organizations (CHDOs). The housing must be permanent or transitional. The acquisition of vacant land or demolition can only be undertaken with respect to a particular housing project intended to provide affordable housing, and when construction is expected to begin within 12 months. Conversion of an existing structure to affordable housing is rehabilitation unless certain circumstances exist. Manufactured housing may be purchased or rehabilitated and the land upon which it is built may be purchased with HOME funds. HOME funds may be used to pay for development construction hard costs, refinancing costs, acquisition costs, related soft costs, CHDO costs, relocation costs, and costs related to the repayment of loans (24 CFR sections 92.205(a) and 92.206).” 2 CFR 200.516(a)(3) requires an audit finding to be reported for known questioned costs that are greater than $25,000 for a type of compliance requirement for a major program. Condition and Context: During testing of HOME activities allowed or unallowed and allowable costs/cost principles (AB) compliance requirements, it was noted that one (1) out of thirty-nine (39) disbursement transactions reviewed did not meet the AB compliance requirements. 2 CFR 200.305(b)(8) states that “a payment must not be made to a recipient or subrecipient for amounts that the recipient or subrecipient withholds from contractors to assure satisfactory completion of work. Payment must be made when the recipient or subrecipient disburses the withheld funds to the contractors or to escrow accounts established to ensure satisfactory completion of work.” The City requested reimbursement for retainage amounts that were not released as of September 30, 2024. Cause: The City had turnover in the project manager department related to HOME construction projects. The project manager turnover caused a miscommunication between the project managers and grant accounting employees which resulted in the request for reimbursement of retainage that had not yet been paid by the City. Effect or Potential Effect: The City received grant reimbursements related to expenditures that were not paid as of September 30, 2025. Known Questioned Costs: $112,539 from October 1st, 2023 through September 30th, 2024. These are for all projects that retainage was requested for reimbursement but the retainage was not released as of September 30, 2024. Repeat Finding: No Recommendation: We recommend the City continue to train its employees to on allowable activities and costs related to the HOME grant. View of Responsible Officials: See Corrective Action Plan on page 10
No written procedures for advance receipt of federal award payments Assistance Listing Number: 21.027 Program Title: Coronavirus State and Local Fiscal Recovery Funds Pass-through Entity: Alabama Department of Environmental Management Contract Number and Year: FS-10269-02 and CS010896-01 2023 Finding Type: Significant Deficiency Known Questioned Costs: None Criteria – 2 CFR Section 200.303(a) requires nonfederal entities receiving federal awards to establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR 200.305 Federal Payment requires nonfederal entities to establish written procedures to implement the requirements of cash management of federal funding. Condition – The Organization received federal funds prior to paying contractors and had no written procedures in place for appropriately handling those funds. Cause – The Organization has not developed or implemented written procedures for appropriately handling advance federal funds. Effect – Possible noncompliance with requirements of the program. Recommendation – The Organization should develop, implement and comply with written procedures to meet the requirements of 2 CFR Section 200.303(a) and 2 CFR 200.305 Federal Payment. Views of responsible officials – The Mayor has implemented policies to no longer hold contractor invoices until ARPA funding is received but will follow the reimbursement guidelines per the grant agreements.
No written procedures for advance receipt of federal award payments Assistance Listing Number: 21.027 Program Title: Coronavirus State and Local Fiscal Recovery Funds Pass-through Entity: Alabama Department of Environmental Management Contract Number and Year: FS-10269-02 and CS010896-01 2023 Finding Type: Significant Deficiency Known Questioned Costs: None Criteria – 2 CFR Section 200.303(a) requires nonfederal entities receiving federal awards to establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR 200.305 Federal Payment requires nonfederal entities to establish written procedures to implement the requirements of cash management of federal funding. Condition – The Organization received federal funds prior to paying contractors and had no written procedures in place for appropriately handling those funds. Cause – The Organization has not developed or implemented written procedures for appropriately handling advance federal funds. Effect – Possible noncompliance with requirements of the program. Recommendation – The Organization should develop, implement and comply with written procedures to meet the requirements of 2 CFR Section 200.303(a) and 2 CFR 200.305 Federal Payment. Views of responsible officials – The Mayor has implemented policies to no longer hold contractor invoices until ARPA funding is received but will follow the reimbursement guidelines per the grant agreements.
Housing Voucher Cluster Condition: During the audit of the Authority, it was noted that federal funds were inappropriately loaned to affiliated entities without proper authorization or adherence to federal cash management requirements. Specifically, the entity disbursed $43,533 in federal funds to the Housing Authority of Florence under the guise of a temporary loan, which was not supported by a formal agreement, lacked board approval, and was not repaid within the fiscal year. Criteria: According to 2 CFR §200.305(b), non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds. The OMB Compliance Supplement further clarifies that program costs must be paid by non-federal entity funds before submitting a payment request, and that advance payments must be limited to immediate cash needs. Cause: The entity lacked adequate internal controls to prevent the unauthorized use of federal funds for non-programmatic purposes. There was no formal cash management policy in place to govern inter-entity transactions or to ensure compliance with federal requirements. Effect: The use of federal funds as a loan to an affiliate exposed the entity to potential noncompliance with federal regulations, risked the misappropriation of funds, and may result in questioned costs subject to repayment. Questioned Costs: $43,533Recommendation: We recommend that the entity immediately cease the practice of loaning federal funds to affiliates, implement a formal cash management policy that includes controls over disbursements and inter-entity transactions and rain finance personnel on federal cash management requirements. Management Response: Today’s Marlboro County Housing Authority management concurs with the auditor’s finding that federal funds were disbursed to an affiliated entity without proper authorization, documentation, or compliance with federal cash management requirements. The Authority acknowledges that this disbursement represented a lapse in internal controls and was not consistent with the requirements outlined in 2 CFR §200.305(b). During the fiscal year ended September 30, 2024, the Authority also had a payable to the same affiliate in its Public Housing Program totaling $37,658. During the current 2024-2025 fiscal year, the Authority reimbursed its HCV program the amount loaned from its HCV program by the funds owed to the affiliate in its Public Housing Program. Today’s Marlboro County Housing Authority currently has an amount of $2,015 due to its affiliate as of May 31, 2025.
Assistance Listing, Federal Agency, and Program Name 97.039, Hazard Mitigation Grant Program Federal Award Identification Number and Year 4394-31, 2024 Pass through Entity South Carolina Emergency Management Division Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR section 200.302(b)(6), all non federal entities must establish written procedures to implement the cash management requirements of 2 CFR section 200.305. Condition The Organization did not have a formal cash management policy in place for the period under audit. Questioned Costs None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context After discussion with management, it was identified that the organization does not maintain a formal cash management policy. Cause and Effect There is not an established control to ensure that a written policy is in place. Because there is no written policy, the Organization is not in compliance with 2 CFR 200.302(b)(6). Recommendation We recommend that the Organization implement a formal cash management policy and that controls are implemented to ensure that it is maintained and updated, as necessary. Views of Responsible Officials and Planned Corrective Actions The Organization implemented a Federal Awards Administration Policy which includes a formal cash management policy in February 2025.
Finding Number: 2024-029 Prior Year Finding Number: N/A Compliance Requirement: Cash Management Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. When entities are funded on a reimbursement basis, program costs must be incurred prior to the date of the reimbursement request (2 CFR Section 200.305(b)(3)). US Department of the Treasury (Treasury) 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.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Condition – During our testing of individual draws of federal funds, we noted that for one (1) sample selected and tested, the review of drawdown was made after it has been requested. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. The sample drawdown, which is related to expenditures incurred during fiscal year 2024, was requested on December 24, 2024 but the review of the drawdown request did not happen until January 28, 2025. The total drawdown selected for testing amounted to $19,381,854. Effect – DBH is not in compliance with cash management requirements. Failure to timely review cash draw requests could result in cash draws that do not accurately reflect eligible program costs. Cause – DBH did not appear to adhere to internal control procedures to ensure the timely review of cash draws. Recommendation – We recommend DBH evaluate its existing cash management control procedures and ensure all federal draw requests are reviewed timely. We also recommend DBH establish procedures to periodically monitor its compliance with the cash management requirements and initiate necessary actions to resolve any noncompliance that results. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Unsupported MTW Capital Fund Program (CFP) Drawdowns Funds (ALN 14.881) Condition: During testing of the Moving to Work Demonstration Program - Capital Fund Program, we selected a sample of eight eLOCCS drawdown vouchers for review. Of these, the Authority was unable to provide sufficient supporting documentation to substantiate the eligibility, timing, or purpose of the drawdowns for two vouchers. In addition, for one voucher, the Authority did not provide evidence of immediate obligations or expenditures to support the drawdown, indicating a potential violation of the federal “just-in-time” funding requirement. Criteria: Under 2 CFR §200.302(b)(3) and §200.305(b), non-Federal entities must maintain adequate documentation to support all federal fund drawdowns and ensure that funds are drawn only when needed for immediate disbursement. Additionally, under the Moving to Work Demonstration Program (ALN 14.881), participating agencies must adhere to the terms of their HUD-approved MTW Agreement, which incorporates applicable requirements of the Uniform Guidance, including principles of financial management and internal control. MTW agencies must ensure that drawdowns are supported by actual, timely obligations and expenditures, and must maintain records sufficient to permit the tracing of funds to a level that ensures proper use in accordance with MTW statutory purposes and HUD requirements. Cause: The Authority lacked sufficient internal controls to ensure that drawdowns were properly documented at the time of request and reimbursement requests aligned with immediate, allowable expenditures. Effect: The drawdowns associated with the two unsupported vouchers are considered potentially unallowable, and the improperly timed drawdown may be noncompliant with federal cash management standards, increasing the risk of recapture, repayment, or audit findings. Questioned Costs: $1,501,783 Recommendation: The Authority should establish or strengthen internal procedures to ensure all drawdown requests are tied to documented and eligible obligations and align with HUD’s “just-in-time” funding policy. Additionally, the Authority should train staff on federal documentation and cash management requirements under 2 CFR Part 200 and HUD guidance. Reply and Corrective Action Plan: To address documentation gaps and timing issues in MTW Capital Fund drawdowns, the Authority will implement a process requiring that all drawdown requests be accompanied by complete supporting documentation. Each request will be reviewed for eligibility and compliance with “just-in-time” funding requirements prior to approval by the Executive Director.
Incomplete Support for Capital Fund Program (CFP) Drawdown Sample (ALN 14.872) Condition: As part of the testing of the Capital Fund Program (CFP) major program, a sample of six drawdown vouchers was selected for review. The Public Housing Authority (Authority) was unable to provide adequate supporting documentation for one voucher in the sample. The missing documentation prevented verification of the eligibility, timing, and allowability of the associated expenditures. Criteria: Under 2 CFR §200.302(b)(3) and §200.305(b), recipients of federal awards must maintain financial records that identify the source and application of federal funds and ensure that all drawdowns are based on actual, allowable, and allocable costs. HUD also requires that all drawdown activity be supported by sufficient records to allow for audit and monitoring review. Cause: The Authority did not have sufficient internal controls or procedures in place to ensure complete documentation was retained and made available for all drawdowns under the CFP program. Effect: The unsupported drawdown identified in the sample raises concerns about the reliability of the Authority’s internal controls over the Capital Fund Program (CFP) drawdown process, may indicate a broader risk of noncompliance affecting the allowability of other drawdowns, and increases the risk of repayment, audit findings, and potential program sanctions due to inadequate supporting documentation. Questioned Costs: $299,305 Recommendation: The Authority should strengthen internal control procedures to ensure all Capital Fund Program (CFP) drawdowns are fully supported and audit-ready, and provide staff training on federal documentation and record retention requirements under 2 CFR Part 200 and applicable HUD guidance. Reply and Corrective Action Plan: The Authority will implement a process to ensure that all Capital Fund Program drawdown requests are supported by documentation that verifies eligibility, timing, and allowability. This includes a review step to confirm completeness before submission.