Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development 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. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures to implement the requirements of 2 CFR § 200.305 Payment.
Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development 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. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures to implement the requirements of 2 CFR § 200.305 Payment.
Finding 2022–002: Cash Management Federal Department: U.S. Department of Education Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education Federal Program Name: Twenty-First Century Community Learning Centers Assistance Listing Number: 84.287 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request. Condition/Context During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements. Exceptions noted in 30 of 30 tested reimbursement requests: For all 30 requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system generated expenditures reports, instead of actual invoices, payroll registers, and payment support. For one request, we did not receive any supporting documentation to substantiate the amount requested. For two requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission. Cause Based on our discussions with management, this finding occurred due to staff turnover. This resulted in consistent documentation not maintained to trace the reimbursement submissions to pass-through entities. Effect The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements. Questioned Costs Unable to determine. Identification of Repeat Findings Not a repeat finding. Recommendation We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations. Views of Responsible Officials and Corrective Action Plan CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 17-18.
Finding 2022–002: Cash Management Federal Department: U.S. Department of Education Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education Federal Program Name: Twenty-First Century Community Learning Centers Assistance Listing Number: 84.287 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request. Condition/Context During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements. Exceptions noted in 30 of 30 tested reimbursement requests: For all 30 requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system generated expenditures reports, instead of actual invoices, payroll registers, and payment support. For one request, we did not receive any supporting documentation to substantiate the amount requested. For two requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission. Cause Based on our discussions with management, this finding occurred due to staff turnover. This resulted in consistent documentation not maintained to trace the reimbursement submissions to pass-through entities. Effect The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements. Questioned Costs Unable to determine. Identification of Repeat Findings Not a repeat finding. Recommendation We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations. Views of Responsible Officials and Corrective Action Plan CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 17-18.
Finding 2022–002: Cash Management Federal Department: U.S. Department of Education Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education Federal Program Name: Twenty-First Century Community Learning Centers Assistance Listing Number: 84.287 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request. Condition/Context During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements. Exceptions noted in 30 of 30 tested reimbursement requests: For all 30 requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system generated expenditures reports, instead of actual invoices, payroll registers, and payment support. For one request, we did not receive any supporting documentation to substantiate the amount requested. For two requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission. Cause Based on our discussions with management, this finding occurred due to staff turnover. This resulted in consistent documentation not maintained to trace the reimbursement submissions to pass-through entities. Effect The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements. Questioned Costs Unable to determine. Identification of Repeat Findings Not a repeat finding. Recommendation We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations. Views of Responsible Officials and Corrective Action Plan CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 17-18.
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.
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.
Finding 2022-04 – Noncompliance with Cash Management and Prompt Payment Requirements Program Number: 93.224, 93.225, 93.493, 93.527 Type of Finding: Internal Control, Compliance and Material Weakness Condition During our audit of cash management and disbursement practices, we noted that the organization maintains accounts payable balances that remain outstanding for several months after invoice dates, indicating that vendors are not being paid in a timely manner. These delays were observed across multiple transactions and were not isolated in nature. The aging of payables suggests that payments are not processed in accordance with established timelines, and there is no evidence of a formal process to monitor or enforce timely disbursement of obligations. In addition, management was unable to provide documentation demonstrating that payments related to federally funded expenditures were made promptly after costs were incurred and recorded. These conditions raise concerns that the organization is not complying with prompt payment requirements and may not be managing federal funds in accordance with cash management standards, particularly where funds are drawn down but not disbursed timely. Criteria Under 2 CFR 200.305 (Cash Management), non-federal entities must minimize the time elapsing between the drawdown of federal funds and disbursement of those funds. Additionally, federal regulations require compliance with applicable Prompt Payment Act requirements (31 U.S.C. 3901–3907), which mandate that vendors be paid in a timely manner to avoid unnecessary delays, penalties, or inefficiencies. Effective internal control also requires that obligations be paid when due, that liabilities be monitored, and that payment processes ensure compliance with both federal and contractual requirements. Cause These deficiencies appear to result from inadequate cash management practices, lack of monitoring of accounts payable aging, insufficient oversight of disbursement processes, and possible liquidity or operational constraints. Additionally, there is no evidence of formal policies or controls to ensure compliance with prompt payment requirements. Effect These conditions create significant risks, including: ▪ Noncompliance with federal cash management requirements ▪ Potential violation of Prompt Payment Act provisions CARESTL HEALTH SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 43 SECTION III – FEDERAL AWARD FINDINGS AND QUESTION COSTS (Continued) ▪ Increased risk that federal funds are not disbursed timely after drawdown ▪ Exposure to interest penalties or vendor disputes ▪ Inefficient use of federal resources and potential cash flow mismanagement ▪ Increased likelihood of audit findings, questioned costs, and regulatory scrutiny Questioned Costs Likely Questioned Costs: Undeterminable The failure to process payments timely and monitor accounts payable aging constitutes a material weakness in internal control over compliance and results in noncompliance with federal cash management requirements. Recommendation We recommend that management: ▪ Implement procedures to ensure timely payment of all obligations, particularly those related to federal programs ▪ Establish accounts payable aging monitoring and review processes, with escalation of overdue items ▪ Align disbursement practices with 2 CFR 200.305 to ensure funds are drawn and disbursed promptly ▪ Develop and enforce policies consistent with the Prompt Payment Act, including defined payment timelines ▪ Perform periodic reviews of cash flow and payment cycles to ensure compliance ▪ Assign oversight responsibility to ensure timely processing and documentation of payments Strengthening cash management practices will improve compliance with federal requirements and enhance overall financial control. Management Response Management acknowledges the auditor’s observations regarding delayed vendor payments and agrees that improvements in cash management practices are necessary. While we recognize that certain invoices remained outstanding longer than desired, these delays were not the result of intentional noncompliance or disregard for federal requirements. Rather, they were a direct consequence of the organization’s severe operational constraints during the audit period. CARESTL HEALTH SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 44 SECTION III – FEDERAL AWARD FINDINGS AND QUESTION COSTS (Continued) As outlined in our financial management response to HRSA, CareSTL Health was simultaneously navigating multiple federally driven demands, including an unexpected and unannounced full operational site visit and the pressures associated with reimbursement only funding. These conditions significantly strained liquidity, staffing capacity, and administrative bandwidth. The reimbursement only structure, in particular, created unavoidable timing gaps between the incurrence of costs and the availability of cash to satisfy vendor obligations. These challenges were further compounded by staffing shortages and the inability to retain personnel dedicated to financial operations due to lack of funding. Management agrees with the recommendations provided and has already begun implementing corrective actions to strengthen cash management and ensure timely disbursement of obligations. These actions include: ▪ Establishing formal accounts payable aging review processes ▪ Implementing structured monitoring and escalation procedures for overdue items ▪ Aligning drawdown and disbursement practices with 2 CFR 200.305 ▪ Developing Prompt Payment Act–aligned policies with defined timelines ▪ Conducting periodic cash flow reviews to ensure compliance ▪ Assigning clear oversight responsibility for payment processing and documentation CareSTL Health is committed to improving the timeliness of payments and enhancing internal controls to ensure full compliance with federal cash management and prompt payment requirements moving forward.
Federal Agency: U.S. Department of the Treasury Federal Programs: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award Numbers: SLFRP3168/5205 Award Years: 2021 Type of Finding: Material weakness in internal control over compliance and material noncompliance Criteria: In accordance with 2 CFR Section 200.305, advanced federal funds held in depository institutions must be deposited and maintained in insured accounts. Condition and Context: Internal control procedures related to monitoring insured cash balances were inadequate. The Council had advanced federal funds (deferred revenue) of $10,512,764 as of September 30, 2022. Uninsured and uncollateralized cash balances were $9,328,634 as of September 30, 2022. Cause: Lack of internal controls over the monitoring of insured cash balances. Effect: Failure to follow granting agency requirements could result in loss of federal funding or at a minimum, the Council having to repay portions of the advanced federal funds. Questioned Costs: None. Repeat Finding: This is a repeat of Finding 2021-001, and since this is a repeat finding we believe it to be a systemic issue. Recommendation: We recommend that management that the Council establish policies and controls over special tests and provisions related to monitoring advanced funds to ensure federal funds are properly held in fully insured depository accounts. Management’s Response: Management concurs with this finding. See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Homeland Security/FEMA Pass-through Agency: Various Federal Program: Emergency Food and Shelter National Board Program ALN Number: 97.024 Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance Criteria or specific requirement: Non-Federal Entities Other Than States Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). 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 US 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 (2 CFR section 200.305(b)(1)). Condition: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Cause: Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Effect: Division’s will be in noncompliance with its cash management compliance. Questioned costs: Cannot be determined. Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Views of responsible officials: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division See corrective action plan.
2022-002 COVID-19 Higher Education Emergency Relief Fund (HEERF) Condition: Repeat finding. The College did not have adequate internal controls in place to ensure proper record keeping for grant funds. Criteria: U. S. Department of Education cash management requirements are consistent with 2 CFR 200.305 which requires a grantee minimize the time elapsing between the transfer of funds from the United States Treasury and the disbursement by the non-Federal entity. According to the Higher Education Emergency Relief Fund (HEERF) II Frequently Asked Questions (FAQ) #17, grantees must pay the incurred obligation (liquidate) within 3 calendar days for HEERF ALN 84.425F (Institutional Portion) and within 15 days for HEERF ALN 84.425E (Student Portion) of receiving the funds. The design and implementation of proper internal controls and the corresponding proper record keeping procedures are essential to comply with cash management requirements. Cause: It was determined that the College drew down funds expended under both ALN 84.425E and ALN 84.425F from the wrong grants management system accounts. A portion of expenses for ALN 84.425E were drawn from and/or were recorded to the sub-fund for ALN 84.425F and a portion of expenses for ALN 84.425F were drawn from and/or were recorded to the sub-fund for ALN 84.425E. This incorrect recording resulted in substantial positive cash balances reported during the fiscal year under ALN 84.425F which were mostly offset with substantial negative cash balances reported under ALN 84.425E. However, at one point during the fiscal year, this incorrect reporting and drawing down of funds resulted in an overall substantial cash balance recorded for the combined funds." Effect: Due to a lack of properly designed and implemented internal controls, even though based on our test, their were no repeat instances of the College drawing down funds from the wrong grants, it was determined that the College has not put proper controls in place as of September 30, 2022 to sufficiently eliminate this finding in the current audit period. Recommendation: The College should design and implement internal controls to ensure proper record keeping for grant funds and monitor cash balances by individual grants. Views of Responsible Officials: Management agrees with this finding and has taken corrective action
Item 2022-001 Written policies, procedures, and standards of conduct Water and Waste Disposal Systems for Rural Communities Assistance Listing Number 10.760 U.S. Department of Agriculture Grant period: Year ended September 30, 2022 Questioned Costs ? $0 Condition ? The Board does not have all of the written policies, procedures and standards of conduct required by UG. Criteria ? Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non-Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: ? ? 200.302 Financial management ? ? 200.305 Payment ? ? 200.319 Competition ? ? 200.320 Methods of procurement to be followed ? ? 200.430 Compensation?personal services ? ? 200.431 Compensation?fringe benefits Cause of Condition ? The Board has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Potential Effect of Condition ? Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation ? We recommend that the Board implement the required written policies and procedures. Audit finding 2022-001 relates to prior year 2021-001 finding. Updated reference number to current audit year 2022.
Finding 2022-001 ? Return of Interest Earned on Advance Payments Cluster: Research & Development Federal Agency: Department of Defense Assistance Listing Program Title and Number: Military Medical Research and Development ? 12.420 Award Name: Beta Blockers for the Prevention of Acute Exacerbations of COPD Award Identifying Number: W81XWH-15-1-0705 Award Year: 2021-2022 Criteria: UAB is subject to cash management compliance requirements pertaining to the use of advanced funds. 2 CFR section 200.305(b)(9) requires that interest earned by non-federal entities other than states on advances of federal funds be remitted annually to the US Department of Health and Human Services, Payment Management System. Up to $500 per year may be kept for administrative expenses. Condition: While testing UAB?s compliance with Cash Management compliance requirements for the R&D cluster, we identified that UAB had earned interest in excess of $500 (approximately $51,000 in total) on funds associated with one of only two advance payment method awards, but that this interest had not been remitted to the PMS system as required. Questioned Costs: $50,500 Cause: Although UAB does have a process to identify and remit interest earned on advanced payment awards in excess of $500, this process was interrupted by both an award extension request and staff turnover. Effect: Interest earned on advanced funds was not returned in a timely manner. Recommendation: The University should establish procedures to ensure that interest earned on advanced funds is identified and returned annually in accordance with 2 CFR section 200.305(b)(9). View of Responsible Officials: Refer to Management?s Corrective Action Plan for management?s view and corrective action plan for the finding described above.
Finding 2022-001 Lack of Internal Control Over Cash Management Federal Agency: U.S. Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Award Numbers: SLFRP3171/4774 Award Year: 2021 Type of Finding: Material weakness in internal control over compliance and material noncompliance Criteria: The requirement for cash management as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Village?s cash balances for all governmental funds amounted to $6,020,657 at September 30, 2022. The unearned revenues were $6,488,378 which resulted in a shortfall of $467,721. The unearned revenue for the CSLFRF was $6,281,497. Cause: Lack of internal controls over cash management. Effect: The Village requested and received advances for various federal programs to cover expenditures. Deposits were used to fund other programs of the Council. Repeat Finding: This is a repeat of Finding 2021-001, and since it is a repeat Finding we believe this to be a systemic issue. Recommendation: We recommend that the Village monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash and investments. Management?s Response: Management concurs with this finding. See corrective action plan. Questioned Costs: $467,721, which is the shortfall between cash and the unearned revenue balances across all government funds.
2022-001 ? Cash Management Program: AL # 19.519 ? Overseas Refugee Assistance Program for Near East, Direct Award Number: SPRMC021CA3120, SPRMCO22CA0166 Sponsor Agency: U.S. Department of State Criteria: Non-Federal entities must minimize the time elapsing between the transfer of funds from the US Treasury. The non-federal agency must demonstrate the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability. The non-Federal entity must disburse funds available before requesting additional cash payments. Citation: 2 CFR 200.305 Condition: RSN does not have written procedures as required as outlined above. The process RSN uses to make requests for advance payments is to perform a detailed analysis of all expenses anticipated for the quarter. Cause: As a small entity, formal policies were not considered feasible. Effect: There is a risk that the time elapsing between transfer of funds from the U.S. Treasury and the disbursements to vendors may not be minimized. Questioned Costs: None. Context: The amount of cash on hand at the end of each period prior to a drawdown ranged from $12,777 to $174,531 on contract SPRMCO21CA3120. Cash on hand at year end for contract SPRMCO22CAO166 was $485,741. Repeat Finding: No Recommendation: We recommend that management create written procedures to minimize the time elapsing between transfer of funds from the U.S. Treasury. Requests for quarterly advances should factor in cash unspent at the end of the most recent period. Views of Responsible Officials: See Corrective Action Plan attached.
2022-001 ? Cash Management Program: AL # 19.519 ? Overseas Refugee Assistance Program for Near East, Direct Award Number: SPRMC021CA3120, SPRMCO22CA0166 Sponsor Agency: U.S. Department of State Criteria: Non-Federal entities must minimize the time elapsing between the transfer of funds from the US Treasury. The non-federal agency must demonstrate the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability. The non-Federal entity must disburse funds available before requesting additional cash payments. Citation: 2 CFR 200.305 Condition: RSN does not have written procedures as required as outlined above. The process RSN uses to make requests for advance payments is to perform a detailed analysis of all expenses anticipated for the quarter. Cause: As a small entity, formal policies were not considered feasible. Effect: There is a risk that the time elapsing between transfer of funds from the U.S. Treasury and the disbursements to vendors may not be minimized. Questioned Costs: None. Context: The amount of cash on hand at the end of each period prior to a drawdown ranged from $12,777 to $174,531 on contract SPRMCO21CA3120. Cash on hand at year end for contract SPRMCO22CAO166 was $485,741. Repeat Finding: No Recommendation: We recommend that management create written procedures to minimize the time elapsing between transfer of funds from the U.S. Treasury. Requests for quarterly advances should factor in cash unspent at the end of the most recent period. Views of Responsible Officials: See Corrective Action Plan attached.
2022-001 ? Cash Management Program: AL # 19.519 ? Overseas Refugee Assistance Program for Near East, Direct Award Number: SPRMC021CA3120, SPRMCO22CA0166 Sponsor Agency: U.S. Department of State Criteria: Non-Federal entities must minimize the time elapsing between the transfer of funds from the US Treasury. The non-federal agency must demonstrate the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability. The non-Federal entity must disburse funds available before requesting additional cash payments. Citation: 2 CFR 200.305 Condition: RSN does not have written procedures as required as outlined above. The process RSN uses to make requests for advance payments is to perform a detailed analysis of all expenses anticipated for the quarter. Cause: As a small entity, formal policies were not considered feasible. Effect: There is a risk that the time elapsing between transfer of funds from the U.S. Treasury and the disbursements to vendors may not be minimized. Questioned Costs: None. Context: The amount of cash on hand at the end of each period prior to a drawdown ranged from $12,777 to $174,531 on contract SPRMCO21CA3120. Cash on hand at year end for contract SPRMCO22CAO166 was $485,741. Repeat Finding: No Recommendation: We recommend that management create written procedures to minimize the time elapsing between transfer of funds from the U.S. Treasury. Requests for quarterly advances should factor in cash unspent at the end of the most recent period. Views of Responsible Officials: See Corrective Action Plan attached.
Finding 2022-001 ? Non-compliance with Cash Management Requirements of the Capital Fund Program (Other Non-Compliance) Capital Fund Program ? Assistance Listing No. 14.872, Grant Period: Fiscal Year-End September 30, 2022 Criteria Uniform Guidance Cash Management requirements of the Capital Fund Program require the Authority to minimize time elapsing between the transfer of funds from the U.S. Treasury and disbursement to the applicable contractors or vendors (2 CFR Section 200.305.b). Condition As of the beginning of fiscal year 2022 the Authority held $122,491 of unexpended grant draws, which were allocated within the grant budgets for capital improvement expenditures, from the 2019 and 2020 Capital Fund Program grants. Instead of funding capital improvement expenditures from these unexpended funds during the fiscal year 2022, the Authority continued to draw funds from Capital Fund Program grants to fund fiscal year 2022 capital expenditures. Also, during fiscal year 2022 the Authority drew down an additional $141,810 of grant draws, which were allocated within the grant budgets for capital improvement expenditures, from the 2019; 2020 and 2021 Capital Fund Program grants in excess of applicable fiscal year 2022 grant expenditures, which resulted in cumulative unexpended grant draws (unearned grant revenue) as of September 30, 2022 of $264,301. Questioned Costs - None Cause The failure to expend the $122,491 of unexpended grant draws which were held as of the beginning of the fiscal year appears to be a result of A) the Authority not posting applicable prior year audit adjustments into its general ledger accounting software, and B) failure to attain an understanding of certain account balances as of the beginning of the fiscal year. The excess, unexpended draw-downs which occurred during fiscal year 2022 of $141,810 appear to be a result of a failure to adequately track grant expenditures to applicable grants, as these expenditures of $141,810 were funded during fiscal year 2022 with grant draws from a HOME Investment Partnerships Program grant. Effect Non-compliance with Uniform Guidance Cash Management requirements of the Capital Fund Program. Recommendation We recommend that the Authority expend the unexpended Capital Fund Program grant proceeds held, prior to drawing down additional funding from Capital Fund Program grant allocations which are budgeted for capital improvements. Management?s Response The Authority will expend the unexpended Capital Fund Program grant proceeds held, prior to drawing down additional funding from Capital Fund Program grant allocations which are budgeted for capital improvements. The Authority?s Executive Director, Jeff Sklet has assumed the responsibility of executing this corrective action as of March 31, 2024.
Finding 2022-001 Lack of Internal Controls over Cash Management Federal Agency: U.S. Department of the Interior Federal Programs: Tribal Management Subsistence Assistance Listing Numbers: 15.036 Award Numbers: A21AV01012, A20AV01058 Award Years: 2021, 2020, respectively Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: The requirements for cash management contained in 2 CFR Section 200.305 state advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that grant funds drawn down were used for grant expenditures in the program, which received the program advances. We compared the unearned revenue balances of the grant funds with the available cash balances at year end. AITRC?s cash balances amounted to $683,313 at September 30, 2022. The unearned revenues were $713,247, which resulted in a shortfall of $29,934. The Tribal Management Subsistence Program had unearned revenues of $543,071 at September 30, 2022. Cause: Inadequate internal controls over the use of restricted program funds. The shortfall also results from the timing difference from when AITRC pays for expenditures and receives reimbursement from granting agencies. Effect: Unearned revenue balances exceeded cash balances at year end. Questioned Costs: $29,934, which is the difference between deferred revenue and cash balances as of September 30, 2022. Repeat Finding: This is believed to be an isolated incident as this is not a repeat finding. Recommendation: Management should implement internal controls and policies to limit the timing between cash outflows and reimbursement from granting agencies. Management Response: Management agrees with this finding, see Corrective Action Plan.
2022-004 Significant Deficiency in Compliance ? Special Tests ? Collateralization, repeat of 2022-002 Identification of federal programs: 21.027 Coronavirus State and Local Fiscal Recover Funds 2022-002 Collateralization ? Significant Deficiency in Compliance and Internal Controls over Compliance ? Special Tests Criteria: 2 CFR part 200 subpart -D section 200.305(b)(7)(ii) states that ?Advance payments of Federal funds must be deposited and maintained in insured accounts whenever possible.? Condition: The accounts at the banking institution were not collateralized. Cause: Klawock Cooperative Association has changed banking institution and has not set up the collateralization at the new bank. Effect or potential effect: The Association was not in compliance with Federal compliance requirements. Additionally, if the bank fails, federal funds would be put at risk. Recommendation: Klawock Cooperative should immediately have the bank provide collateralization. Views of Responsible Officials: Management agrees. See Corrective Action Plan
Item 2022-001 Uniform Guidance Written Policies, Procedures and Standards of Conduct (Repeat Item 2019-001) U.S. Department of Agriculture Water and Waste Disposal Systems for Rural Communities Assistance Listing #10.760 Year Ended September 30, 2022 Criteria ? Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non-Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: ? ? 200.302 Financial management ? ? 200.305 Payment Condition ? The City does not have written policies, procedures and standards of conduct. Cause ? The entity has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Questioned Costs ? Not determinable Effect ? Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation ? We recommend that the Commission prepare written policies, procedures, and standards of conduct to include all the required elements as provided in 2 CFR 200, Subparts D & E of the Uniform Guidance. Management?s Response ? The City will consider all recommendations.
Material Instance of Non-Compliance Cash Management of Federal Funds This finding impacts the cash management compliance requirement for the major program, Health Center Program Cluster, Assistance Listing Numbers 93.224 - Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and 93.527 - Grants for New and Expanded Services under the Health Center Program, funded by the Health Resources and Services Administration, Department of Health and Human Services. Criteria: The Health Center must follow the cash management standards set out in 2 CFR section 200.305 whereby they must minimize the time elapsing between the transfer of funds from the Federal awarding agency and disbursing the funds if they are not following the reimbursement method. Condition: During our audit of the Health Center, we noted unearned revenue (conditional grant advance) of $2,081,951 of Federal funds related to the Health Center Program Cluster. Cause: During fiscal year 2022, the Health Center had planned expenditures late in the fiscal year that they could fund from the Health Center Program. In order to have the cash on hand to fund these expenditures, they drew the funds in advance of incurring the expenses. Circumstances changed and they were unable to spend the funds in a timely manner and, therefore, the Health Center did not incur allowable expenses to recognize the revenue during fiscal year 2022. Effect: The Health Center is not in compliance with Federal regulations regarding cash management. Recommendation: Management should do a thorough review of all contracts to ensure they are not drawing funds prior to incurring expenditures to ensure they are properly following cash management regulations for Federal contracts. Management Response: Codman Square Health Center, Inc. (the Health Center) received a two-year $4.053 million HRSA Workforce Development grant from April 1, 2021, through March 31, 2023. The funding was provided to support staffing recruitment and retention efforts as summarized by HRSA ? ?On Thursday, April 1, 2021, HRSA awarded more than $6.1 billion in funding provided by the American Rescue Plan Act (ARPA) to 1,377 HRSA-funded health centers (activity code H8F). The purposes of the ARPA funding are to prevent, mitigate, and respond to Coronavirus disease 2019 (COVID-19) and to enhance health care services and infrastructure. Consistent with these purposes, funding may support a wide range of in-scope activities, which may change as COVID-19 circumstances and related community, patient, and organizational needs evolve over the two-year period of performance?. We began program implementation on September 6, 2021, and management drew down $1 million on November 17, 2021, to cover eligible spent monies for that period. An additional $1 million was drawn down on June 1, 2022, to cover eligible expenditures as of May 2022, in the amount of $1,176,844. It was anticipated that there was a total of $1.9 million in eligible expenses to be spent in the month of September 2022 which included items such as retention bonuses, leadership training, staff recruitment, and placement costs. These expenses were never realized prior to August 2022 draw down. The remaining HRSA ARPA funds were expended by March 31, 2023. The Health Center was consistent with adhering to the proper grant billing procedures for the first two drawdowns. The Health Center will follow HRSA Compliance requirements detailed in Compliance Requirements - Cash Management and will draw down HRSA grants on an incurred cost reimbursement basis.
Material Instance of Non-Compliance Cash Management of Federal Funds This finding impacts the cash management compliance requirement for the major program, Health Center Program Cluster, Assistance Listing Numbers 93.224 - Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and 93.527 - Grants for New and Expanded Services under the Health Center Program, funded by the Health Resources and Services Administration, Department of Health and Human Services. Criteria: The Health Center must follow the cash management standards set out in 2 CFR section 200.305 whereby they must minimize the time elapsing between the transfer of funds from the Federal awarding agency and disbursing the funds if they are not following the reimbursement method. Condition: During our audit of the Health Center, we noted unearned revenue (conditional grant advance) of $2,081,951 of Federal funds related to the Health Center Program Cluster. Cause: During fiscal year 2022, the Health Center had planned expenditures late in the fiscal year that they could fund from the Health Center Program. In order to have the cash on hand to fund these expenditures, they drew the funds in advance of incurring the expenses. Circumstances changed and they were unable to spend the funds in a timely manner and, therefore, the Health Center did not incur allowable expenses to recognize the revenue during fiscal year 2022. Effect: The Health Center is not in compliance with Federal regulations regarding cash management. Recommendation: Management should do a thorough review of all contracts to ensure they are not drawing funds prior to incurring expenditures to ensure they are properly following cash management regulations for Federal contracts. Management Response: Codman Square Health Center, Inc. (the Health Center) received a two-year $4.053 million HRSA Workforce Development grant from April 1, 2021, through March 31, 2023. The funding was provided to support staffing recruitment and retention efforts as summarized by HRSA ? ?On Thursday, April 1, 2021, HRSA awarded more than $6.1 billion in funding provided by the American Rescue Plan Act (ARPA) to 1,377 HRSA-funded health centers (activity code H8F). The purposes of the ARPA funding are to prevent, mitigate, and respond to Coronavirus disease 2019 (COVID-19) and to enhance health care services and infrastructure. Consistent with these purposes, funding may support a wide range of in-scope activities, which may change as COVID-19 circumstances and related community, patient, and organizational needs evolve over the two-year period of performance?. We began program implementation on September 6, 2021, and management drew down $1 million on November 17, 2021, to cover eligible spent monies for that period. An additional $1 million was drawn down on June 1, 2022, to cover eligible expenditures as of May 2022, in the amount of $1,176,844. It was anticipated that there was a total of $1.9 million in eligible expenses to be spent in the month of September 2022 which included items such as retention bonuses, leadership training, staff recruitment, and placement costs. These expenses were never realized prior to August 2022 draw down. The remaining HRSA ARPA funds were expended by March 31, 2023. The Health Center was consistent with adhering to the proper grant billing procedures for the first two drawdowns. The Health Center will follow HRSA Compliance requirements detailed in Compliance Requirements - Cash Management and will draw down HRSA grants on an incurred cost reimbursement basis.
Material Instance of Non-Compliance Cash Management of Federal Funds This finding impacts the cash management compliance requirement for the major program, Health Center Program Cluster, Assistance Listing Numbers 93.224 - Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and 93.527 - Grants for New and Expanded Services under the Health Center Program, funded by the Health Resources and Services Administration, Department of Health and Human Services. Criteria: The Health Center must follow the cash management standards set out in 2 CFR section 200.305 whereby they must minimize the time elapsing between the transfer of funds from the Federal awarding agency and disbursing the funds if they are not following the reimbursement method. Condition: During our audit of the Health Center, we noted unearned revenue (conditional grant advance) of $2,081,951 of Federal funds related to the Health Center Program Cluster. Cause: During fiscal year 2022, the Health Center had planned expenditures late in the fiscal year that they could fund from the Health Center Program. In order to have the cash on hand to fund these expenditures, they drew the funds in advance of incurring the expenses. Circumstances changed and they were unable to spend the funds in a timely manner and, therefore, the Health Center did not incur allowable expenses to recognize the revenue during fiscal year 2022. Effect: The Health Center is not in compliance with Federal regulations regarding cash management. Recommendation: Management should do a thorough review of all contracts to ensure they are not drawing funds prior to incurring expenditures to ensure they are properly following cash management regulations for Federal contracts. Management Response: Codman Square Health Center, Inc. (the Health Center) received a two-year $4.053 million HRSA Workforce Development grant from April 1, 2021, through March 31, 2023. The funding was provided to support staffing recruitment and retention efforts as summarized by HRSA ? ?On Thursday, April 1, 2021, HRSA awarded more than $6.1 billion in funding provided by the American Rescue Plan Act (ARPA) to 1,377 HRSA-funded health centers (activity code H8F). The purposes of the ARPA funding are to prevent, mitigate, and respond to Coronavirus disease 2019 (COVID-19) and to enhance health care services and infrastructure. Consistent with these purposes, funding may support a wide range of in-scope activities, which may change as COVID-19 circumstances and related community, patient, and organizational needs evolve over the two-year period of performance?. We began program implementation on September 6, 2021, and management drew down $1 million on November 17, 2021, to cover eligible spent monies for that period. An additional $1 million was drawn down on June 1, 2022, to cover eligible expenditures as of May 2022, in the amount of $1,176,844. It was anticipated that there was a total of $1.9 million in eligible expenses to be spent in the month of September 2022 which included items such as retention bonuses, leadership training, staff recruitment, and placement costs. These expenses were never realized prior to August 2022 draw down. The remaining HRSA ARPA funds were expended by March 31, 2023. The Health Center was consistent with adhering to the proper grant billing procedures for the first two drawdowns. The Health Center will follow HRSA Compliance requirements detailed in Compliance Requirements - Cash Management and will draw down HRSA grants on an incurred cost reimbursement basis.
2022-006 AL# 66.468 – Capitalization Grants for Drinking Water State Revolving Funds Environmental Protection Agency – Passed Through the Alabama State Department of Environmental Management C – Cash Management Material Weakness and Noncompliance Criteria: The SRF Loan program is a reimbursable grant administered by ADEM. When non-Federal entities are funded under the reimbursement method, the entity they request reimbursement for expenses paid that are allowable to the grant under (2CFR section 200.305(b)(3)) and Section 2.2(b) of the Special Conditions Loan Agreement. Condition: During test work, instances were noted where The Water Works and Gas Board of the City of Red Bay did not pay the cost of the invoices prior to requesting reimbursement. The expenditures were allowable and approved by Alabama State Department of Environmental Management for reimbursement, but the invoices were not paid prior to requesting the reimbursement from Alabama State Department of Environmental Management. Context: The Water Works and Gas Board of the City of Red Bay did not ensure that invoices were paid prior to submitting them for reimbursement to Alabama State Department of Environmental Management. Effect: The entity is not in compliance with 2 CFR section 200.305(b)(3) and Section 2.2(b) of the Special Conditions Loan Agreement. Cause: The Water Works and Gas Board of the City of Red Bay did not ensure that invoices were paid prior to requesting reimbursement. Repeat Finding: No Recommendation: The Water Works and Gas Board of the City of Red Bay should ensure that invoices are paid prior to requesting reimbursement from the pass-through entity. Board’s Response: The Water Works and Gas Board of the City of Red Bay will ensure payments under reimbursable grants are made prior to reimbursement requests.