Finding 2022-001: Cash Management (Significant Deficiency) Information on the Federal Program: Research and Development Cluster Criteria: CFR §200.305 states when 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. It also states that excess cash should be returned. Condition: RoboNation received funds in excess of expenditures. Context: Our audit procedures consisted of compliance testwork over RoboNation's reimbursements for funds on all awards included within the research and development cluster. We consider our sample to be representative of the population and a statistically valid sample. Cause: RoboNation requested reimbursement of funds in excess of actual billings. Effect: RoboNation overbilled a grant and had excess cash on hand. This could lead to RoboNation having to return the funds. Questioned Costs: Undetermined Identification as Repeat Finding, if Applicable: 2021-002 Recommendation: We recommend that management of RoboNation be more mindful of the U.S. Government regulations with respect to billings and ensure billings are accurate and properly stated.
Finding 2022-001: Cash Management (Significant Deficiency) Information on the Federal Program: Research and Development Cluster Criteria: CFR §200.305 states when 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. It also states that excess cash should be returned. Condition: RoboNation received funds in excess of expenditures. Context: Our audit procedures consisted of compliance testwork over RoboNation's reimbursements for funds on all awards included within the research and development cluster. We consider our sample to be representative of the population and a statistically valid sample. Cause: RoboNation requested reimbursement of funds in excess of actual billings. Effect: RoboNation overbilled a grant and had excess cash on hand. This could lead to RoboNation having to return the funds. Questioned Costs: Undetermined Identification as Repeat Finding, if Applicable: 2021-002 Recommendation: We recommend that management of RoboNation be more mindful of the U.S. Government regulations with respect to billings and ensure billings are accurate and properly stated.
Finding 2022-001: Cash Management (Significant Deficiency) Information on the Federal Program: Research and Development Cluster Criteria: CFR §200.305 states when 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. It also states that excess cash should be returned. Condition: RoboNation received funds in excess of expenditures. Context: Our audit procedures consisted of compliance testwork over RoboNation's reimbursements for funds on all awards included within the research and development cluster. We consider our sample to be representative of the population and a statistically valid sample. Cause: RoboNation requested reimbursement of funds in excess of actual billings. Effect: RoboNation overbilled a grant and had excess cash on hand. This could lead to RoboNation having to return the funds. Questioned Costs: Undetermined Identification as Repeat Finding, if Applicable: 2021-002 Recommendation: We recommend that management of RoboNation be more mindful of the U.S. Government regulations with respect to billings and ensure billings are accurate and properly stated.
Finding 2022-001: Cash Management (Significant Deficiency) Information on the Federal Program: Research and Development Cluster Criteria: CFR §200.305 states when 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. It also states that excess cash should be returned. Condition: RoboNation received funds in excess of expenditures. Context: Our audit procedures consisted of compliance testwork over RoboNation's reimbursements for funds on all awards included within the research and development cluster. We consider our sample to be representative of the population and a statistically valid sample. Cause: RoboNation requested reimbursement of funds in excess of actual billings. Effect: RoboNation overbilled a grant and had excess cash on hand. This could lead to RoboNation having to return the funds. Questioned Costs: Undetermined Identification as Repeat Finding, if Applicable: 2021-002 Recommendation: We recommend that management of RoboNation be more mindful of the U.S. Government regulations with respect to billings and ensure billings are accurate and properly stated.
Finding 2022-001: Cash Management (Significant Deficiency) Information on the Federal Program: Research and Development Cluster Criteria: CFR §200.305 states when 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. It also states that excess cash should be returned. Condition: RoboNation received funds in excess of expenditures. Context: Our audit procedures consisted of compliance testwork over RoboNation's reimbursements for funds on all awards included within the research and development cluster. We consider our sample to be representative of the population and a statistically valid sample. Cause: RoboNation requested reimbursement of funds in excess of actual billings. Effect: RoboNation overbilled a grant and had excess cash on hand. This could lead to RoboNation having to return the funds. Questioned Costs: Undetermined Identification as Repeat Finding, if Applicable: 2021-002 Recommendation: We recommend that management of RoboNation be more mindful of the U.S. Government regulations with respect to billings and ensure billings are accurate and properly stated.
Finding 2022-001: Cash Management (Significant Deficiency) Information on the Federal Program: Research and Development Cluster Criteria: CFR §200.305 states when 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. It also states that excess cash should be returned. Condition: RoboNation received funds in excess of expenditures. Context: Our audit procedures consisted of compliance testwork over RoboNation's reimbursements for funds on all awards included within the research and development cluster. We consider our sample to be representative of the population and a statistically valid sample. Cause: RoboNation requested reimbursement of funds in excess of actual billings. Effect: RoboNation overbilled a grant and had excess cash on hand. This could lead to RoboNation having to return the funds. Questioned Costs: Undetermined Identification as Repeat Finding, if Applicable: 2021-002 Recommendation: We recommend that management of RoboNation be more mindful of the U.S. Government regulations with respect to billings and ensure billings are accurate and properly stated.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering & Office of Cyber Infrastructure AL No.: 47.050, 47.070, 47.079 & 47.080 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019 -05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), OAC-1931278 (10/1/2019 – 09/30/2022), OAC- 1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OAC-2103780 (10/01/2021 – 09/30/2026), OAC-2118329 (10/01/2021 – 09/30/2026),OISE-1855654 (05/15/2019 – 12/31/2023) & OAC-1664061 (10/01/17 – 09/30/2022) Pass Through Entity: Utah State University MW2022-007 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Material Weakness Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2022, CUAHSI had advance drawdowns totaling $3,862,318 from the NSF. Of this amount, CUAHSI incurred $3,228,996 in eligible expenses for the year ended December 31, 2022. This resulted in $633,322 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2022 are reported as part of advances payable in the accompanying Statement of Financial Position. Cause & Context CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement.Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2021-008. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering & Office of Cyber Infrastructure AL No.: 47.050, 47.070, 47.079 & 47.080 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019 -05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), OAC-1931278 (10/1/2019 – 09/30/2022), OAC- 1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OAC-2103780 (10/01/2021 – 09/30/2026), OAC-2118329 (10/01/2021 – 09/30/2026),OISE-1855654 (05/15/2019 – 12/31/2023) & OAC-1664061 (10/01/17 – 09/30/2022) Pass Through Entity: Utah State University MW2022-007 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Material Weakness Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2022, CUAHSI had advance drawdowns totaling $3,862,318 from the NSF. Of this amount, CUAHSI incurred $3,228,996 in eligible expenses for the year ended December 31, 2022. This resulted in $633,322 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2022 are reported as part of advances payable in the accompanying Statement of Financial Position. Cause & Context CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement.Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2021-008. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering & Office of Cyber Infrastructure AL No.: 47.050, 47.070, 47.079 & 47.080 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019 -05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), OAC-1931278 (10/1/2019 – 09/30/2022), OAC- 1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OAC-2103780 (10/01/2021 – 09/30/2026), OAC-2118329 (10/01/2021 – 09/30/2026),OISE-1855654 (05/15/2019 – 12/31/2023) & OAC-1664061 (10/01/17 – 09/30/2022) Pass Through Entity: Utah State University MW2022-007 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Material Weakness Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2022, CUAHSI had advance drawdowns totaling $3,862,318 from the NSF. Of this amount, CUAHSI incurred $3,228,996 in eligible expenses for the year ended December 31, 2022. This resulted in $633,322 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2022 are reported as part of advances payable in the accompanying Statement of Financial Position. Cause & Context CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement.Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2021-008. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering & Office of Cyber Infrastructure AL No.: 47.050, 47.070, 47.079 & 47.080 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019 -05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), OAC-1931278 (10/1/2019 – 09/30/2022), OAC- 1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OAC-2103780 (10/01/2021 – 09/30/2026), OAC-2118329 (10/01/2021 – 09/30/2026),OISE-1855654 (05/15/2019 – 12/31/2023) & OAC-1664061 (10/01/17 – 09/30/2022) Pass Through Entity: Utah State University MW2022-007 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES Material Weakness Criteria CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation. Condition CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2022, CUAHSI had advance drawdowns totaling $3,862,318 from the NSF. Of this amount, CUAHSI incurred $3,228,996 in eligible expenses for the year ended December 31, 2022. This resulted in $633,322 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2022 are reported as part of advances payable in the accompanying Statement of Financial Position. Cause & Context CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement.Effect Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2021-008. Recommendation The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
1. Provide staff training on proper cash management and documentation standards under 2 CFR § 200.305.
2 CFR 200.302(b)(6) requires that non-Federal entities establish written procedures to implement the requirements of 2 CFR 200.305. The FAR clause at 48 CFR section 52.216-7 applies to reimbursement payment. Paragraph (b)(1) of that clause requires that the non-federal entity request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid, or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Article V, Section B states: 1. Periodically, but not more frequently than once every 30 calendar days, the Non-Federal Sponsor shall provide the Government with a sufficient invoice for costs the Non-Federal Sponsor has incurred for the Project. 2. Upon receipt of such sufficient invoice, the Government shall review the costs identified therein and shall determine: (a) the amount to be included in total project costs, subject to the limitations in Article II.C. of this Agreement; (b) the total costs incurred by the parties to date (including the value of lands, easements, rights-of-way, and relocations, and the costs of permits determined in accordance with Article V of this Agreement); (c) each party’s share of total project costs and the costs of data recovery activities associated with historic preservation in accordance with Article II.P. of this Agreement incurred by the parties to date; (d) the costs incurred by each party to date; (e) the total amount of reimbursements the Government has made to date in accordance with this paragraph; (f) the balance of Federal funds available for the Project, as of the date of such review; (g) the amount of reimbursement, if any, due to the Non-Federal Sponsor; and (h) the amount that actually will be paid to the Non-Federal Sponsor (hereinafter the “payment amount”) if the amount of reimbursement determined above cannot be fully paid due to an insufficiency of Federal funds or the limitations of the Section 594 Program Limit for Ohio or the Section 102 Limit. Article I, Section K state the term “sufficient invoice” shall mean documentation provided by the Non-Federal Sponsor containing the following: (1) a written certification by the Non-Federal Sponsor to the Government that it has made specified payments to contractors, suppliers, or employees for performance of work in accordance with this Agreement, or a written certification by the Non-Federal Sponsor to the Government that it has received bills from contractors, suppliers, or employees for performance of work in accordance with this Agreement; (2) copies of all relevant invoices and evidence of such payments or bills received; (3) written identification of such costs that have been paid with Federal program funds and a copy of the written verification from the Federal agency that provided the funds; and (4) a written request for reimbursement for the amount of such specified payments or bills received. The Village received funding from various sources for the project. Due to cash flow issues, the Village often used alternate funding to meet federal obligations, leaving an accumulation of federal funds on hand during the year. The Village also does not have any formal policies in place regarding cash management requirements. We recommend that the Village more closely monitor its reimbursement requests in relation to actual expenditures paid to ensure that the Village does not accumulate federal funds. Additionally, the Village should adopt formal policies and procedures that address cash management requirements.
Assistance Listing Number: 93.958 Name of Federal Program: Block Grants for Community Mental Health Services Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022 Criteria or Specific Requirement: Non-federal entities must establish policies and procedures to implement the requirements of 2 CFR section 200.305. Program costs must be incurred by non-federal entity before submitting a reimbursement request. Condition: During our testing of reimbursement requests, we identified amounts that were requested for reimbursement prior to the expenses being incurred. Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs have been incurred prior to requests for reimbursement. Effect or Potential Effect: Noncompliance with cash management requirements occurred within the federal program and costs incurred could be disallowed. Context and Questioned Costs: A sample of 6 reimbursement requests totaling $135,397 was selected for testing from a population of 10 reimbursement requests totaling $347,508. The testing found 1 reimbursement request totaling $32,073 that included $21,180 of expenses that had not been incurred as of the date of the reimbursement request. Repeat Finding: No Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred prior to reimbursement. Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure no invoices are submitted in advance of incurring expenses.
Assistance Listing Number: 93.958 Name of Federal Program: Block Grants for Community Mental Health Services Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022 Criteria or Specific Requirement: Non-federal entities must establish policies and procedures to implement the requirements of 2 CFR section 200.305. Program costs must be incurred by non-federal entity before submitting a reimbursement request. Condition: During our testing of reimbursement requests, we identified amounts that were requested for reimbursement prior to the expenses being incurred. Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs have been incurred prior to requests for reimbursement. Effect or Potential Effect: Noncompliance with cash management requirements occurred within the federal program and costs incurred could be disallowed. Context and Questioned Costs: A sample of 6 reimbursement requests totaling $135,397 was selected for testing from a population of 10 reimbursement requests totaling $347,508. The testing found 1 reimbursement request totaling $32,073 that included $21,180 of expenses that had not been incurred as of the date of the reimbursement request. Repeat Finding: No Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred prior to reimbursement. Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure no invoices are submitted in advance of incurring expenses.
Assistance Listing Number: 93.958 Name of Federal Program: Block Grants for Community Mental Health Services Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022 Criteria or Specific Requirement: Non-federal entities must establish policies and procedures to implement the requirements of 2 CFR section 200.305. Program costs must be incurred by non-federal entity before submitting a reimbursement request. Condition: During our testing of reimbursement requests, we identified amounts that were requested for reimbursement prior to the expenses being incurred. Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs have been incurred prior to requests for reimbursement. Effect or Potential Effect: Noncompliance with cash management requirements occurred within the federal program and costs incurred could be disallowed. Context and Questioned Costs: A sample of 6 reimbursement requests totaling $135,397 was selected for testing from a population of 10 reimbursement requests totaling $347,508. The testing found 1 reimbursement request totaling $32,073 that included $21,180 of expenses that had not been incurred as of the date of the reimbursement request. Repeat Finding: No Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred prior to reimbursement. Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure no invoices are submitted in advance of incurring expenses.
Finding #: 2022-002 Cash Management – Noncompliance (not material to compliance requirement) Identification of Federal Program and Award Program title: U.S. Department of Health and Human Services (DHHS): Public Health Services Act, Title III, Section 330 (Health Center Cluster) CFDA #: 93.224/93.527 Award #: C8E44790 Program Year: 2022 Criteria Pursuant to 2 CFR section 200.305(b), 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. Under the advance payment method, a non-Federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-Federal entity, as well as a financial management system that meets the specified standards for fund control and accountability. Condition During our testing of cash management, we noted an instance of noncompliance relating to the health center’s effort to minimize the time between drawing and disbursing federal funds. 1 out of 6 drawdowns was identified as a portion of unearned revenue. Upon further inspection, auditor identified a total of $74,580 in deferred revenue that was not disbursed timely (time elapsed between the transfer of funds and disbursement exceeded the three-day rule). Cause Health center personnel were not following cash management policies and procedures (“DHHS Draw Down Procedure #2.530”) that comply with 2 CFR section 200.305(b). Effect Possibility of interest payments due, and of draw down restriction being placed on Payment Management System (PMS) account or denial of future funding. Questioned Costs $74,580 Perspective Information We tested a statistically valid sample of 6 out of 17 total cash drawdowns and determined that the audit finding represented an isolated instance. Repeat Finding This finding is not a repeated finding. Recommendation We recommend that management review DHHS draw down policies and procedures in place to ensure CAMcare is in compliance with the compliance requirements of 2 CFR section 200.305(b). Views of Responsible Officials Management recognizes the noncompliance; on November 29, 2023, CAMcare’s CEO, Jillian Hudspeth, and CFO, Christopher Bernardi, agreed with this finding, and explained that CAMcare’s original budget for the C8E grant was to expand operations at the Clementon location. However, after the initial site plans and architectural drawings were completed and paid for, the costs of materials and labor had increased significantly due to supply chain issues. Management made the decision to cancel the project and pivot to different areas of need. Because the project was cancelled, HRSA disallowed the site plan and architecture costs. CAMcare’s CFO and grant manager at the time were given verbal approval to reduce a future drawdown by the amount that had been disallowed.
Finding #: 2022-003 Period of Performance – Noncompliance (not material to compliance requirement) Identification of Federal Program and Award Program title: U.S. Department of Health and Human Services (DHHS): Public Health Services Act, Title III, Section 330 (Health Center Cluster) CFDA #: 93.224/93.527 Award #: H8DCS36483 Program Year: 2022 Criteria Pursuant to 2 CFR sections 200.308, 200.309, and 200.403(h), a non-Federal entity may charge to the Federal award only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Pursuant to 2 CFR section 200.305(b)(5), to the extent available, the non-Federal entity must disburse funds available from program income and interest earned on such funds before requesting additional cash payments. Condition During our testing of period of performance, we noted instances of noncompliance relating to the health center’s recognition of expenditures beyond the award’s period of performance. After inspection of invoices and canceled checks supporting disbursements tested, the auditor identified 3 out of 40 expenditures where costs were incurred after the period of performance end date. Upon further investigation, the auditor determined that $153,005 of the $433,455 amount reported as 2022 federal expenditures under award H8DCS36483 was incurred beyond the period of performance end date. Cause Health center personnel were not following financial expense allocation of revenue policies and procedures, which state that federal funds will be utilized according to regulations and what is established on the budget information form submitted with the grant application. Effect Possibility of interest payments due, and of draw down restriction being placed on Payment Management System (PMS) account or denial of future funding. Questioned Costs $153,005 Perspective Information We tested a statistically valid sample of 40 out of 250+ federal expenditures and determined that the audit finding represented a systemic problem. Repeat Finding This finding is not a repeated finding. Recommendation We recommend that management review financial expense allocation of revenue policies and closely monitor grant procedures in place to ensure CAMcare is in compliance with budget information stipulated in grant agreements. Views of Responsible Officials Management recognizes the noncompliance; on November 29, 2023, CAMcare’s CEO, Jillian Hudspeth, and CFO, Christopher Bernardi, agreed with this finding, and explained that the issue occurred during a time period when none of the current authorizing officials were employed by CAMcare.
U.S. DEPARTMENT OF HOMELAND SECURITY KANSAS ADJUANT GENERAL SIGNIFICANT DEFICIENCY 2022-001: Disaster Grants – Public Assistance Grant period: Year Ended December 31, 2022 Condition and Context: The County does not have a complete set of written cash management policies and procedures as required by the Uniform Guidance. The lack of written procedures did not result in any material noncompliance, fraud or abuse with respect to the major program. Criteria: The Uniform Guidance requires Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, to follow the cash management standards set out at 2 CFR section 200.305. The County must have a complete set of written cash management policies, which conform to applicable Federal statutes and the cash management requirements identified in 2 CFR part 200. Cause: The County was unaware of the written cash management policy requirements required by the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program requirements. Recommendation: Management should determine the scope of written policies needed for compliance with all federal programs and develop policies and procedures to comply with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and recommendation. The County’s existing policies are currently under review by management and staff to determine what updates/changes are necessary in order to meet the Uniform Guidance requirements. Once any updates/changes are drafted, the policy will be presented to the Governing Body for review and approval.
Criteria: Cash management requirements of federal grants are contained in 2 CFR sections 200.302(b)(6) and 200.305, 31 CFR part 205, 48 CFR sections 52.216-7(b) and 52.232-12, as well as federal awarding agency regulations and terms and conditions of the federal award. The Organization must establish written procedures around cash management and must minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the Organization. Condition: The Organization does not have written procedures around cash management and requests to draw down funds from the federal agency were in excess of current expenditures, resulting in excess time between the transfer of funds and disbursement by the Organization. Effect: As of December 31, 2022, $70,267 of funds had been drawn down from the federal agency in excess of expenditures. Cause: The Organization tracks federal expenditures in the accounting software and the individual that requests the funds from the federal agency does not verify the amount of expenditures with the accounting software and requests an estimated amount each month. Identification of repeat finding: This is not a repeat finding from a previous audit. Recommendation: We recommend the Organization develop written policies and procedures around cash management and request funds monthly based on the actual expenditures of that month to minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the Organization. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will implement written policies and procedures around cash management.
Information on the Federal Program: Assistance Listing Number 10.763—Emergency Community Water Assistance Grants, United States Department of Agriculture. Compliance Requirements: Cash Management. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(6) requires that each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 Payment. Condition: We noted that the City did not have written procedures to implement the requirements of 2 CFR § 200.305 Payment during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures to implement the requirements of 2 CFR § 200.305 Payment. Effect: Failure to have written procedures to ensure the compliance with the 2 CFR § 200.305 Payment could result in federal award drawdown requests by the City to be overstated as to immediate cash flow needs, noncompliance with Uniform Guidance requirements, and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to the Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required.
Information on the Federal Program: Assistance Listing Number 10.763—Emergency Community Water Assistance Grants, United States Department of Agriculture. Compliance Requirements: Cash Management. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(6) requires that each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 Payment. Condition: We noted that the City did not have written procedures to implement the requirements of 2 CFR § 200.305 Payment during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures to implement the requirements of 2 CFR § 200.305 Payment. Effect: Failure to have written procedures to ensure the compliance with the 2 CFR § 200.305 Payment could result in federal award drawdown requests by the City to be overstated as to immediate cash flow needs, noncompliance with Uniform Guidance requirements, and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to the Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required.
Finding 2022-002 ? Cash Management ? Pass-through Entities Identification of the federal program U.S. Department of Defense U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Nos. with amounts provided to subrecipients ? 12.420, 93.242, 93.279, 93.351, 93.855, and 93.866 Federal Award Numbers Grant Period 5R01AI123047-05 8/15/2017-7/31/2022 1R56AG073316-01 9/01/2021-8/31/2023 W81XWH1910496 5/01/2020-10/31/2023 1R01MH130193-01 4/05/2022-2/28/2023 7R01MH116844-04 7/01/2020-1/31/2022 R01MH116844-05 2/01/2022-1/31/2024 5R01DA052845-03 7/01/2022-6/30/2023 5R01DA052845-02 7/01/2021-6/30/2022 2P51OD011133-23 5/01/2021-4/30/2022 2P51OD011133-18 5/01/2016-4/30/2017 5U42OD010442-21 2/01/2022-1/31/2023 5P51OD011133-24 5/01/2022-4/30/2023 5R21AI150445-02 2/01/2021-1/31/2024 5R01AI138587-05 5/01/2022-4/30/2023 5R01AI136831-04 8/01/2022-7/31/2023 5R01AI138587-04 5/01/2021-4/30/2022 5R01AI134245-05 2/01/2022-4/30/2023 1P30AI168439-01 3/10/2022-2/28/2023 5R01AI123047-05 8/01/2020-7/31/2022 7R01AI134245-05 9/01/2021-4/30/2022 5U34AG068482-03 6/01/2022-5/31/2022 U34AG068482 6/01/2021-5/31/2022 5P01AG051428-05 3/01/2020-2/28/2022 1R56AG073316-01 9/01/2021-8/31/2023 5R01AG065546-03 6/01/2022-5/31/2023 1R01AG065546-02 6/01/2021-5/31/2022 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? 2 CFR 200.305(b)(1) requires ?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.? 2 CFR 200.305(b)(3) requires ?when the reimbursement method is used, the Federal 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.? Condition Texas Biomed did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. Texas Biomed paid 2 of 23 subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Cause Texas Biomed?s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 2 of 23 subrecipient payments, Texas Biomed made payments to subrecipients at 50 and 41 days after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (5R01AI123047-05 and 1R56AG073316-01). For 1 additional subrecipient payment, we noted approval by the principal investigator of the subrecipient?s request for reimbursement was made after the payment was made to the subrecipient (5R01AI123047-05). Texas Biomed?s subrecipient expenditures totaled $2.0 million during the period, which represented 5.2% of Texas Biomed?s total research and development expenditures of $38.1 million. Identification as a repeat finding, if applicable This is not a repeat finding. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Texas Biomed will implement a more effective operating procedure for subrecipient invoice approval and timely payment that will include timeline expectations for the initial approval request to the applicable principal investigator upon receipt of invoices from the subrecipient, timeline for following-up with the principal investigator on approval requests, timeline and direction for seeking proxy approval if the principal investigator is unavailable or unable to provide a timely response, and timeline for entering the subrecipient invoice in Texas Biomed financial systems facilitating payment upon approval. Texas Biomed will implement corrective action on June 1, 2023.
Finding 2022-002 ? Cash Management ? Pass-through Entities Identification of the federal program U.S. Department of Defense U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Nos. with amounts provided to subrecipients ? 12.420, 93.242, 93.279, 93.351, 93.855, and 93.866 Federal Award Numbers Grant Period 5R01AI123047-05 8/15/2017-7/31/2022 1R56AG073316-01 9/01/2021-8/31/2023 W81XWH1910496 5/01/2020-10/31/2023 1R01MH130193-01 4/05/2022-2/28/2023 7R01MH116844-04 7/01/2020-1/31/2022 R01MH116844-05 2/01/2022-1/31/2024 5R01DA052845-03 7/01/2022-6/30/2023 5R01DA052845-02 7/01/2021-6/30/2022 2P51OD011133-23 5/01/2021-4/30/2022 2P51OD011133-18 5/01/2016-4/30/2017 5U42OD010442-21 2/01/2022-1/31/2023 5P51OD011133-24 5/01/2022-4/30/2023 5R21AI150445-02 2/01/2021-1/31/2024 5R01AI138587-05 5/01/2022-4/30/2023 5R01AI136831-04 8/01/2022-7/31/2023 5R01AI138587-04 5/01/2021-4/30/2022 5R01AI134245-05 2/01/2022-4/30/2023 1P30AI168439-01 3/10/2022-2/28/2023 5R01AI123047-05 8/01/2020-7/31/2022 7R01AI134245-05 9/01/2021-4/30/2022 5U34AG068482-03 6/01/2022-5/31/2022 U34AG068482 6/01/2021-5/31/2022 5P01AG051428-05 3/01/2020-2/28/2022 1R56AG073316-01 9/01/2021-8/31/2023 5R01AG065546-03 6/01/2022-5/31/2023 1R01AG065546-02 6/01/2021-5/31/2022 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? 2 CFR 200.305(b)(1) requires ?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.? 2 CFR 200.305(b)(3) requires ?when the reimbursement method is used, the Federal 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.? Condition Texas Biomed did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. Texas Biomed paid 2 of 23 subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Cause Texas Biomed?s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 2 of 23 subrecipient payments, Texas Biomed made payments to subrecipients at 50 and 41 days after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (5R01AI123047-05 and 1R56AG073316-01). For 1 additional subrecipient payment, we noted approval by the principal investigator of the subrecipient?s request for reimbursement was made after the payment was made to the subrecipient (5R01AI123047-05). Texas Biomed?s subrecipient expenditures totaled $2.0 million during the period, which represented 5.2% of Texas Biomed?s total research and development expenditures of $38.1 million. Identification as a repeat finding, if applicable This is not a repeat finding. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Texas Biomed will implement a more effective operating procedure for subrecipient invoice approval and timely payment that will include timeline expectations for the initial approval request to the applicable principal investigator upon receipt of invoices from the subrecipient, timeline for following-up with the principal investigator on approval requests, timeline and direction for seeking proxy approval if the principal investigator is unavailable or unable to provide a timely response, and timeline for entering the subrecipient invoice in Texas Biomed financial systems facilitating payment upon approval. Texas Biomed will implement corrective action on June 1, 2023.
Finding 2022-002 ? Cash Management ? Pass-through Entities Identification of the federal program U.S. Department of Defense U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Nos. with amounts provided to subrecipients ? 12.420, 93.242, 93.279, 93.351, 93.855, and 93.866 Federal Award Numbers Grant Period 5R01AI123047-05 8/15/2017-7/31/2022 1R56AG073316-01 9/01/2021-8/31/2023 W81XWH1910496 5/01/2020-10/31/2023 1R01MH130193-01 4/05/2022-2/28/2023 7R01MH116844-04 7/01/2020-1/31/2022 R01MH116844-05 2/01/2022-1/31/2024 5R01DA052845-03 7/01/2022-6/30/2023 5R01DA052845-02 7/01/2021-6/30/2022 2P51OD011133-23 5/01/2021-4/30/2022 2P51OD011133-18 5/01/2016-4/30/2017 5U42OD010442-21 2/01/2022-1/31/2023 5P51OD011133-24 5/01/2022-4/30/2023 5R21AI150445-02 2/01/2021-1/31/2024 5R01AI138587-05 5/01/2022-4/30/2023 5R01AI136831-04 8/01/2022-7/31/2023 5R01AI138587-04 5/01/2021-4/30/2022 5R01AI134245-05 2/01/2022-4/30/2023 1P30AI168439-01 3/10/2022-2/28/2023 5R01AI123047-05 8/01/2020-7/31/2022 7R01AI134245-05 9/01/2021-4/30/2022 5U34AG068482-03 6/01/2022-5/31/2022 U34AG068482 6/01/2021-5/31/2022 5P01AG051428-05 3/01/2020-2/28/2022 1R56AG073316-01 9/01/2021-8/31/2023 5R01AG065546-03 6/01/2022-5/31/2023 1R01AG065546-02 6/01/2021-5/31/2022 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? 2 CFR 200.305(b)(1) requires ?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.? 2 CFR 200.305(b)(3) requires ?when the reimbursement method is used, the Federal 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.? Condition Texas Biomed did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. Texas Biomed paid 2 of 23 subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Cause Texas Biomed?s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 2 of 23 subrecipient payments, Texas Biomed made payments to subrecipients at 50 and 41 days after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (5R01AI123047-05 and 1R56AG073316-01). For 1 additional subrecipient payment, we noted approval by the principal investigator of the subrecipient?s request for reimbursement was made after the payment was made to the subrecipient (5R01AI123047-05). Texas Biomed?s subrecipient expenditures totaled $2.0 million during the period, which represented 5.2% of Texas Biomed?s total research and development expenditures of $38.1 million. Identification as a repeat finding, if applicable This is not a repeat finding. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Texas Biomed will implement a more effective operating procedure for subrecipient invoice approval and timely payment that will include timeline expectations for the initial approval request to the applicable principal investigator upon receipt of invoices from the subrecipient, timeline for following-up with the principal investigator on approval requests, timeline and direction for seeking proxy approval if the principal investigator is unavailable or unable to provide a timely response, and timeline for entering the subrecipient invoice in Texas Biomed financial systems facilitating payment upon approval. Texas Biomed will implement corrective action on June 1, 2023.
Finding 2022-002 ? Cash Management ? Pass-through Entities Identification of the federal program U.S. Department of Defense U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Nos. with amounts provided to subrecipients ? 12.420, 93.242, 93.279, 93.351, 93.855, and 93.866 Federal Award Numbers Grant Period 5R01AI123047-05 8/15/2017-7/31/2022 1R56AG073316-01 9/01/2021-8/31/2023 W81XWH1910496 5/01/2020-10/31/2023 1R01MH130193-01 4/05/2022-2/28/2023 7R01MH116844-04 7/01/2020-1/31/2022 R01MH116844-05 2/01/2022-1/31/2024 5R01DA052845-03 7/01/2022-6/30/2023 5R01DA052845-02 7/01/2021-6/30/2022 2P51OD011133-23 5/01/2021-4/30/2022 2P51OD011133-18 5/01/2016-4/30/2017 5U42OD010442-21 2/01/2022-1/31/2023 5P51OD011133-24 5/01/2022-4/30/2023 5R21AI150445-02 2/01/2021-1/31/2024 5R01AI138587-05 5/01/2022-4/30/2023 5R01AI136831-04 8/01/2022-7/31/2023 5R01AI138587-04 5/01/2021-4/30/2022 5R01AI134245-05 2/01/2022-4/30/2023 1P30AI168439-01 3/10/2022-2/28/2023 5R01AI123047-05 8/01/2020-7/31/2022 7R01AI134245-05 9/01/2021-4/30/2022 5U34AG068482-03 6/01/2022-5/31/2022 U34AG068482 6/01/2021-5/31/2022 5P01AG051428-05 3/01/2020-2/28/2022 1R56AG073316-01 9/01/2021-8/31/2023 5R01AG065546-03 6/01/2022-5/31/2023 1R01AG065546-02 6/01/2021-5/31/2022 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? 2 CFR 200.305(b)(1) requires ?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.? 2 CFR 200.305(b)(3) requires ?when the reimbursement method is used, the Federal 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.? Condition Texas Biomed did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. Texas Biomed paid 2 of 23 subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Cause Texas Biomed?s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 2 of 23 subrecipient payments, Texas Biomed made payments to subrecipients at 50 and 41 days after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (5R01AI123047-05 and 1R56AG073316-01). For 1 additional subrecipient payment, we noted approval by the principal investigator of the subrecipient?s request for reimbursement was made after the payment was made to the subrecipient (5R01AI123047-05). Texas Biomed?s subrecipient expenditures totaled $2.0 million during the period, which represented 5.2% of Texas Biomed?s total research and development expenditures of $38.1 million. Identification as a repeat finding, if applicable This is not a repeat finding. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Texas Biomed will implement a more effective operating procedure for subrecipient invoice approval and timely payment that will include timeline expectations for the initial approval request to the applicable principal investigator upon receipt of invoices from the subrecipient, timeline for following-up with the principal investigator on approval requests, timeline and direction for seeking proxy approval if the principal investigator is unavailable or unable to provide a timely response, and timeline for entering the subrecipient invoice in Texas Biomed financial systems facilitating payment upon approval. Texas Biomed will implement corrective action on June 1, 2023.
Finding 2022-002 ? Cash Management ? Pass-through Entities Identification of the federal program U.S. Department of Defense U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Nos. with amounts provided to subrecipients ? 12.420, 93.242, 93.279, 93.351, 93.855, and 93.866 Federal Award Numbers Grant Period 5R01AI123047-05 8/15/2017-7/31/2022 1R56AG073316-01 9/01/2021-8/31/2023 W81XWH1910496 5/01/2020-10/31/2023 1R01MH130193-01 4/05/2022-2/28/2023 7R01MH116844-04 7/01/2020-1/31/2022 R01MH116844-05 2/01/2022-1/31/2024 5R01DA052845-03 7/01/2022-6/30/2023 5R01DA052845-02 7/01/2021-6/30/2022 2P51OD011133-23 5/01/2021-4/30/2022 2P51OD011133-18 5/01/2016-4/30/2017 5U42OD010442-21 2/01/2022-1/31/2023 5P51OD011133-24 5/01/2022-4/30/2023 5R21AI150445-02 2/01/2021-1/31/2024 5R01AI138587-05 5/01/2022-4/30/2023 5R01AI136831-04 8/01/2022-7/31/2023 5R01AI138587-04 5/01/2021-4/30/2022 5R01AI134245-05 2/01/2022-4/30/2023 1P30AI168439-01 3/10/2022-2/28/2023 5R01AI123047-05 8/01/2020-7/31/2022 7R01AI134245-05 9/01/2021-4/30/2022 5U34AG068482-03 6/01/2022-5/31/2022 U34AG068482 6/01/2021-5/31/2022 5P01AG051428-05 3/01/2020-2/28/2022 1R56AG073316-01 9/01/2021-8/31/2023 5R01AG065546-03 6/01/2022-5/31/2023 1R01AG065546-02 6/01/2021-5/31/2022 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? 2 CFR 200.305(b)(1) requires ?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.? 2 CFR 200.305(b)(3) requires ?when the reimbursement method is used, the Federal 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.? Condition Texas Biomed did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. Texas Biomed paid 2 of 23 subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Cause Texas Biomed?s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 2 of 23 subrecipient payments, Texas Biomed made payments to subrecipients at 50 and 41 days after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (5R01AI123047-05 and 1R56AG073316-01). For 1 additional subrecipient payment, we noted approval by the principal investigator of the subrecipient?s request for reimbursement was made after the payment was made to the subrecipient (5R01AI123047-05). Texas Biomed?s subrecipient expenditures totaled $2.0 million during the period, which represented 5.2% of Texas Biomed?s total research and development expenditures of $38.1 million. Identification as a repeat finding, if applicable This is not a repeat finding. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Texas Biomed will implement a more effective operating procedure for subrecipient invoice approval and timely payment that will include timeline expectations for the initial approval request to the applicable principal investigator upon receipt of invoices from the subrecipient, timeline for following-up with the principal investigator on approval requests, timeline and direction for seeking proxy approval if the principal investigator is unavailable or unable to provide a timely response, and timeline for entering the subrecipient invoice in Texas Biomed financial systems facilitating payment upon approval. Texas Biomed will implement corrective action on June 1, 2023.
Finding 2022-002 ? Cash Management ? Pass-through Entities Identification of the federal program U.S. Department of Defense U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Nos. with amounts provided to subrecipients ? 12.420, 93.242, 93.279, 93.351, 93.855, and 93.866 Federal Award Numbers Grant Period 5R01AI123047-05 8/15/2017-7/31/2022 1R56AG073316-01 9/01/2021-8/31/2023 W81XWH1910496 5/01/2020-10/31/2023 1R01MH130193-01 4/05/2022-2/28/2023 7R01MH116844-04 7/01/2020-1/31/2022 R01MH116844-05 2/01/2022-1/31/2024 5R01DA052845-03 7/01/2022-6/30/2023 5R01DA052845-02 7/01/2021-6/30/2022 2P51OD011133-23 5/01/2021-4/30/2022 2P51OD011133-18 5/01/2016-4/30/2017 5U42OD010442-21 2/01/2022-1/31/2023 5P51OD011133-24 5/01/2022-4/30/2023 5R21AI150445-02 2/01/2021-1/31/2024 5R01AI138587-05 5/01/2022-4/30/2023 5R01AI136831-04 8/01/2022-7/31/2023 5R01AI138587-04 5/01/2021-4/30/2022 5R01AI134245-05 2/01/2022-4/30/2023 1P30AI168439-01 3/10/2022-2/28/2023 5R01AI123047-05 8/01/2020-7/31/2022 7R01AI134245-05 9/01/2021-4/30/2022 5U34AG068482-03 6/01/2022-5/31/2022 U34AG068482 6/01/2021-5/31/2022 5P01AG051428-05 3/01/2020-2/28/2022 1R56AG073316-01 9/01/2021-8/31/2023 5R01AG065546-03 6/01/2022-5/31/2023 1R01AG065546-02 6/01/2021-5/31/2022 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? 2 CFR 200.305(b)(1) requires ?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.? 2 CFR 200.305(b)(3) requires ?when the reimbursement method is used, the Federal 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.? Condition Texas Biomed did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. Texas Biomed paid 2 of 23 subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Cause Texas Biomed?s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 2 of 23 subrecipient payments, Texas Biomed made payments to subrecipients at 50 and 41 days after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (5R01AI123047-05 and 1R56AG073316-01). For 1 additional subrecipient payment, we noted approval by the principal investigator of the subrecipient?s request for reimbursement was made after the payment was made to the subrecipient (5R01AI123047-05). Texas Biomed?s subrecipient expenditures totaled $2.0 million during the period, which represented 5.2% of Texas Biomed?s total research and development expenditures of $38.1 million. Identification as a repeat finding, if applicable This is not a repeat finding. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Texas Biomed will implement a more effective operating procedure for subrecipient invoice approval and timely payment that will include timeline expectations for the initial approval request to the applicable principal investigator upon receipt of invoices from the subrecipient, timeline for following-up with the principal investigator on approval requests, timeline and direction for seeking proxy approval if the principal investigator is unavailable or unable to provide a timely response, and timeline for entering the subrecipient invoice in Texas Biomed financial systems facilitating payment upon approval. Texas Biomed will implement corrective action on June 1, 2023.
Federal Program: U.S. Department of Commerce, Regional Fishery Management Councils CFDA 11.441 Criteria: WPRFMC should minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes pursuant to 2 CFR 200.305(b). The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements for direct program or project costs. In accordance with the Department of Commerce Financial Assistance Standard Terms and Conditions dated November 2020, B.02(b)(1), advance payment requests should be timed such that Federal funds are on hand for a maximum of thirty calendar days before being disbursed. Condition: During our audit, we noted draw downs from the Sustainable Fisheries Fund XII award were on hand in excess of thirty days during the periods April through July 2022 and October through December 2022. Funds from the Sustainable Fisheries Fund XIII award were on hand in excess of thirty days from September through December 2022. The excess funds on hand for these awards ranged from approximately $4,000 to $16,000. Cause: Internal controls over cash management were inadequate to ensure Federal draws did not exceed related expenditures. The untimely reconciliation of award expenditures could have resulted in improper drawdowns of Federal funds. Effect or Potential Effect: Inadequate controls over cash management increases the risk of noncompliance with Federal cash management requirements and with other Federal statutes and regulations related to financial management. Recommendation: We recommend WPRFMC enhance internal controls over cash management to minimize the time elapsing between the drawdown of Federal funds and the related disbursement.
2022-002: U.S. Department of Environment Protection ? Assistance Listing # 66.468 Capitalization Grants for Drinking Water State Revolving Fund (Drinking Water State Revolving Fund Cluster) Lack of Required Written Policies & Procedures ? Compliance Condition & Criteria: The Authority does not currently have all the written policies and procedures in place as required by the Uniform Guidance as it relates to financial management and determining allowability of costs for the federal program (Title 2 U.S. Code of Federal Regulations (CFR) 200.302 & 200.305). In addition CFR sections 200.318, 200.319, and 200.320 require there to be written policies and procedures regarding procurement and conflicts of interest. Effect: Although not likely, the oversight agency could disallow all costs associated with this program. Cause: This is the Authority?s first time subject to the requirements of the Uniform Guidance as they have not had any significant federal grant funding in a number of years. The Authority does have a set of informal policies and procedures that are followed as it relates to financial management, allowability of costs, procurement, and conflicts of interest, and have been very careful to carry out all federal program activities in accordance with established regulations; however the Authority was simply not aware of the requirement that these polices and procedures be documented in writing. Recommendation: We recommend that the Authority work towards getting those policies and procedures documented in writing so that they are in compliance with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: The Authority understand the potential effects of the condition described above and will work towards getting the necessary policies and procedures in place as they relate to federal programs documented in writing.
Finding 2022-001: Noncompliance with Procurement Policy Requirements Programs - CFDA 21.023 Emergency Rental Assistance Program, and CFDA 93.391 Activities to Support State, Tribal, Local, and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis Criteria: As required by 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively), entities are required to maintain written policies, procedures, and standards of conduct (?policies?) for certain areas of its operation. The following sections of the Uniform Guidance require nonfederal entities that receive federal awards to establish written policies, procedures, or standards of conduct: ? Financial management (200.302) ? Federal payment (200.305) ? General procurement standards (200.318) ? Competition (200.319) ? Methods of procurement to be followed (200.320) ? Compensation?fringe benefits (200.431) ? Relocation costs of employees (200.464) ? Travel costs (200.475) Condition: Review of the Organization?s Financial Procedure manual noted it was updated August 2023, with the previous update being done in February 2014 ? prior to the year under audit. The 2014 update did not contain all of the required elements under 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400). Cause: The Financial Procedures have not been updated recently to incorporate the current Federal regulation requirements. Effect: The Organization is not compliant with Federal regulations requiring written policies and procedures. Recommendation: We recommend that the Organization approve and incorporate the policy updates incorporated within the August 2023 updated policies and procedures to ensure compliance with required regulations. Views of Responsible Officials: Management agrees with this recommendation and will review and update its current Financial Procedures to ensure compliance.
Finding 2022-001: Noncompliance with Procurement Policy Requirements Programs - CFDA 21.023 Emergency Rental Assistance Program, and CFDA 93.391 Activities to Support State, Tribal, Local, and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis Criteria: As required by 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively), entities are required to maintain written policies, procedures, and standards of conduct (?policies?) for certain areas of its operation. The following sections of the Uniform Guidance require nonfederal entities that receive federal awards to establish written policies, procedures, or standards of conduct: ? Financial management (200.302) ? Federal payment (200.305) ? General procurement standards (200.318) ? Competition (200.319) ? Methods of procurement to be followed (200.320) ? Compensation?fringe benefits (200.431) ? Relocation costs of employees (200.464) ? Travel costs (200.475) Condition: Review of the Organization?s Financial Procedure manual noted it was updated August 2023, with the previous update being done in February 2014 ? prior to the year under audit. The 2014 update did not contain all of the required elements under 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400). Cause: The Financial Procedures have not been updated recently to incorporate the current Federal regulation requirements. Effect: The Organization is not compliant with Federal regulations requiring written policies and procedures. Recommendation: We recommend that the Organization approve and incorporate the policy updates incorporated within the August 2023 updated policies and procedures to ensure compliance with required regulations. Views of Responsible Officials: Management agrees with this recommendation and will review and update its current Financial Procedures to ensure compliance.
Finding 2022-001: Noncompliance with Procurement Policy Requirements Programs - CFDA 21.023 Emergency Rental Assistance Program, and CFDA 93.391 Activities to Support State, Tribal, Local, and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis Criteria: As required by 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively), entities are required to maintain written policies, procedures, and standards of conduct (?policies?) for certain areas of its operation. The following sections of the Uniform Guidance require nonfederal entities that receive federal awards to establish written policies, procedures, or standards of conduct: ? Financial management (200.302) ? Federal payment (200.305) ? General procurement standards (200.318) ? Competition (200.319) ? Methods of procurement to be followed (200.320) ? Compensation?fringe benefits (200.431) ? Relocation costs of employees (200.464) ? Travel costs (200.475) Condition: Review of the Organization?s Financial Procedure manual noted it was updated August 2023, with the previous update being done in February 2014 ? prior to the year under audit. The 2014 update did not contain all of the required elements under 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400). Cause: The Financial Procedures have not been updated recently to incorporate the current Federal regulation requirements. Effect: The Organization is not compliant with Federal regulations requiring written policies and procedures. Recommendation: We recommend that the Organization approve and incorporate the policy updates incorporated within the August 2023 updated policies and procedures to ensure compliance with required regulations. Views of Responsible Officials: Management agrees with this recommendation and will review and update its current Financial Procedures to ensure compliance.
Program Information: Temporary Assistance for Needy Families (ALN #93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management- 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 nonfederal 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)). As defined in 48 CFR section 52.216 7(b)(1), with relation to supplies and services purchased for use on the contract, ?ordinary course of business? would be in accordance with the terms and conditions of a subcontract or invoice, and ordinarily within 30 days of the request to the federal government for reimbursement. Views of Responsible Officials and Planned Corrective Actions: To stay updated on incoming funds, management will proactively check the Virginia Portal each week to determine if any payments have been made. Management will initiate cross-training sessions for additional staff members to ensure that Club payments can be processed in the absence of the current staff. Management will implement calendar reminders to ensure that payments are promptly presented for processing within five days of receiving the deposit notification. Condition: Certain instances during the year were identified in which federal funds were not passed to subrecipients within 30 days of the funds being transferred to the Alliance from the US Treasury or pass-through entity. Cause: Administrative oversight with respect to Cash Management compliance requirements. Effect or Potential Effect: The Alliance was not in compliance Cash Management compliance requirements. Questioned Costs: None. Context: For 3 of 18 subrecipient payments selected for testing, the Alliance failed to properly disburse funds received from the Department of Health and Human Services to local clubs within the required 30 calendar days. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Alliance enhance its policies and procedures over subrecipient payments to ensure such payments are in accordance with federal regulations.
Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, ?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.? These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)?. Additionally, Uniform Guidance requires non-Federal entities receiving Federal funds to have certain written policies, procedures, and standards of conduct (policies) in place. Condition and Context: The Organization has been administering the federal award for over a decade and has hired knowledgeable programmatic staff who have created an environment which understands the mission and purpose of the program. These individuals have not adequately documented their policies and procedures to fully establish an appropriate system of internal control over compliance. This includes a lack of required written policies as well as inadequate documentation of routine control functions such as those items noted in 2022-002 below. The lack of written policies includes required policies under Uniform Guidance sections ?200.302 (b)(6), ?200.302 (b)(7), ?200.305 (b), ?200.319 (c)(1), ?200.319 (c)(2) and ?200.320 (d)(3). Cause and Effect: The lack of appropriate controls and documentation to support processes surrounding the use of federal funds may result in undetected or uncorrected misstatements or instances of noncompliance. The lack of adequate documentation resulted in finding 2022-002 below. Additionally, as the policies referenced above are not written, the Organization cannot be in compliance with the requirements. Recommendation: The Organization should consider implementing policies, procedures, and internal controls specific to federal awards. Policies should be implemented for all applicable compliance requirements, ensuring that there is appropriate documentation to support the controls taking place. We recommend the policies noted above be written by the Organization, approved by the Board of Directors, and included in the permanent files of the Organization. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation and has implemented their corrective actions as of the date the financial statements were available for issuance.
2 CFR Section 3603.1 gives regulatory effect to the Office of National Drug Control Policy for 2 CFR Section 200.305(b) which states, in part: Non-Federal entities other than states must minimize the time elapsing between the transfer of funds from the United States Treasury or pass-through entity and 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. Section 7.25.2 of the High Intensity Drug Trafficking Area (HIDTA) Program Policy and Guidance states if an advance of funds is requested, details specifying the need for the advance must accompany the request. Documentation of how the advance was spent must be submitted within 21 days of use of funds and prior to another advance or reimbursement request. During our testing, we noted in 5 out of 30 receipts the advance was not spent within 21 days after the advance was deposited into HIDTA?s account. The timeliness of the submissions was not in compliance with the above-mentioned requirements. Failure to properly document how advances are spent per the HIDTA Program Policy and Guidance may result in a reduction of future funding. We recommend the City review this matter with the HIDTA Financial Manager to establish procedures in order to submit support for expenses within the 21-day requirement. HIDTA may consider requesting advances of smaller dollar amounts, or requesting reimbursement rather than advances of funds.
Federal Agency: U.S. Department of Labor Federal Program: Disability Employment Policy Development Federal Award Number: 17.720 Federal Award Year: July 1, 2021 through June 30, 2022; July 1, 2022 through June 30, 2023 Compliance Requirement Allowable Costs (B), Cash Management (C) Criteria or Requirement Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CRF 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award, (Subpart D, Section 200.303), the nonfederal 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. Costs must be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. Program costs must be paid by non-federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)) (i.e., the non-federal entity must disburse funds for program purposes before requesting payment from the federal awarding agency or pass-through entity). Condition Found, Including Perspective For 3 out of 40 payroll samples tested, an internet stipend was charged twice to the program. The amount of the overcharge to the program was $120 and the total sampled payroll population was $98,294. For 1 out of 40 other than payroll samples, compensation for a training session was charged to the program that was not incurred by the entity. The amount of the overcharge to the program was $100 and the total other than payroll sampled population was $188,437. Cause and Possible Asserted Effect Controls were not operating effectively to detect and correct charges to the program that were duplicated or not incurred by the entity. Questioned Costs Questioned costs totaled $220. Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding is a repeat of a finding in the immediately prior audit and if so, the applicable prior year finding number The audit finding is not a repeat finding. Recommendations We recommend that the Company enhance their internal control process to ensure the appropriateness of the expenses charged to the program. Views of Responsible Officials Management agrees with the findings and will implement a more detailed review process of the invoicing prior to submission. This review process will include a review of the expenditures being requested for reimbursement with no materiality threshold.
2022-002 Cash Management - Formula Grants for Rural Areas and Tribal Transit Program ALN 20.509 U.S. Department of Transportation Criteria: 2 CFR ?1200.1 gives regulatory effect to the Department of Transportation for 2 CFR ? 200.305(b)(3) which states reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.208 or when the non-federal entity requests payment by reimbursement. ODOT Federal Transit Administration Section 5311 Rural Transit Program Criteria and Application Instruction, Section VII, Part D provides that the grantee must submit via e-mail quarterly operating data reports on the 15th day of the month following the end of the calendar quarter. Condition: The County was required to submit quarterly invoices by the 15th day of the month following the end of the calendar quarter. Context: During our review of the quarterly reports, we noted the County had submitted all 2022 reports late. Effect: The County was not in compliance with cash management requirements in 2022. Cause: Lack of sufficient internal controls over the reporting requirements of the Rural Transit Program. Recommendation: We recommend the County enhance its internal controls over cash management requirements. View of Responsible Officials: See Corrective Action Plan
COVID-19 Education Stabilization Fund Higher Education Emergency Relief Fund Federal Assistance Listing Number 84.425 U.S. Department of Education Criteria or Specific Requirement ? Cash Management (2 CFR 200.305 (b)) Condition ? The Organization did not disburse funds drawn down within 3 calendar days Questioned Costs ? None. Context ? Out of a population of fifteen cash draws, a sample of two draws were selected for testing. The sampling methodology used is not and is not intended to be statistically valid. Of the two draws tested, one was not disbursed within the required timeframe of three calendar days. Effect ? The System's cash management system is not operating within the requirements determined by Department of Education (DOE). Cause ? Management of the Organization does not have sufficient controls in place to ensure funds drawn in advance are disbursed within the required timeframe. Identification as a Repeat Finding ? Not applicable. Recommendation - Management should review cash management processes and establish appropriate controls to ensure funds drawn in advance are disbursed within required timeframes. Views of Responsible Officials and Planned Corrective Actions ? SoutheastHEALTH ("SEH") has developed an organization policy for cash management for federally sponsored grant programs. SEH will generally use the reimbursement method unless there is an immediate cash need to minimize the time elapsing between the drawdown and disbursement of funds.
2022-001 ? Rent Reasonableness Federal Program Information: Department of Housing and Urban Development ? Housing Voucher Cluster: ALN ? 14.871 Housing Choice Voucher Criteria: The following CFR(s) apply to this finding: 2 CFR 200.514(c), 2 CFR section 200.305(b)(3). Condition: During audit procedures, it was identified that the Housing Authorities rent reasonableness calculation does not establish comparability. Cause: The Housing Authority does not have the necessary internal controls over compliance. Effect: The Housing Authority does not have the correct system in place to establish comparability correct based on reasonable rent in the area. Identification of Questioned Costs: None identified. Context: The entire population of the tenants that were sampled during field work. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit implement internal control processes and procedures to ensure that reasonable rent can be established with comparability in the area. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Melody Ackerman.
Finding 2022-002 ? Lack of Subrecipient Monitoring, Assistance Listing 10.309, Specialty Crop Research Initiative - Cash Management Criteria: 2 CFR Section 200.305(b)(1) 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. Pass through entities are also required to monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves the performance goals. Condition: Subrecipients were advanced funds according to an approved budget with semi-annual reporting requirements per their subaward agreements. Of the about $359,700 at December 31, 2022 in outstanding advances made to sub-recipients during the year, a significant amount of approximately $223,500 remains unspent as of July 2023. Cause of Condition: Sub-award agreements only require semi-annual reporting which does not provide the Organization the ability to adequately monitor and determine if funds have been expended timely on allowable costs and activities by the sub-recipients. Due to the impact of COVID-19 on the labor force, and difficulties of hiring qualified persons, funds advanced for salary expenses remain unspent. Potential Effect: As a result of the condition above, use of funds passed to subrecipients cannot be monitored timely which could result in unallowable costs, waste and abuse. These conditions may provide opportunities for errors, fraud or waste and abuse to occur and cause material misstatements of the financial statements and SEFA. Questioned Costs: None Context: Management lacks a full understanding of all federal compliance requirements. Recommendation: Recommend Management include in subaward agreements and conduct regular monitoring of subrecipients for timely spending of federal awards and adherence with federal cost principles and compliance requirements. We further recommend one of the reporting periods coincide with the Organization?s fiscal year end to ensure a complete and accurate schedule of expenditures of federal awards.
2022-003 Cash Management U.S. Department of the Interior (passed through the State of Louisiana?s Coastal Protection and Restoration Authority) CFDA 15.435, Gulf of Mexico Energy Security Act (GOMESA) Criteria: Per 2 CFR section 200.305(b)(3), under the reimbursement method, program costs must be paid by non-Federal entity funds before submitting a payment request. Condition: The District submitted a reimbursement request that was in violation of 2 CFR section 200.305(b)(3) as described in the criteria above. Context/Questioned Costs: The District requested $372,596 of reimbursement on a reimbursement request that was submitted prior to payment of the costs by the District. We consider the total of $372,596 to be questioned costs. Cause: Inconsistent application of cash management compliance requirement. Effect: Possible noncompliance with cash management compliance requirements could result in costs being allowed by the granting agency. Recommendation: Policies and procedures should be implemented to ensure that reimbursement requests are submitted based on the requirement outlined in 2 CFR 200.305(b)(3). Views of Responsible Officials and Planned Corrective Actions: This information is in the District?s separate Management?s Corrective Action Plan for Current Year Findings.
2022-005 – Department of Health and Human Services CFDA #93.829 Section 223 Demonstration Programs to Improve Community Health Services (CCBHC) Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Criteria – CFR 200.303 establishes that the entity must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and 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 regarding procurement. The entity should also maintain effective internal controls to determine that payments of federal awards are not made to vendors who are suspended or debarred from federal contracts. Condition – Rimrock Foundation does not have formally documented written internal control procedures over compliance with federal award programs to meet the requirements noted above regarding compliance with federal regulations for procurement, suspension and debarment. Cause – Rimrock Foundation was not aware of certain requirements under 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements regarding procurement for federal awards and did not implement controls to review vendors for suspension or debarment. Effect – Inadequate documentation of controls over these compliance areas may result in a reasonable possibility that Rimrock Foundation may not be able to detect and correct noncompliance with federal regulations regarding the use of federal funds in a timely manner and could contract with a vendor who has been suspended and debarred from federal contracts. Questioned Costs – None reported Context/Sampling – A nonstatistical sample of 3 contracts was selected, from expenditures in the reports submitted to the Substance Abuse and Mental Health Services Administration, for testing of controls over procurement of contracts which use federal funds. None of the contracts were reviewed for compliance with federal regulations and none of the vendors were reviewed for suspension and debarment prior to submission. Repeat Finding from Prior Year – Yes. Recommendation –Rimrock Foundation should establish and maintain effective internal control over federal awards that provides reasonable assurance that it is managing all federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. In addition, 2 CFR 200.302(b)(6) establishes that the financial management system must provide written procedures to implement the requirements of 2 CFR 200.305 regarding procurement. As part of those controls, Rimrock Foundation should also determine that payments of federal awards are not made to vendors who are suspended or debarred from federal contracts. Views of Responsible Officials – Management agrees with the finding.
#2022-005 - Major Federal Award Finding - Cash Management Nature of Finding: Compliance Finding - Cash Management and Material Weakness in Internal Controls Over Compliance This finding is issued in conjunction with #2022-004 above, with the questioned costs indicated below being the result of both errors (amounts were excluded from questioned costs in the previous finding to avoid duplication). Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $30,000 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management in this circumstance were related to one vendor that was not paid within a reasonable amount of time of the Organization being reimbursed for the costs. Questioned costs include the one invoice that was charged to the grant for this vendor during the year ended December 31, 2022 and was not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: The Organization issued a check to vendor, but the vendor did not receive or cash the check. The replacement check was not issued until months later, during the next fiscal (and grant) year. Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursement. Controls were also not in place to detect this significant check that remained outstanding for a considerable length of time. This particular circumstance was likely an isolated incident due to the unique circumstance of this one payment. However, the lack of controls does not appear to be isolated. Effect: Grant funds were received well in advance of the payment of the invoice identified above. The lack of controls could continue to result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend procedures be established that incorporate controls to review expenditures for payment prior to submitting requests for reimbursement, and that outstanding checks (and other reconciling items) be resolved within a reasonable period of time. Evidence of control activities including review should be documented and maintained. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to establish procedures that incorporate controls to review expenditures for payment prior to submitting request for reimbursement, and that the outstanding checks (and other reconciling items) be resolved in a reasonable period of time. Such evidence of control activities including review will be documented and maintained.
#2022-005 - Major Federal Award Finding - Cash Management Nature of Finding: Compliance Finding - Cash Management and Material Weakness in Internal Controls Over Compliance This finding is issued in conjunction with #2022-004 above, with the questioned costs indicated below being the result of both errors (amounts were excluded from questioned costs in the previous finding to avoid duplication). Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures. Questioned Costs: $30,000 Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management in this circumstance were related to one vendor that was not paid within a reasonable amount of time of the Organization being reimbursed for the costs. Questioned costs include the one invoice that was charged to the grant for this vendor during the year ended December 31, 2022 and was not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures. Cause/Context: The Organization issued a check to vendor, but the vendor did not receive or cash the check. The replacement check was not issued until months later, during the next fiscal (and grant) year. Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursement. Controls were also not in place to detect this significant check that remained outstanding for a considerable length of time. This particular circumstance was likely an isolated incident due to the unique circumstance of this one payment. However, the lack of controls does not appear to be isolated. Effect: Grant funds were received well in advance of the payment of the invoice identified above. The lack of controls could continue to result in requests for reimbursement being submitted for unpaid expenditures. Recommendation: We recommend procedures be established that incorporate controls to review expenditures for payment prior to submitting requests for reimbursement, and that outstanding checks (and other reconciling items) be resolved within a reasonable period of time. Evidence of control activities including review should be documented and maintained. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to establish procedures that incorporate controls to review expenditures for payment prior to submitting request for reimbursement, and that the outstanding checks (and other reconciling items) be resolved in a reasonable period of time. Such evidence of control activities including review will be documented and maintained.
U.S. DEPARTMENT OF AGRICUTLTURE KANSAS DEPARTMENT OF HEALTH and ENVIRONMENT Special Supplemental Nutrition Program for Women, Infant, & Children – CFDA No. 10.557 Grant period: Year Ended December 31, 2022 U.S. DEPARTMENT OF HEALTH and HUMAN SERVICES KANSAS DEPARTMENT OF HEALTH and ENVIRONMENT Epidemiology and Laboratory Capacity for Infections Disease – CFDA No. 93.323 Grant period: Year Ended December 31, 2022 SIGNIFICANT DEFICIENCY 2022-004: Condition and Context: The County does not have a complete set of written cash management policies and procedures as required by the Uniform Guidance. The lack of written procedures did not result in any material noncompliance, fraud or abuse with respect to the major program. Criteria: The Uniform Guidance requires Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, to follow the cash management standards set out at 2 CFR section 200.305. The County must have a complete set of written cash management policies, which conform to applicable Federal statutes and the cash management requirements identified in 2 CFR part 200. Cause: The County was unaware of the written cash management policy requirements required by the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program requirements. Recommendation: Management should determine the scope of written policies needed for compliance with all federal programs and develop policies and procedures to comply with the Uniform Guidance. Grantee Response: Management agrees with the finding and recommendation. The County’s existing policies are currently under review by management and staff to determine what updates/changes are necessary in order to meet the Uniform Guidance requirements. Once any updates/changes are drafted, the policy will be presented to the Governing Body for review and approval.
U.S. DEPARTMENT OF AGRICUTLTURE KANSAS DEPARTMENT OF HEALTH and ENVIRONMENT Special Supplemental Nutrition Program for Women, Infant, & Children – CFDA No. 10.557 Grant period: Year Ended December 31, 2022 U.S. DEPARTMENT OF HEALTH and HUMAN SERVICES KANSAS DEPARTMENT OF HEALTH and ENVIRONMENT Epidemiology and Laboratory Capacity for Infections Disease – CFDA No. 93.323 Grant period: Year Ended December 31, 2022 SIGNIFICANT DEFICIENCY 2022-004: Condition and Context: The County does not have a complete set of written cash management policies and procedures as required by the Uniform Guidance. The lack of written procedures did not result in any material noncompliance, fraud or abuse with respect to the major program. Criteria: The Uniform Guidance requires Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, to follow the cash management standards set out at 2 CFR section 200.305. The County must have a complete set of written cash management policies, which conform to applicable Federal statutes and the cash management requirements identified in 2 CFR part 200. Cause: The County was unaware of the written cash management policy requirements required by the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program requirements. Recommendation: Management should determine the scope of written policies needed for compliance with all federal programs and develop policies and procedures to comply with the Uniform Guidance. Grantee Response: Management agrees with the finding and recommendation. The County’s existing policies are currently under review by management and staff to determine what updates/changes are necessary in order to meet the Uniform Guidance requirements. Once any updates/changes are drafted, the policy will be presented to the Governing Body for review and approval.
Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance Federal Agency: U.S. Department of Defense Federal Program Name: Natural Resource Survey and Habitat Enhancement Assistance Listing Number: 12.005 Federal Award Identification Number and Year: H79TI083313 - 2020 Pass-Through Agency: U.S. Army Corps of Engineers, Seattle District Pass-Through Number(s): W912DW-20-2-0003 Award Period: September 28, 2020, through September 27, 2025 Criteria or specific requirement: 2 CFR 200.302(a) on Financial management states that "... the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award". The current form of documentation did not clearly agree between the invoiced amount and what was presented in the general ledger for the period requested for reimbursement. In addition, 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 or redemption of checks, warrants, or payment by other means". Condition: During our testing, it was noted that each of the 4 samples selected did not include sufficient documentation to agree all amounts requested for reimbursement for the month in question to the expenditures listed in the general detail by program. Questioned costs: Unknown. Context: A sample of 4 monthly reimbursement requests were taken from a population of 12. Of the 4 sampled, each were insufficiently supported to agree the amounts requested for reimbursement for the month in question to the expenditures listed in the general detail by program. Cause: The Organization is using a cumulative profit and loss to file monthly reimbursement requests (beginning of the year through the reimbursement month). In addition, reimbursement requests are not always prepared and filed each month. In these instances, The Organization will often catch up on expenditures that had been made in previous months and request them in the current period. Effect: The Organization is currently in noncompliance with federal regulations with regard to adequate documentation and the reduction of time between expenditures being made and requesting for federal reimbursement. Without adequate documentation in place to ensure costs are evidenced and reconcile to the expenditures documented in the underlying accounting information that is used to prepare the SEFA, the Organization could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement that the Organization is entitled to under the terms of the grant. Delayed reimbursement requests puts the Organization at continued noncompliance with federal regulations and can result in delayed payment, putting further financial strain on the Organization. Repeat Finding: No. Recommendation: CLA recommends that the Organization move away from using a cumulative profit and loss report and instead run monthly general ledger details by program as support for their monthly reimbursement requests. This will enhance clarity of costs attributable to each monthly period and reduces the chance that costs will be missed when requesting for reimbursement. Any reconciling transactions can be clearly tracked in an Excel file of the general ledger detail by program. In addition, CLA recommends that the Organization emphasize to program management staff the importance of filing reimbursement requests each month and in a timely manner to reduce administrative and financial burden. Views of responsible officials: There is no disagreement with the audit finding.
2022-007: Cash Management - Material Weakness – Originated in 2019 Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119-22-00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020-2024 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition: The Organization has a policy which includes the Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the sixteen (16) drawdown requests that we tested, there was no evidence of review and approval for drawdown. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.