Criteria or specific requirement (including statutory, regulatory, or other citation) - The Code of Federal Regulations (CFR) Title 2, part 200.305(b)(3) states that non-federal entities must disburse funds for program purposes before requesting payment from the federal awarding agency or pass-through entity. Condition - The District does not have internal controls in place to prevent expenditure reports being submitted that include expenditures that have not been spent or committed or obligated. Questioned Costs - None. Context - The District did not implement adequate internal controls to ensure expenditure reports include only expenditures that have been spent or committed or obligated. Effect - The District may receive grant disbursements prior to having the expenditure to support the request for disbursement. Cause - Due to the District's understanding that the construction in progress would be completed prior to year end and the expenditures would be incurred. Recommendation - The District should implement internal controls the verify all expenditure reports include only amounts expended, committed, or obligated. Managment's response - There is no disagreement. The District will implement internal controls to ensure expenditure reports are being submitted accurately.
Criteria or specific requirement (including statutory, regulatory, or other citation) - The Code of Federal Regulations (CFR) Title 2, part 200.305(b)(3) states that non-federal entities must disburse funds for program purposes before requesting payment from the federal awarding agency or pass-through entity. Condition - The District's expenditure report filed for June 30, 2023 included expenditures in the amount of $171,918 that were not disbursed as of June 30, 2023. These amounts were not reported as committed or obligated on the June 30, 2023 expenditure report. Questioned Costs - None. Context - The District received federal reimbursement before expenditures were disbursed. Effect - The June 30, 2023 expenditure report was filed overstating expenditures by $171,918. Cause - Grant expenditures reported on the final June 30, 2023 expenditure report included $171,918 of expenditures that were not paid by the District until the next fiscal year. The expenditures were liquidated within 90 days of June 30, 2023. Recommendation - Grant expenditure reports should only include expenditures that have been paid. Grant obligations should be reported on separately on the expenditure report. The liquidation of the obligations should be reported on subsequent liquidation reports. Managment's Response - There is no disagreement with this finding and management will monitor all future federal reimbursement requests. Committed or obligated expenditures will be reported appropriately. Additionally, the grant expenditures in question were liquidated within 90 days of the fiscal year end.
Criteria or specific requirement (including statutory, regulatory, or other citation) - The Code of Federal Regulations (CFR) Title 2, part 200.305(b)(3) states that non-federal entities must disburse funds for program purposes before requesting payment from the federal awarding agency or pass-through entity. Condition - The District's expenditure report filed for June 30, 2023 included expenditures in the amount of $171,918 that were not disbursed as of June 30, 2023. These amounts were not reported as committed or obligated on the June 30, 2023 expenditure report. Questioned Costs - None. Context - The District received federal reimbursement before expenditures were disbursed. Effect - The June 30, 2023 expenditure report was filed overstating expenditures by $171,918. Cause - Grant expenditures reported on the final June 30, 2023 expenditure report included $171,918 of expenditures that were not paid by the District until the next fiscal year. The expenditures were liquidated within 90 days of June 30, 2023. Recommendation - Grant expenditure reports should only include expenditures that have been paid. Grant obligations should be reported on separately on the expenditure report. The liquidation of the obligations should be reported on subsequent liquidation reports. Managment's Response - There is no disagreement with this finding and management will monitor all future federal reimbursement requests. Committed or obligated expenditures will be reported appropriately. Additionally, the grant expenditures in question were liquidated within 90 days of the fiscal year end.
Criteria or specific requirement (including statutory, regulatory, or other citation) - The Code of Federal Regulations (CFR) Title 2, part 200.305(b)(3) states that non-federal entities must disburse funds for program purposes before requesting payment from the federal awarding agency or pass-through entity. Condition - The District's expenditure report filed for June 30, 2023 included expenditures in the amount of $171,918 that were not disbursed as of June 30, 2023. These amounts were not reported as committed or obligated on the June 30, 2023 expenditure report. Questioned Costs - None. Context - The District received federal reimbursement before expenditures were disbursed. Effect - The June 30, 2023 expenditure report was filed overstating expenditures by $171,918. Cause - Grant expenditures reported on the final June 30, 2023 expenditure report included $171,918 of expenditures that were not paid by the District until the next fiscal year. The expenditures were liquidated within 90 days of June 30, 2023. Recommendation - Grant expenditure reports should only include expenditures that have been paid. Grant obligations should be reported on separately on the expenditure report. The liquidation of the obligations should be reported on subsequent liquidation reports. Managment's Response - There is no disagreement with this finding and management will monitor all future federal reimbursement requests. Committed or obligated expenditures will be reported appropriately. Additionally, the grant expenditures in question were liquidated within 90 days of the fiscal year end.
Assistance Listing, Federal Agency, and Program Name - Research and Development Cluster, 47.076, National Science Foundation, Education and Human Resources Federal Award Identification Number and Year - 1841783 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition - Out of 20 payments to subrecipients that were tested, 3 were made after the 30 calendar day requirement. Questioned Costs - None Identification of How Questioned Costs Were Computed - The issue identified was related solely to timeliness of payments. Context - In all samples tested, payment was made to the subrecipient; however, the delayed payments on 3 samples ranged from 37 - 71 days between the invoice being received by the University and payment being made to the subrecipient. Cause and Effect - The University does have formal general accounts payable and cash disbursement processes in place; however, there are no specific controls in place to ensure that subrecipients are paid within the 30-day requirement. Although all of the payments were ultimately made, the lack of controls resulted in several late payments. Recommendation - The University should implement a control to ensure that payments are made within the required time frame. Views of Responsible Officials and Corrective Action Plan - Management agrees. The University has established subrecipient monitoring procedures. Included in those procedures is the control to monitor the 30 day payment requirement. 2 of the payments were during the major service disruption of the entire university network. We have now implemented weekly backups to the network folders that contain our subrecipient monitoring files. 1 of the payments was due to the department not sending us the invoice timely. We plan to do follow up trainings to educate departments and PIs on the requirement for providing payment within 30 days of receipt of invoice to assure payment is made within the 30 day requirement.
Federal Agencies: U.S. Department of Energy; U.S. Health and Human Services; and U.S. Department of State Program Names: Research and Development Cluster; Professional and Cultural Exchange Program ALN #s: 81.086, 81.049, 93.859, 19.415 Award Numbers: DE-EE0009418, DE-SC0021123, RGM129216B, SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-005. Finding: Cash Management – Timeliness of Subrecipient Payments Northern Illinois University (the University) did not make certain subrecipient payments timely under the Research and Development Cluster and the Professional and Cultural Exchange Program. Out of 31 subrecipient payments tested which were made by the University under the Research and Development Cluster, 11 payments (35%) were not made within 30 days after receipt of the billing from the subrecipient. Payments to the subrecipients were made 35-166 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Out of two subrecipient payments tested which were made by the University under the Professional and Cultural Exchange Program, one payment (50%) was not made within 30 days after receipt of the billing from the subrecipient. Payment to the subrecipient was made 31 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. The University officials stated the payment delays were due to the additional steps required to obtain the Principal Investigator review and approval to ensure payments are proper. Additionally, payments due at the end of the calendar year were further delayed due to University closure, holidays, and regular business schedules. Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-005) Recommendation: We recommend the University review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will review its current processes, policies and procedures to minimize the time between the transfer of federal funds to the subrecipient.
Federal Agencies: U.S. Department of Energy; U.S. Health and Human Services; and U.S. Department of State Program Names: Research and Development Cluster; Professional and Cultural Exchange Program ALN #s: 81.086, 81.049, 93.859, 19.415 Award Numbers: DE-EE0009418, DE-SC0021123, RGM129216B, SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-005. Finding: Cash Management – Timeliness of Subrecipient Payments Northern Illinois University (the University) did not make certain subrecipient payments timely under the Research and Development Cluster and the Professional and Cultural Exchange Program. Out of 31 subrecipient payments tested which were made by the University under the Research and Development Cluster, 11 payments (35%) were not made within 30 days after receipt of the billing from the subrecipient. Payments to the subrecipients were made 35-166 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Out of two subrecipient payments tested which were made by the University under the Professional and Cultural Exchange Program, one payment (50%) was not made within 30 days after receipt of the billing from the subrecipient. Payment to the subrecipient was made 31 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. The University officials stated the payment delays were due to the additional steps required to obtain the Principal Investigator review and approval to ensure payments are proper. Additionally, payments due at the end of the calendar year were further delayed due to University closure, holidays, and regular business schedules. Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-005) Recommendation: We recommend the University review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will review its current processes, policies and procedures to minimize the time between the transfer of federal funds to the subrecipient.
Federal Agencies: U.S. Department of Energy; U.S. Health and Human Services; and U.S. Department of State Program Names: Research and Development Cluster; Professional and Cultural Exchange Program ALN #s: 81.086, 81.049, 93.859, 19.415 Award Numbers: DE-EE0009418, DE-SC0021123, RGM129216B, SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-005. Finding: Cash Management – Timeliness of Subrecipient Payments Northern Illinois University (the University) did not make certain subrecipient payments timely under the Research and Development Cluster and the Professional and Cultural Exchange Program. Out of 31 subrecipient payments tested which were made by the University under the Research and Development Cluster, 11 payments (35%) were not made within 30 days after receipt of the billing from the subrecipient. Payments to the subrecipients were made 35-166 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Out of two subrecipient payments tested which were made by the University under the Professional and Cultural Exchange Program, one payment (50%) was not made within 30 days after receipt of the billing from the subrecipient. Payment to the subrecipient was made 31 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. The University officials stated the payment delays were due to the additional steps required to obtain the Principal Investigator review and approval to ensure payments are proper. Additionally, payments due at the end of the calendar year were further delayed due to University closure, holidays, and regular business schedules. Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-005) Recommendation: We recommend the University review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will review its current processes, policies and procedures to minimize the time between the transfer of federal funds to the subrecipient.
Federal Agencies: U.S. Department of Energy; U.S. Health and Human Services; and U.S. Department of State Program Names: Research and Development Cluster; Professional and Cultural Exchange Program ALN #s: 81.086, 81.049, 93.859, 19.415 Award Numbers: DE-EE0009418, DE-SC0021123, RGM129216B, SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-005. Finding: Cash Management – Timeliness of Subrecipient Payments Northern Illinois University (the University) did not make certain subrecipient payments timely under the Research and Development Cluster and the Professional and Cultural Exchange Program. Out of 31 subrecipient payments tested which were made by the University under the Research and Development Cluster, 11 payments (35%) were not made within 30 days after receipt of the billing from the subrecipient. Payments to the subrecipients were made 35-166 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Out of two subrecipient payments tested which were made by the University under the Professional and Cultural Exchange Program, one payment (50%) was not made within 30 days after receipt of the billing from the subrecipient. Payment to the subrecipient was made 31 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. The University officials stated the payment delays were due to the additional steps required to obtain the Principal Investigator review and approval to ensure payments are proper. Additionally, payments due at the end of the calendar year were further delayed due to University closure, holidays, and regular business schedules. Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-005) Recommendation: We recommend the University review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will review its current processes, policies and procedures to minimize the time between the transfer of federal funds to the subrecipient.
Inadequate Maintenance of Records Supporting Cash Management Process Assistance Listing: 84.042, 84.044 and 84.047 Program Title: TRIO Cluster Federal Agency: Department of Education Criteria 2 CFR §200.305(b) states that “For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance of redemption of checks, warrants, or payments by other means.” Condition The College receives funding on the reimbursement method. However, for 10 out of 40 expenses sampled (1 for Student Support Services, 4 for Talent Search and 5 for Upward), we were unable to obtain information indicating when the expenses were submitted for reimbursement and therefore could not determine that the payments were made prior to reimbursement. In addition, for 2 out of 9 reimbursement requests tested (one for Upword Bound and one for Student Support Services) the College could not provide detail as to what expenses made up the requests. The two requests totaled $112,527 and the total requests tested totaled $282,815. Effect As a result of the lack of an audit trail, we were unable to determine compliance with cash management requirements for some expenses. Cause All exceptions occurred during the first half of the year prior to the hiring of a new Manager of Account Services. Recommendation We recommend that the College develop procedures to ensure that documentation supporting cash drawdowns is maintained and that all disbursements are included in a request for reimbursement. Management’s Response There are 10 audit findings total in calendar year 2022 and all are connected to a former staff person. In January 2023, we hired a new Manager of Account Services who immediately implemented new procedures and prepared the appropriate level of detail backup information for the TRIO reimbursements. Each reimbursement was also signed by the Controller, who verified the information and transactions before any funds were transferred. This process currently complies with cash management requirements.
Inadequate Maintenance of Records Supporting Cash Management Process Assistance Listing: 84.042, 84.044 and 84.047 Program Title: TRIO Cluster Federal Agency: Department of Education Criteria 2 CFR §200.305(b) states that “For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance of redemption of checks, warrants, or payments by other means.” Condition The College receives funding on the reimbursement method. However, for 10 out of 40 expenses sampled (1 for Student Support Services, 4 for Talent Search and 5 for Upward), we were unable to obtain information indicating when the expenses were submitted for reimbursement and therefore could not determine that the payments were made prior to reimbursement. In addition, for 2 out of 9 reimbursement requests tested (one for Upword Bound and one for Student Support Services) the College could not provide detail as to what expenses made up the requests. The two requests totaled $112,527 and the total requests tested totaled $282,815. Effect As a result of the lack of an audit trail, we were unable to determine compliance with cash management requirements for some expenses. Cause All exceptions occurred during the first half of the year prior to the hiring of a new Manager of Account Services. Recommendation We recommend that the College develop procedures to ensure that documentation supporting cash drawdowns is maintained and that all disbursements are included in a request for reimbursement. Management’s Response There are 10 audit findings total in calendar year 2022 and all are connected to a former staff person. In January 2023, we hired a new Manager of Account Services who immediately implemented new procedures and prepared the appropriate level of detail backup information for the TRIO reimbursements. Each reimbursement was also signed by the Controller, who verified the information and transactions before any funds were transferred. This process currently complies with cash management requirements.
Inadequate Maintenance of Records Supporting Cash Management Process Assistance Listing: 84.042, 84.044 and 84.047 Program Title: TRIO Cluster Federal Agency: Department of Education Criteria 2 CFR §200.305(b) states that “For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance of redemption of checks, warrants, or payments by other means.” Condition The College receives funding on the reimbursement method. However, for 10 out of 40 expenses sampled (1 for Student Support Services, 4 for Talent Search and 5 for Upward), we were unable to obtain information indicating when the expenses were submitted for reimbursement and therefore could not determine that the payments were made prior to reimbursement. In addition, for 2 out of 9 reimbursement requests tested (one for Upword Bound and one for Student Support Services) the College could not provide detail as to what expenses made up the requests. The two requests totaled $112,527 and the total requests tested totaled $282,815. Effect As a result of the lack of an audit trail, we were unable to determine compliance with cash management requirements for some expenses. Cause All exceptions occurred during the first half of the year prior to the hiring of a new Manager of Account Services. Recommendation We recommend that the College develop procedures to ensure that documentation supporting cash drawdowns is maintained and that all disbursements are included in a request for reimbursement. Management’s Response There are 10 audit findings total in calendar year 2022 and all are connected to a former staff person. In January 2023, we hired a new Manager of Account Services who immediately implemented new procedures and prepared the appropriate level of detail backup information for the TRIO reimbursements. Each reimbursement was also signed by the Controller, who verified the information and transactions before any funds were transferred. This process currently complies with cash management requirements.
(2023-077) Title: Internal control over subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Division of Audit Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Immunization Cooperative Agreements (COVID-19) Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 10.557; 93.268; 93.558 Federal Award Identification Number: See E-93 to E-94, E-94 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. Cash management requirements are not applicable for fee-for-service subawards. For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes, and therefore is not in compliance with subrecipient cash management requirements. For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement. As a result, DCM does not have assurance whether payments are for reimbursement or advances. During fiscal year 2023, the Department’s Division of Audit (DOA) performed testing over a sample of payments made to 37 subrecipients deemed high risk by the Department; payments were reviewed for compliance with cash management and allowability requirements. The Office of the State Auditor reviewed DOA’s testing and identified: • eight subrecipients where testing was not completed; therefore, compliance with cash management requirements was not determined. • eight subrecipients where documentation to support cash management testing performed could not be provided. As a result, compliance with subrecipient cash management requirements could not be substantiated. • 13 subrecipients were noted as noncompliant with cash management requirements by DOA; however, corrective action plans have not been established for any of the 13 subrecipients. Therefore, as evidenced above, the Department is not in compliance with subrecipient cash management requirements. Context: In fiscal year 2023, the Department provided: • $31.7 million to subrecipients from TANF grant funds of $91.8 million. TANF’s subawards are either cost-settled, cost-settled by invoice, or fee-for-service. • $6 million to subrecipients from WIC grant funds of $22.4 million. All of WIC’s subawards are cost-settled. • $2.7 million to subrecipients from Immunization Cooperative Agreements grant funds of $24.5 million. Immunization Cooperative Agreement’s subawards are either cost-settled or cost-settled by invoice. Cause: • Lack of adequate subrecipient monitoring procedures • Misinterpretation of Federal regulations Effect: • Noncompliance with subrecipient cash management requirements • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that the Department enhance monitoring procedures to ensure that: • the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for cost-settled subawards. • the payment of Federal funds to the subrecipient is for reimbursement purposes, and not for advance payment, for “cost-settled by invoice” subawards. • corrective action plans are established for subrecipients where noncompliance has been identified. Corrective Action Plan: See F-32 Management’s Response: The Department disagrees with this finding. The Department believes that we are in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement is as close as administratively feasible. The Department’s procedures related to cash management include: reconciling payments to expenditures quarterly and monitoring subrecipient’s audits. The Department’s subrecipients not only are required to have Single Audits but also are required to have audited financial statements and audited Schedule of Expenditures of Department Awards at a lower threshold than that of the Single Audit through the Department’s rule, Maine Uniform Accounting and Auditing Practices for Community Agencies (MAAP). This rule also defines a major program at a much lower threshold than the Uniform Guidance, so far more programs get tested annually than just Single Audits alone. Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075 Auditor’s Concluding Remarks: The subrecipient monitoring procedures outlined in Management’s Response do not ensure that subrecipients are drawing funds in accordance with Federal cash management requirements, as follows: • The Department does not obtain documentation to support the timing of the subrecipient’s expenditures reported on the quarterly expense reports and to substantiate compliance. • Though reviewing the subrecipient’s MAAP audits and Single Audits for findings is beneficial: o monitoring procedures must be performed during the award period; however, MAAP and Single Audits are completed towards the end or after the grant award period. o MAAP audit requirements do not require testing of all subawards. Therefore, the subrecipient’s cash management may or may not be tested by the subrecipient’s auditor. o it is not guaranteed that cash management will be selected for testing by the subrecipient’s auditor; therefore, relying on the subrecipient’s auditor to discover cash management issues is not an adequate procedure to monitor the subrecipient’s compliance with that requirement. Additionally, Management’s Response does not address specific issues identified by OSA cited in the Condition above. Therefore, the Department was noncompliant with Federal regulation 2 CFR 200.305 that requires monitoring cash drawdowns of subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual cash disbursement for program purposes is minimized. The finding remains as stated. (State Number: 23-1111-04)
(2023-077) Title: Internal control over subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Division of Audit Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Immunization Cooperative Agreements (COVID-19) Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 10.557; 93.268; 93.558 Federal Award Identification Number: See E-93 to E-94, E-94 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. Cash management requirements are not applicable for fee-for-service subawards. For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes, and therefore is not in compliance with subrecipient cash management requirements. For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement. As a result, DCM does not have assurance whether payments are for reimbursement or advances. During fiscal year 2023, the Department’s Division of Audit (DOA) performed testing over a sample of payments made to 37 subrecipients deemed high risk by the Department; payments were reviewed for compliance with cash management and allowability requirements. The Office of the State Auditor reviewed DOA’s testing and identified: • eight subrecipients where testing was not completed; therefore, compliance with cash management requirements was not determined. • eight subrecipients where documentation to support cash management testing performed could not be provided. As a result, compliance with subrecipient cash management requirements could not be substantiated. • 13 subrecipients were noted as noncompliant with cash management requirements by DOA; however, corrective action plans have not been established for any of the 13 subrecipients. Therefore, as evidenced above, the Department is not in compliance with subrecipient cash management requirements. Context: In fiscal year 2023, the Department provided: • $31.7 million to subrecipients from TANF grant funds of $91.8 million. TANF’s subawards are either cost-settled, cost-settled by invoice, or fee-for-service. • $6 million to subrecipients from WIC grant funds of $22.4 million. All of WIC’s subawards are cost-settled. • $2.7 million to subrecipients from Immunization Cooperative Agreements grant funds of $24.5 million. Immunization Cooperative Agreement’s subawards are either cost-settled or cost-settled by invoice. Cause: • Lack of adequate subrecipient monitoring procedures • Misinterpretation of Federal regulations Effect: • Noncompliance with subrecipient cash management requirements • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that the Department enhance monitoring procedures to ensure that: • the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for cost-settled subawards. • the payment of Federal funds to the subrecipient is for reimbursement purposes, and not for advance payment, for “cost-settled by invoice” subawards. • corrective action plans are established for subrecipients where noncompliance has been identified. Corrective Action Plan: See F-32 Management’s Response: The Department disagrees with this finding. The Department believes that we are in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement is as close as administratively feasible. The Department’s procedures related to cash management include: reconciling payments to expenditures quarterly and monitoring subrecipient’s audits. The Department’s subrecipients not only are required to have Single Audits but also are required to have audited financial statements and audited Schedule of Expenditures of Department Awards at a lower threshold than that of the Single Audit through the Department’s rule, Maine Uniform Accounting and Auditing Practices for Community Agencies (MAAP). This rule also defines a major program at a much lower threshold than the Uniform Guidance, so far more programs get tested annually than just Single Audits alone. Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075 Auditor’s Concluding Remarks: The subrecipient monitoring procedures outlined in Management’s Response do not ensure that subrecipients are drawing funds in accordance with Federal cash management requirements, as follows: • The Department does not obtain documentation to support the timing of the subrecipient’s expenditures reported on the quarterly expense reports and to substantiate compliance. • Though reviewing the subrecipient’s MAAP audits and Single Audits for findings is beneficial: o monitoring procedures must be performed during the award period; however, MAAP and Single Audits are completed towards the end or after the grant award period. o MAAP audit requirements do not require testing of all subawards. Therefore, the subrecipient’s cash management may or may not be tested by the subrecipient’s auditor. o it is not guaranteed that cash management will be selected for testing by the subrecipient’s auditor; therefore, relying on the subrecipient’s auditor to discover cash management issues is not an adequate procedure to monitor the subrecipient’s compliance with that requirement. Additionally, Management’s Response does not address specific issues identified by OSA cited in the Condition above. Therefore, the Department was noncompliant with Federal regulation 2 CFR 200.305 that requires monitoring cash drawdowns of subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual cash disbursement for program purposes is minimized. The finding remains as stated. (State Number: 23-1111-04)
(2023-077) Title: Internal control over subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Division of Audit Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Immunization Cooperative Agreements (COVID-19) Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 10.557; 93.268; 93.558 Federal Award Identification Number: See E-93 to E-94, E-94 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. Cash management requirements are not applicable for fee-for-service subawards. For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes, and therefore is not in compliance with subrecipient cash management requirements. For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement. As a result, DCM does not have assurance whether payments are for reimbursement or advances. During fiscal year 2023, the Department’s Division of Audit (DOA) performed testing over a sample of payments made to 37 subrecipients deemed high risk by the Department; payments were reviewed for compliance with cash management and allowability requirements. The Office of the State Auditor reviewed DOA’s testing and identified: • eight subrecipients where testing was not completed; therefore, compliance with cash management requirements was not determined. • eight subrecipients where documentation to support cash management testing performed could not be provided. As a result, compliance with subrecipient cash management requirements could not be substantiated. • 13 subrecipients were noted as noncompliant with cash management requirements by DOA; however, corrective action plans have not been established for any of the 13 subrecipients. Therefore, as evidenced above, the Department is not in compliance with subrecipient cash management requirements. Context: In fiscal year 2023, the Department provided: • $31.7 million to subrecipients from TANF grant funds of $91.8 million. TANF’s subawards are either cost-settled, cost-settled by invoice, or fee-for-service. • $6 million to subrecipients from WIC grant funds of $22.4 million. All of WIC’s subawards are cost-settled. • $2.7 million to subrecipients from Immunization Cooperative Agreements grant funds of $24.5 million. Immunization Cooperative Agreement’s subawards are either cost-settled or cost-settled by invoice. Cause: • Lack of adequate subrecipient monitoring procedures • Misinterpretation of Federal regulations Effect: • Noncompliance with subrecipient cash management requirements • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that the Department enhance monitoring procedures to ensure that: • the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for cost-settled subawards. • the payment of Federal funds to the subrecipient is for reimbursement purposes, and not for advance payment, for “cost-settled by invoice” subawards. • corrective action plans are established for subrecipients where noncompliance has been identified. Corrective Action Plan: See F-32 Management’s Response: The Department disagrees with this finding. The Department believes that we are in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement is as close as administratively feasible. The Department’s procedures related to cash management include: reconciling payments to expenditures quarterly and monitoring subrecipient’s audits. The Department’s subrecipients not only are required to have Single Audits but also are required to have audited financial statements and audited Schedule of Expenditures of Department Awards at a lower threshold than that of the Single Audit through the Department’s rule, Maine Uniform Accounting and Auditing Practices for Community Agencies (MAAP). This rule also defines a major program at a much lower threshold than the Uniform Guidance, so far more programs get tested annually than just Single Audits alone. Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075 Auditor’s Concluding Remarks: The subrecipient monitoring procedures outlined in Management’s Response do not ensure that subrecipients are drawing funds in accordance with Federal cash management requirements, as follows: • The Department does not obtain documentation to support the timing of the subrecipient’s expenditures reported on the quarterly expense reports and to substantiate compliance. • Though reviewing the subrecipient’s MAAP audits and Single Audits for findings is beneficial: o monitoring procedures must be performed during the award period; however, MAAP and Single Audits are completed towards the end or after the grant award period. o MAAP audit requirements do not require testing of all subawards. Therefore, the subrecipient’s cash management may or may not be tested by the subrecipient’s auditor. o it is not guaranteed that cash management will be selected for testing by the subrecipient’s auditor; therefore, relying on the subrecipient’s auditor to discover cash management issues is not an adequate procedure to monitor the subrecipient’s compliance with that requirement. Additionally, Management’s Response does not address specific issues identified by OSA cited in the Condition above. Therefore, the Department was noncompliant with Federal regulation 2 CFR 200.305 that requires monitoring cash drawdowns of subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual cash disbursement for program purposes is minimized. The finding remains as stated. (State Number: 23-1111-04)
(2023-077) Title: Internal control over subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Division of Audit Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Immunization Cooperative Agreements (COVID-19) Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 10.557; 93.268; 93.558 Federal Award Identification Number: See E-93 to E-94, E-94 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. Cash management requirements are not applicable for fee-for-service subawards. For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes, and therefore is not in compliance with subrecipient cash management requirements. For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement. As a result, DCM does not have assurance whether payments are for reimbursement or advances. During fiscal year 2023, the Department’s Division of Audit (DOA) performed testing over a sample of payments made to 37 subrecipients deemed high risk by the Department; payments were reviewed for compliance with cash management and allowability requirements. The Office of the State Auditor reviewed DOA’s testing and identified: • eight subrecipients where testing was not completed; therefore, compliance with cash management requirements was not determined. • eight subrecipients where documentation to support cash management testing performed could not be provided. As a result, compliance with subrecipient cash management requirements could not be substantiated. • 13 subrecipients were noted as noncompliant with cash management requirements by DOA; however, corrective action plans have not been established for any of the 13 subrecipients. Therefore, as evidenced above, the Department is not in compliance with subrecipient cash management requirements. Context: In fiscal year 2023, the Department provided: • $31.7 million to subrecipients from TANF grant funds of $91.8 million. TANF’s subawards are either cost-settled, cost-settled by invoice, or fee-for-service. • $6 million to subrecipients from WIC grant funds of $22.4 million. All of WIC’s subawards are cost-settled. • $2.7 million to subrecipients from Immunization Cooperative Agreements grant funds of $24.5 million. Immunization Cooperative Agreement’s subawards are either cost-settled or cost-settled by invoice. Cause: • Lack of adequate subrecipient monitoring procedures • Misinterpretation of Federal regulations Effect: • Noncompliance with subrecipient cash management requirements • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that the Department enhance monitoring procedures to ensure that: • the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for cost-settled subawards. • the payment of Federal funds to the subrecipient is for reimbursement purposes, and not for advance payment, for “cost-settled by invoice” subawards. • corrective action plans are established for subrecipients where noncompliance has been identified. Corrective Action Plan: See F-32 Management’s Response: The Department disagrees with this finding. The Department believes that we are in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement is as close as administratively feasible. The Department’s procedures related to cash management include: reconciling payments to expenditures quarterly and monitoring subrecipient’s audits. The Department’s subrecipients not only are required to have Single Audits but also are required to have audited financial statements and audited Schedule of Expenditures of Department Awards at a lower threshold than that of the Single Audit through the Department’s rule, Maine Uniform Accounting and Auditing Practices for Community Agencies (MAAP). This rule also defines a major program at a much lower threshold than the Uniform Guidance, so far more programs get tested annually than just Single Audits alone. Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075 Auditor’s Concluding Remarks: The subrecipient monitoring procedures outlined in Management’s Response do not ensure that subrecipients are drawing funds in accordance with Federal cash management requirements, as follows: • The Department does not obtain documentation to support the timing of the subrecipient’s expenditures reported on the quarterly expense reports and to substantiate compliance. • Though reviewing the subrecipient’s MAAP audits and Single Audits for findings is beneficial: o monitoring procedures must be performed during the award period; however, MAAP and Single Audits are completed towards the end or after the grant award period. o MAAP audit requirements do not require testing of all subawards. Therefore, the subrecipient’s cash management may or may not be tested by the subrecipient’s auditor. o it is not guaranteed that cash management will be selected for testing by the subrecipient’s auditor; therefore, relying on the subrecipient’s auditor to discover cash management issues is not an adequate procedure to monitor the subrecipient’s compliance with that requirement. Additionally, Management’s Response does not address specific issues identified by OSA cited in the Condition above. Therefore, the Department was noncompliant with Federal regulation 2 CFR 200.305 that requires monitoring cash drawdowns of subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual cash disbursement for program purposes is minimized. The finding remains as stated. (State Number: 23-1111-04)
(2023-077) Title: Internal control over subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Division of Audit Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Immunization Cooperative Agreements (COVID-19) Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 10.557; 93.268; 93.558 Federal Award Identification Number: See E-93 to E-94, E-94 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. Cash management requirements are not applicable for fee-for-service subawards. For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes, and therefore is not in compliance with subrecipient cash management requirements. For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement. As a result, DCM does not have assurance whether payments are for reimbursement or advances. During fiscal year 2023, the Department’s Division of Audit (DOA) performed testing over a sample of payments made to 37 subrecipients deemed high risk by the Department; payments were reviewed for compliance with cash management and allowability requirements. The Office of the State Auditor reviewed DOA’s testing and identified: • eight subrecipients where testing was not completed; therefore, compliance with cash management requirements was not determined. • eight subrecipients where documentation to support cash management testing performed could not be provided. As a result, compliance with subrecipient cash management requirements could not be substantiated. • 13 subrecipients were noted as noncompliant with cash management requirements by DOA; however, corrective action plans have not been established for any of the 13 subrecipients. Therefore, as evidenced above, the Department is not in compliance with subrecipient cash management requirements. Context: In fiscal year 2023, the Department provided: • $31.7 million to subrecipients from TANF grant funds of $91.8 million. TANF’s subawards are either cost-settled, cost-settled by invoice, or fee-for-service. • $6 million to subrecipients from WIC grant funds of $22.4 million. All of WIC’s subawards are cost-settled. • $2.7 million to subrecipients from Immunization Cooperative Agreements grant funds of $24.5 million. Immunization Cooperative Agreement’s subawards are either cost-settled or cost-settled by invoice. Cause: • Lack of adequate subrecipient monitoring procedures • Misinterpretation of Federal regulations Effect: • Noncompliance with subrecipient cash management requirements • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that the Department enhance monitoring procedures to ensure that: • the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for cost-settled subawards. • the payment of Federal funds to the subrecipient is for reimbursement purposes, and not for advance payment, for “cost-settled by invoice” subawards. • corrective action plans are established for subrecipients where noncompliance has been identified. Corrective Action Plan: See F-32 Management’s Response: The Department disagrees with this finding. The Department believes that we are in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement is as close as administratively feasible. The Department’s procedures related to cash management include: reconciling payments to expenditures quarterly and monitoring subrecipient’s audits. The Department’s subrecipients not only are required to have Single Audits but also are required to have audited financial statements and audited Schedule of Expenditures of Department Awards at a lower threshold than that of the Single Audit through the Department’s rule, Maine Uniform Accounting and Auditing Practices for Community Agencies (MAAP). This rule also defines a major program at a much lower threshold than the Uniform Guidance, so far more programs get tested annually than just Single Audits alone. Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075 Auditor’s Concluding Remarks: The subrecipient monitoring procedures outlined in Management’s Response do not ensure that subrecipients are drawing funds in accordance with Federal cash management requirements, as follows: • The Department does not obtain documentation to support the timing of the subrecipient’s expenditures reported on the quarterly expense reports and to substantiate compliance. • Though reviewing the subrecipient’s MAAP audits and Single Audits for findings is beneficial: o monitoring procedures must be performed during the award period; however, MAAP and Single Audits are completed towards the end or after the grant award period. o MAAP audit requirements do not require testing of all subawards. Therefore, the subrecipient’s cash management may or may not be tested by the subrecipient’s auditor. o it is not guaranteed that cash management will be selected for testing by the subrecipient’s auditor; therefore, relying on the subrecipient’s auditor to discover cash management issues is not an adequate procedure to monitor the subrecipient’s compliance with that requirement. Additionally, Management’s Response does not address specific issues identified by OSA cited in the Condition above. Therefore, the Department was noncompliant with Federal regulation 2 CFR 200.305 that requires monitoring cash drawdowns of subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual cash disbursement for program purposes is minimized. The finding remains as stated. (State Number: 23-1111-04)
Federal Agencies: US Department of Energy (DOE); and US Health and Human Services (HHS Program Names: Research & Development Cluster: Office of Science and Financial Assistance Program; Health Center Program Cluster; and HIV-Related Training and Technical Assistance Program ALN #s: 81.049; 93.224; and 93.145 Award Numbers: DOE DE-SC0018420; and 675 HRSA 5U1OHA29293-07; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-006. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and did not have controls in place to prevent late payments. Out of twelve subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, seven payments (58%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 34-197 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of fourteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster and HIV-Related Training and Technical Assistance Program, three payments (21%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 37-51 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. University of Illinois Urbana-Champaign officials stated continued staffing issues and the multi-layered review and approval process contributed to untimely subrecipient payments. University of Illinois Chicago officials stated the administering unit was delayed in submitting invoices due to competing priorities. Additionally, the central approving offices contributed to the delay in one payment due to fiscal year-end close responsibilities. Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-006; 2022-008) 2023-006. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Energy (DOE); and US Health and Human Services (HHS Program Names: Research & Development Cluster: Office of Science and Financial Assistance Program; Health Center Program Cluster; and HIV-Related Training and Technical Assistance Program ALN #s: 81.049; 93.224; and 93.145 Award Numbers: DOE DE-SC0018420; and 675 HRSA 5U1OHA29293-07; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-006. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and did not have controls in place to prevent late payments. Out of twelve subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, seven payments (58%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 34-197 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of fourteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster and HIV-Related Training and Technical Assistance Program, three payments (21%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 37-51 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. University of Illinois Urbana-Champaign officials stated continued staffing issues and the multi-layered review and approval process contributed to untimely subrecipient payments. University of Illinois Chicago officials stated the administering unit was delayed in submitting invoices due to competing priorities. Additionally, the central approving offices contributed to the delay in one payment due to fiscal year-end close responsibilities. Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-006; 2022-008) 2023-006. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Energy (DOE); and US Health and Human Services (HHS Program Names: Research & Development Cluster: Office of Science and Financial Assistance Program; Health Center Program Cluster; and HIV-Related Training and Technical Assistance Program ALN #s: 81.049; 93.224; and 93.145 Award Numbers: DOE DE-SC0018420; and 675 HRSA 5U1OHA29293-07; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-006. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and did not have controls in place to prevent late payments. Out of twelve subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, seven payments (58%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 34-197 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of fourteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster and HIV-Related Training and Technical Assistance Program, three payments (21%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 37-51 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. University of Illinois Urbana-Champaign officials stated continued staffing issues and the multi-layered review and approval process contributed to untimely subrecipient payments. University of Illinois Chicago officials stated the administering unit was delayed in submitting invoices due to competing priorities. Additionally, the central approving offices contributed to the delay in one payment due to fiscal year-end close responsibilities. Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-006; 2022-008) 2023-006. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
United States Department of the Treasury Reference Number: 2023-007 Program: 21.026 COVID-19 Homeowner Assistance Fund Program Federal Award Number: HAF0034 Type of Finding: Noncompliance; Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Cash Management; Program Income Condition: During audit testing of the HAF program, we found the following instances of non-compliance. HAF funding received in June 2022 totaling $45 million was deposited into a non-interest-bearing demand account. In March 2023, $21 million was moved to an interest-bearing savings account. Fiscal year 2023 interest earnings of $88,777 on the HAF funds held by DSHA were recognized as program income. Interest earnings in excess of $500 were not annually remitted to the Department of Health and Human Services Payment Management System. Criteria: The HAF program operates in accordance with the requirements of 2 CFR 200.305(b) which requires the following: (8) The non-Federal entity must maintain advance payments of Federal awards in interest-bearing accounts… (9) Interest earned amounts up to $500 per year may be retained by the non-Federal entity for administrative expense. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the Department of Health and Human Services Payment Management System (PMS) through an electronic medium using either Automated Clearing House (ACH) network or a Fedwire Funds Service payment. Questioned Costs: $88,777. Interest income on HAF program funds was initially recorded as program income until it was corrected by an adjusting journal entry. During the audit of the year ended June 30, 2023, interest income was reduced by an audit adjusting journal entry. Effect: HAF program funds were held in a non-interest-bearing account during the period of July 2022 through March 2023. Interest income on HAF program was not timely remitted to the Department of Health and Human Services as required by the federal regulations. Cause: DSHA’s internal controls did not identify HAF program compliance requirements in time to prevent the Conditions noted. Recommendation: We recommend DSHA review the design and implementation of internal controls to address the identified weaknesses in internal control.
Criteria: The federal award program noted above is not subject to the Treasury-State Cash Management Improvement Act agreement and, as such, is subject to 2 CFR 200.305(b), which states: “The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.” 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The State of Hawaii, Department of Budget and Finance has determined and communicated in Finance Memorandum 20-02 that their standard for an “administratively feasible time period” was 21 calendar days. Condition: During the testing of the Department’s cash management procedures, it was determined that two out of sixty payments tested were not distributed within 21 days of the draw down of funds. For the items tested, the time elapsed between draw down and payment ranged to 28 to 57 days. Context: During the fiscal year ended June 30, 2023, the Department expended $8,398,791 (excluding food expenditures). Cause: The Department draws down federal funds that will be needed based on the expenditures that must be paid. However, since deposits must be posted prior to the processing of payments or disbursing of the funds, it is difficult for the Department to disburse federal funds in accordance with 2 CFR 200.305 (b). Also, the State’s payment process requires all State departments to process payments through DAGS resulting in processing delays. Effect: Noncompliance with federal regulations could result in a loss of funding that may jeopardize the operations of the Department’s federally funded programs. Questioned Costs: None Identification as a Repeat Finding, if applicable: See finding 2022-005 included in the Summary Schedule of Prior Audit Findings. Recommendation: We recommend that the Department work with DAGS and the Department of Budget and Finance to ensure compliance with established standard and timely disbursement of federal funds in accordance with 2 CFR 200.305(b). Views of Responsible Officials and Planned Corrective Action: See Part VI Correction Action Plan.
Department of Education and Passed through State of Iowa Department of Education Federal Financial Assistance Listing #84.287, C14-SHIP, C15-SHIP, C16-SHIP, C17-SHIP, 7/1/2022 – 6/30/2023 Twenty-First Century Community Learning Centers Program Cash Management Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. In addition, 2 CFR 200.302(b)(6) establishes that the financial management system of the entity must provide written procedures to implement the requirements of 2 CFR 200.305 Payment. Condition: No support could be provided for the third quarter draw requests to substantiate a secondary level of review was completed prior to submission of the draws. Cause: Documentation to support the review of draw requests prior to submission was not retained during the transition period in the Finance Director role. Effect: Without retaining supporting documentation to substantiate the review of draw requests, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Questioned Costs: None reported. Context: A non-statistical sample of 2 of 4 quarters were selected for testing. All draws submitted within the selected quarters were tested. Repeat Finding from Prior Year: No Recommendation: We acknowledge the review process lapsed during a time of employee transition, however, we recommend that management retain documentation to support the review of grant draws is performed for all grant draw requests. Views of Responsible Officials: Management is in agreement.
Federal Program: Research and Development Cluster Grantor Agency: Department of Defense Program Title: Randomized Trial for Pazopanib in HHT-Related Bleeding Federal Award Year: July 1, 2022 - June 30, 2023 Type of finding: • Significant Deficiency in Internal Control over Compliance • Compliance, Other Matter Criteria: 2 CFR 200.303 requires that organizations establish and maintain effective internal controls in place over Federal awards that provide reasonable assurance that the non-Federal entity is managing the award in compliance with Federal statues, regulations, and the terms of and conditions of the Federal award. Additionally, 2 CFR 200.305(b)(1) requires an organization receiving advances on federal funds must maintain or demonstrate the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part, and the timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. Condition: One reimbursement request submitted to the cognizant agency included expenditures for which the organization had already been reimbursed and, per review of the organization’s SF-425 submissions and accounting records, we noted that Federal funds advanced to the organization were not disbursed in a timely manner. Context: During our review of the organization’s Federal grant revenue reconciliation, an amount classified as an advance on Federal funds was determined to include amounts for which the organization had already requested reimbursement and been paid. Additionally, through review of grant reports, accounting records and inquiries with management, we discovered that the funds the organization had received in advance had not been used for project costs in a timely manner, consistent with 2 CFR 200.305. Cause: During the preparation of the fiscal year-end drawdown request, the data used to determine the amount the organization needed to draw down was not reviewed or reconciled against amounts previously requested and, thus, the drawdown included duplicate and/or incorrect requests for grant funds. Effect or possible effect of condition: Proper internal controls were not in place to mitigate the excess drawdown due to incorrect underlying information and procedures were not in place to minimize the time elapsing between receipt and disbursement of Federal funds. Questioned Costs: None. Repeat Finding: No. Recommendation: We recommend that management strengthen its internal controls over cash management to ensure that amounts submitted for reimbursement are properly reconciled against internal data used to request funding to date. Additionally, we recommend that management develop written procedures to minimize the time elapsed between receipt of Federal funds and the disbursement thereof. Views of responsible officials: This error occurred during a time of transition from one outsourced accounting firm and accounting system to another. The new outsourced accounting systems were not fully in place or automated at the time of the reporting error and there was no internal review process. The outsourced accounting firm is now fully transitioned, all systems are fully integrated with the accounting software, and the accounting team provides the program managers and organization managers with the reports needed to prepare drawdown requests. Cure HHT has developed and fully implemented a corrective action plan. The organization has communicated with the cognizant agency and all expenses eligible for submission for payment through grant funding will be submitted to and paid from the overdrawn funds. Once these funds are depleted, the organization will resume monthly draw submissions for all eligible expenses. The organization will reconcile all eligible expenses prior to requesting grant funds to avoid future duplicate and/or incorrect requests for grant funds. In addition, pending proper internal approvals of all submitted expenses, grant funds received will be dispersed within 3-7 business days from the date received.
CASH MANAGEMENT ACTVITIES Criteria: Non-Federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-Federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: The BOCES submitted three reimbursement requests for its Colorado Department of Education ESSER III ARP 9.5%, RURAL COACTION grant that were not properly supported by the underlying expenses. It appears in two of the instances the draws for the August through October 2023 expenditures and the draw for the November 2023 expenditures included a $1,667 payment that was subsequently charged to a different program. In the third instance, the amount requested differed from the June and 2023 accrued expenditures by $313. We were not able to isolate the cause of the difference. In total there was $3,647 of expenditures that had been reimbursed that were not charged to the grant. The BOCES did recognize that these amounts had been requested in error by year end and recorded an unearned revenue of $3,647 at year end and accordingly are not considered a questioned cost. This was not considered a material non-compliance with the grant requirements. In addition, the BOCES requested a reimbursement of $48,962 for the 23-24 fiscal year from the Colorado Department of Education. When this payment was received by the BOCES from the Department, it was noted as being for the 22-23 fiscal year and was recorded by the BOCES as a receivable and unearned revenue at year end. Context: This finding was noted during the testing of Cash Management procedures related to the BOES Educational Stabilization Funds grant receipts. All other tested grant receipts were based on previously incurred grant expenditures in compliance with the Cash Management requirements and this does not appear to be a recurring issue or a material weakness in controls and was not noted in prior years for the BOCES’ other Federal grants. Effect: The BOCES had requested $3,647 of grant funding that had either not been earned or obligated at the time of the request or was subsequently charged to a different BOCES program. Cause: It appears that the BOCES may have reclassified expenditures from one program to another subsequent to the corresponding draw request. This error may have occurred if the BOCES was generating reimbursement requests based on current month activity rather than relying on year to date report relative to year to date draw requests Recommendation: The BOCES must ensure that internal control procedures are in place to verify that all grant funding requests meet Cash Management requirements. In the BOCES case, this is normally a process whereby reimbursements are requested subsequent to the expenditure of grant funds, The BOCES should establish internal controls whereby the grant manager determines the amount to be requested and this is subsequently verified by finance staff to ensure that total requests do not exceed incurred or obligated expenditures. Management Response: The BOCES will assure internal control procedures are in place to verify that all grant funding requests meet Cash Management requirements. Reimbursements will be requested subsequent to the expenditure of grant funds. The BOCES will establish internal controls whereby the grant manager determines the amount to be requested and this will be subsequently verified by finance staff to ensure that total requests do not exceed incurred or obligated expenditures. A review of the internal control procedures with all grant management and finance staff will assure that this is not a reoccurring issue.
Finding Reference Number: SA2023-003 Cash Management - Draw Down of Community Development Block Grant Funds in Advance of Disbursement Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant – Entitlement Grants COVID-19 - Community Development Block Grants/Entitlement Grants-CV Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B-22-MC-06-0010 COVID-19 - B-20-MW-06-0010 Criteria: Under 2 CFR 200.305, a CDBG grantee is prohibited from drawing funds down from its line of credit in advance of cash need, and must minimize the time elapsing between the transfer of funds from its line of credit, and the disbursement of the funds. Advance payment must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the grantee or subrecipient carrying out an eligible activity. Condition: We selected eight non-payroll disbursements related to projects and subgrants for testing and noted two disbursement in April 2023 and June 2023 totaling $268,439 had been charged to the CDBG program in the amount of $282.567. The difference of $14,128 was the retention payable to the vendor, which was not paid in cash until after June 30, 2023. However, the City included the retentions payable in the grant drawdowns filed and received in May 2023 and September 2023. We also noted that total retentions payable charged to the CDBG program for the project were $17,301 as of June 30, 2023. Cause: We understand that the retentions were included in the grant drawdowns due to staff oversight. Questioned Costs: We question costs in the amount of $17,301. Effect: Drawing down funds in advance does not minimize the time elapsing between receipt of funds and expenditures and is not in compliance with the cash management provisions of 2 CFR 200.305 and the CDBG program. Recommendation: The City should not draw down funds until expenditures have been paid in cash and in the event, drawdowns occur prior to disbursement, ensure that the time elapsing between the draw down and the expenditure is minimized. In addition, the City should determine whether the interest earned on the grant funds advanced need to be returned to the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2023-003 Cash Management - Draw Down of Community Development Block Grant Funds in Advance of Disbursement Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant – Entitlement Grants COVID-19 - Community Development Block Grants/Entitlement Grants-CV Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B-22-MC-06-0010 COVID-19 - B-20-MW-06-0010 Criteria: Under 2 CFR 200.305, a CDBG grantee is prohibited from drawing funds down from its line of credit in advance of cash need, and must minimize the time elapsing between the transfer of funds from its line of credit, and the disbursement of the funds. Advance payment must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the grantee or subrecipient carrying out an eligible activity. Condition: We selected eight non-payroll disbursements related to projects and subgrants for testing and noted two disbursement in April 2023 and June 2023 totaling $268,439 had been charged to the CDBG program in the amount of $282.567. The difference of $14,128 was the retention payable to the vendor, which was not paid in cash until after June 30, 2023. However, the City included the retentions payable in the grant drawdowns filed and received in May 2023 and September 2023. We also noted that total retentions payable charged to the CDBG program for the project were $17,301 as of June 30, 2023. Cause: We understand that the retentions were included in the grant drawdowns due to staff oversight. Questioned Costs: We question costs in the amount of $17,301. Effect: Drawing down funds in advance does not minimize the time elapsing between receipt of funds and expenditures and is not in compliance with the cash management provisions of 2 CFR 200.305 and the CDBG program. Recommendation: The City should not draw down funds until expenditures have been paid in cash and in the event, drawdowns occur prior to disbursement, ensure that the time elapsing between the draw down and the expenditure is minimized. In addition, the City should determine whether the interest earned on the grant funds advanced need to be returned to the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
2023-008 – Cash Management Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund – Higher Education Emergency Relief Fund – Student Aid Portion and Institutional Portion Federal Assistance Listing Numbers: 84.425E and 84.425F Federal Award Identification Number and Year: P425F203028 and P425E201388 – all grants were awarded within 2021-2022 and 2022-2023 Award Period: 7/1/2022 – 6/30/2023 Type of Finding: Other Matters and Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: The Code of Federal Regulations, 2 CFR 200.305(b)(1), the non- Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. 200.305(b)(9) Interest earned amounts up to $500 per year may be retained by the non-Federal entity for administrative expense. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the government. A non-federal entity must maintain effective internal control over the federal award (2 CFR 200.303). Condition: The University did not expend all funds drawn down in advance by June 30, 2023, and therefore, they did not minimize the amount of time between the transfer of funds and disbursement. Additionally, more than $500 of interest was earned on the unspent funds and it was not remitted to the federal government as of year-end. Questioned Costs: $75,070 of interest earned as of June 30, 2023 Context: Federal funds were drawn down in advance of expenditure and there were no policies to minimize the time elapsing between the transfer of funds and disbursement by the University. Additionally, the University earned interest greater than $500 which was not remitted as of report date. Cause: University does not have a documented procedure or control that minimizes the time elapsing between the transfer of funds and disbursement or returning earned interest. Effect: Failure to document and adhere to procedures to minimize the time elapsing between transfer and disbursement of funds and the University incurred interest that has not been remitted back to the treasury. Repeat Finding: Yes, 2022-011 Recommendation: We recommend the University formally design and implement controls and monitor advances in federal funds to ensure time elapsing between the transfer of funds and disbursement is minimized and any interest required to be remitted is calculated and returned on a timely basis. Views of Responsible Officials: There is no disagreement with the audit finding and the University is in the process of implementing corrective procedures.
2023-008 – Cash Management Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund – Higher Education Emergency Relief Fund – Student Aid Portion and Institutional Portion Federal Assistance Listing Numbers: 84.425E and 84.425F Federal Award Identification Number and Year: P425F203028 and P425E201388 – all grants were awarded within 2021-2022 and 2022-2023 Award Period: 7/1/2022 – 6/30/2023 Type of Finding: Other Matters and Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: The Code of Federal Regulations, 2 CFR 200.305(b)(1), the non- Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. 200.305(b)(9) Interest earned amounts up to $500 per year may be retained by the non-Federal entity for administrative expense. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the government. A non-federal entity must maintain effective internal control over the federal award (2 CFR 200.303). Condition: The University did not expend all funds drawn down in advance by June 30, 2023, and therefore, they did not minimize the amount of time between the transfer of funds and disbursement. Additionally, more than $500 of interest was earned on the unspent funds and it was not remitted to the federal government as of year-end. Questioned Costs: $75,070 of interest earned as of June 30, 2023 Context: Federal funds were drawn down in advance of expenditure and there were no policies to minimize the time elapsing between the transfer of funds and disbursement by the University. Additionally, the University earned interest greater than $500 which was not remitted as of report date. Cause: University does not have a documented procedure or control that minimizes the time elapsing between the transfer of funds and disbursement or returning earned interest. Effect: Failure to document and adhere to procedures to minimize the time elapsing between transfer and disbursement of funds and the University incurred interest that has not been remitted back to the treasury. Repeat Finding: Yes, 2022-011 Recommendation: We recommend the University formally design and implement controls and monitor advances in federal funds to ensure time elapsing between the transfer of funds and disbursement is minimized and any interest required to be remitted is calculated and returned on a timely basis. Views of Responsible Officials: There is no disagreement with the audit finding and the University is in the process of implementing corrective procedures.
Finding Reference Number: 2023-014 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance. (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-027 Statistically Valid Sample: No Criteria U.S. Department of the Treasury (Treasury) regulations at 31 CFR 204 part 205 implement the Cash Management Act of 1990 (CMIA). 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 Catalog of Federal Domestic assistance that meet the funding threshold for a major federal program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over performed over cash management related to the Low-Income Home Energy Assistance program, we noted the following: A. Under the State of New Hampshire’s Cash Management Agreement (CMIA), direct expenditures are to be drawn using the actual draw – monthly technique. Under this technique, the funds are to be requested monthly based on actual costs incurred during that 1-month period. The funding technique is interest neutral. During our testwork over the cash draw process, we noted the following: a. For 4 of 9 cash draws selected for testwork, the New Hampshire Department of Energy (the Department) did not draw funds timely resulting in the cash draw to be delinquent. Each of the 4 cash draw covered multiple months of activity. As the clearance pattern within the CMIA agreement is interest neutral, there was no interest impact because of the cash draws not being performed timely. B. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $52,485,098 to subrecipients during the year ended June 30, 2023. During our testwork over compliance with cash management, we noted that for the 4 cash advance payment samples selected for testwork, the Department was not able to provide sufficient evidence to support that the cash advance was spent within a time period that minimizes the time elapsed between the transfer of federal funds to the subrecipient and their disbursement for program purposes. The Department’s normal disbursement cycle of every 30 days. As such, it does not appear that the Department sufficiently minimized the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes. Cause The cause of the condition found was primarily due to insufficient resources to monitor and track cash draws to ensure they are performed timely in accordance with the clearance patten established within the CMIA agreement and to ensure that subrecipients either utilize advance funds timely or effectively evaluate the amount of funds they need on hand at the time of the advance payment. Effect The effect of the condition found is that the Department did not comply with the provisions of the CMIA as it relates to the timing of cash draws. In addition, the Department did not have sufficient policies and procedures in place to ensure the time elapsed between the transfer of federal funds to the subrecipient and their disbursement of funds for program purposes is minimized. As such the Department was not in compliance with 2 CFR section 200.305(b)(1). Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all cash draws are performed timely and in accordance with the CMIA agreement. In addition, we recommend that the Department review its existing internal controls, policies and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2023-014 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance. (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-027 Statistically Valid Sample: No Criteria U.S. Department of the Treasury (Treasury) regulations at 31 CFR 204 part 205 implement the Cash Management Act of 1990 (CMIA). 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 Catalog of Federal Domestic assistance that meet the funding threshold for a major federal program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over performed over cash management related to the Low-Income Home Energy Assistance program, we noted the following: A. Under the State of New Hampshire’s Cash Management Agreement (CMIA), direct expenditures are to be drawn using the actual draw – monthly technique. Under this technique, the funds are to be requested monthly based on actual costs incurred during that 1-month period. The funding technique is interest neutral. During our testwork over the cash draw process, we noted the following: a. For 4 of 9 cash draws selected for testwork, the New Hampshire Department of Energy (the Department) did not draw funds timely resulting in the cash draw to be delinquent. Each of the 4 cash draw covered multiple months of activity. As the clearance pattern within the CMIA agreement is interest neutral, there was no interest impact because of the cash draws not being performed timely. B. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $52,485,098 to subrecipients during the year ended June 30, 2023. During our testwork over compliance with cash management, we noted that for the 4 cash advance payment samples selected for testwork, the Department was not able to provide sufficient evidence to support that the cash advance was spent within a time period that minimizes the time elapsed between the transfer of federal funds to the subrecipient and their disbursement for program purposes. The Department’s normal disbursement cycle of every 30 days. As such, it does not appear that the Department sufficiently minimized the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes. Cause The cause of the condition found was primarily due to insufficient resources to monitor and track cash draws to ensure they are performed timely in accordance with the clearance patten established within the CMIA agreement and to ensure that subrecipients either utilize advance funds timely or effectively evaluate the amount of funds they need on hand at the time of the advance payment. Effect The effect of the condition found is that the Department did not comply with the provisions of the CMIA as it relates to the timing of cash draws. In addition, the Department did not have sufficient policies and procedures in place to ensure the time elapsed between the transfer of federal funds to the subrecipient and their disbursement of funds for program purposes is minimized. As such the Department was not in compliance with 2 CFR section 200.305(b)(1). Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all cash draws are performed timely and in accordance with the CMIA agreement. In addition, we recommend that the Department review its existing internal controls, policies and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials: Management concurs with the finding above.
Condition: During our Cash Management tests, we found the following instances on which the Institution did not disbursed funds in an expedite matter: Fund Instances Days late 84.425F 3 32/40/46 84.031S 3 10/16/29 84.031M 2 13/15 Criteria: As per regulation, non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)).With respect to HEERF Section 2 funds the time elapsing between the transfer of funds and the disbursement should be 3 calendar days.Cause: In these instances, for the amount of the service contracted or equipment purchased, the Institution requested the totality of the amount of the service or purchase but, disbursements were made as worked progressed or equipment was completely delivered.Effect: Not following established controls could result in non-compliance of federal regulations for the program.Questioned costs: -0- Recommendation: Cash management procedures should be monitored better so that compliance with established safeguards are followed. Views of Responsible Officials and Planned Corrective Actions: Atlantic University agrees with the finding. See Corrective Action plan for the University’s Comments and plan.
Condition: During our Cash Management tests, we found the following instances on which the Institution did not disbursed funds in an expedite matter: Fund Instances Days late 84.425F 3 32/40/46 84.031S 3 10/16/29 84.031M 2 13/15 Criteria: As per regulation, non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)).With respect to HEERF Section 2 funds the time elapsing between the transfer of funds and the disbursement should be 3 calendar days.Cause: In these instances, for the amount of the service contracted or equipment purchased, the Institution requested the totality of the amount of the service or purchase but, disbursements were made as worked progressed or equipment was completely delivered.Effect: Not following established controls could result in non-compliance of federal regulations for the program.Questioned costs: -0- Recommendation: Cash management procedures should be monitored better so that compliance with established safeguards are followed. Views of Responsible Officials and Planned Corrective Actions: Atlantic University agrees with the finding. See Corrective Action plan for the University’s Comments and plan.
Condition: During our Cash Management tests, we found the following instances on which the Institution did not disbursed funds in an expedite matter: Fund Instances Days late 84.425F 3 32/40/46 84.031S 3 10/16/29 84.031M 2 13/15 Criteria: As per regulation, non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)).With respect to HEERF Section 2 funds the time elapsing between the transfer of funds and the disbursement should be 3 calendar days.Cause: In these instances, for the amount of the service contracted or equipment purchased, the Institution requested the totality of the amount of the service or purchase but, disbursements were made as worked progressed or equipment was completely delivered.Effect: Not following established controls could result in non-compliance of federal regulations for the program.Questioned costs: -0- Recommendation: Cash management procedures should be monitored better so that compliance with established safeguards are followed. Views of Responsible Officials and Planned Corrective Actions: Atlantic University agrees with the finding. See Corrective Action plan for the University’s Comments and plan.
U.S. Department of Health and Human Services Health Resources and Services Administration Health Care Center Program CFDA 93.224 2023-05: Timeliness of Deposits Criteria: The recipient is responsible for complying with audit requirements in accordance with 2 CFR 200.305. A non-Federal entity must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity. Condition: The Organization did not deposit funds from the pass-through entity in a timely manner. Effect: Failure to have an adequate policy and procedure regarding cash management could result in misappropriation of assets and material misstatements in financial statements. Cause: Lack of policies and procedures regarding cash management and recording deposits. Identification of a repeat finding: No. Recommendation: We recommend that the Organization ensure to deposit funds received in a timely manner as to avoid misappropriation of assets and misstatements in financial statements. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 33 in this audit report.
Finding No. 2023-001 Cash Management – Drawdowns of funds Federal Program ALN 66.458 - Capitalization Grants for Clean Water State Revolving Funds Name of Federal Agency U.S Environmental Protection Agency Pass-through Entity Puerto Rico Department of Natural and Environmental Resources (DNER) Category Compliance/Significant Deficiency on Internal Control Compliance Requirements Cash Management – Drawdowns of funds Criteria 2 CFR Section 200.305 (b) establishes the following: For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Pursuant to § 35.3135(d) The State must agree to expend all funds in the SRF in an expenditious and timely manner. Condition found In two (2) of five (5) drawdowns selected for testing, we found that the disbursements were not transferred to the recipient in a timely manner as follows: Grant award # Date Federal portion Total Date deposited in Revolving Fund bank account Date paid to subrecipient Days elapsed C-72-051-03 10/11/2022 $ 2,723,093.00 $ 2,723,093.00 10/12/2022 10/19/2022 7 C-72-051-03 12/15/2022 1,200,151.81 1,200,151.81 12/16/2022 12/30/2022 14 Cause The delays in the transfer of funds were caused by administrative delays and lack of personnel assigned to carry out these tasks in a timely manner. Effect Advanced funds remained idle at the rotatory fund trust account for an extended amount of time. This also may result in administrative sanctions by the grantor. Questioned Cost None. Context Two (2) of five (5) drawdowns selected for testing were not transferred to the recipient in a timely manner. Identification of a repeat finding This is a not repeat finding from the immediate previous audit. Views of responsible officials and planned corrective actions The management of the Revolving Fund agrees with this finding. Please refer to the corrective action plan section on pages 49-50. Recommendation We recommend management of the Revolving Funds to establish written procedures and proper monitoring that ensure the compliance with the requirements for cash management.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.
2023-003: Material weakness in Internal Control / Material Noncompliance – Cash Management (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: 2 CFR 200.305(b) states, in part: “For Non-Federal entities payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity…” 2 CFR 200.305(b)(2)(ii) states, in part: “Non-Federal entities must be authorized to submit requests for advance payments and reimbursements….”. 2 CFR 200.302(b)(6) states, in part: “the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR 200.305 – Federal Payment”. Condition: 1) The Consortium requested funds in advance of when the related disbursements were made, 2) the basis for the advances (requests) were not supported by appropriate documentation, and 3) authorization for requesting funds in advance was not obtained. Context: The amount overdrawn for the WIOA Cluster totaled $360,671. It was noted that other programs were also overdrawn as follows: Temporary Assistance for Needy Families Cluster (ALN 93.958): $55,725, Employment Services Cluster (ALN 17.207): $1,389, and Unemployment Insurance (ALN 17.225): $18,660. The total amount of funds overdrawn as of year-end totaled $436,445. Cause: Management oversight. Effect: Funds were requested and received in advance of when the related payments were disbursed without obtaining authorization for advance payments, and without properly documenting the basis for the requested funds. Consequently, the Consortium did not minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Recommendation: The Consortium should carefully review their policies and procedures and make the necessary changes to assure that cash draws are based on expenditures already incurred and they are supported by transactions recorded in the books and records of the Consortium. Views of Responsible Officials: We agree with the finding. Michigan Works! Southeast will continue to ensure it adheres to the policy standards for cash on hand time limits.