Significant deficiency in internal control over compliance related to matching compliance requirements. Federal Agency: US Department of Treasury Pass-Through Entity: State of Colorado Department of Local Affairs - Division of Housing Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number: H4HRG23147 Criteria Nonfederal entities must follow the standards for documentation of personnel expenses set out at 2 CFR section 200.306(a). Under this guidance, the entity that accepts any cost share funds (including cash and third-party in-kind contributions, and also including funds committed by the recipient, subrecipient, or third parties) as part of the recipient's or subrecipient's contributions to a program when the funds among others: 1) are verifiable in the recipient's or subrecipient’s records. Section III - Reportable Findings and Questioned Costs for Federal Awards Condition/Context/Cause The Organization entered into an agreement with match requirements to qualify for a federal match. The agreement stipulates the Organization has until September 2026 to expend the necessary matching funds. During our testing of matching for this award we noted that the Organization did not have controls in place to track and monitor compliance with the matching requirement. Effect The effect is that the Organization was not tracking spending to date that qualifies to meet the matching requirement for this award in compliance with the requirements of 2 CFR section 200.306. Questioned Costs None. Repeat Finding This is not a repeat finding. Recommendation We recommend management update its internal control process for a tracking system of matching funds to ensure compliance with 2 CFR 200.306 is met. This includes maintaining detailed records and documentation of all matching contributions. Views of Responsible Official and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Significant deficiency in internal control over compliance related to matching compliance requirements. Federal Agency: US Department of Treasury Pass-Through Entity: State of Colorado Department of Local Affairs - Division of Housing Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number: H4HRG23147 Criteria Nonfederal entities must follow the standards for documentation of personnel expenses set out at 2 CFR section 200.306(a). Under this guidance, the entity that accepts any cost share funds (including cash and third-party in-kind contributions, and also including funds committed by the recipient, subrecipient, or third parties) as part of the recipient's or subrecipient's contributions to a program when the funds among others: 1) are verifiable in the recipient's or subrecipient’s records. Section III - Reportable Findings and Questioned Costs for Federal Awards Condition/Context/Cause The Organization entered into an agreement with match requirements to qualify for a federal match. The agreement stipulates the Organization has until September 2026 to expend the necessary matching funds. During our testing of matching for this award we noted that the Organization did not have controls in place to track and monitor compliance with the matching requirement. Effect The effect is that the Organization was not tracking spending to date that qualifies to meet the matching requirement for this award in compliance with the requirements of 2 CFR section 200.306. Questioned Costs None. Repeat Finding This is not a repeat finding. Recommendation We recommend management update its internal control process for a tracking system of matching funds to ensure compliance with 2 CFR 200.306 is met. This includes maintaining detailed records and documentation of all matching contributions. Views of Responsible Official and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
2024-001 Use of Unallowable Funds to Meet Matching Requirement (Material Weakness) Federal Agency: U.S. Environmental Protection Agency Pass-through Agency: N/A Cluster/Program: Congressionally Mandated Projects Assistance Listing Number: 66.202 Passed-through Identification: N/A Compliance Requirement: Matching Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.306, matching contributions must be (1) verifiable from the Town’s records, (2) not be paid by the Federal Government under another federal award except where authorized by statute, and (3) be allowable under the terms and conditions of the federal award. In addition, the EPA award terms and implementation guidance, it specifically states that “American Rescue Plan Act (ARPA) funds cannot be used to meet the non-federal cost share requirement.” However, the use of the Clean Water State Revolving Fund (CWSRF) funds is allowable. Condition: During testing of reimbursement requests and supporting documentation, we noted that the Town reported ARPA funds as the source for the required 20% non-federal match on certain project costs. Documentation did not show that CWSRF funds were applied to the match during those reimbursement periods. Cause: The Town used ARPA funds for the 20% non-federal match because personnel did not realize these funds were ineligible under the grant terms. Although eligible CWSRF funds were available, they were not applied or documented as the match. Effect: The Town did not comply with the EPA grant’s matching requirements. As a result, the expenditures reported as match in the amount of $262,500 were not allowable under the award terms. This creates a risk that the EPA may disallow the federal share of costs if sufficient eligible match cannot be documented. Questioned Costs: $262,500 – which represents the portion of match applied to an unallowable source. Identification as Repeat Finding: This is not a repeat finding from the prior year. Recommendation: We recommend that the Town reclassify the match to eligible CWSRF funds for all affected reimbursement requests and provide updated documentation to the EPA. In addition, the Town should strengthen internal controls to ensure that only allowable funding sources are applied toward matching requirements and implement review procedures to verify compliance before submitting reimbursement requests. Finally, staff responsible for grant administration should receive training on grant terms and allowable match sources to prevent similar errors in the future. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
Assistance Listing Number(s): 93.575 Name of Federal Program or Cluster: CCDF Cluster Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities: Iowa County Department of Social Services, Jefferson County Human Services Department, Waukesha County Department of Health and Human Services, Dane County Department of Human Services, Supporting Families Together Association, Inc., and 4C-for Children, Inc. Pass-through Entities Identifying Numbers: 2024-04, 87242, 437002-G16-0000756-R05-02, and 437002- G16-0000756-R06-02 Award Periods: July 1, 2023 through June 30, 2024, July 1, 2024 through June 30, 2025, and January 1, 2024 through December 31, 2024 Criteria or Specific Requirement: In accordance with 2 CFR Part 200, Subpart D (§200.306) non-federal entities must meet matching, level of effort, and earmarking requirements, including proper documentation and monitoring to demonstrate compliance. The Uniform Guidance requires that controls be in place to ensure that these compliance requirements are consistently met per §200.303. Condition: The entity did not have adequate internal controls in place to ensure that non-federal match contributions and earmarking calculations were properly tracked, documented, and verified. Cause: There are an absence of formal policies and procedures, insufficient training of staff responsible for compliance, and a lack of segregation of duties related to review and approval of match contributions and earmarking calculations. Effect or Potential Effect: There is an increased risk that the entity may not be in compliance with applicable matching and earmarking requirements. Recommendation: We recommend that the entity implement formal written policies and procedures for tracking and documenting matching contributions and earmarking calculations. These procedures should include regular reconciliations, management review, and appropriate documentation retention. Additionally, staff should be trained on federal compliance requirements, and responsibilities should be clearly assigned to ensure adequate segregation of duties. Views of Responsible Officials: Management agrees with the finding and is considering options to implement the recommendations.
Assistance Listing Number(s): 93.575 Name of Federal Program or Cluster: CCDF Cluster Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities: Iowa County Department of Social Services, Jefferson County Human Services Department, Waukesha County Department of Health and Human Services, Dane County Department of Human Services, Supporting Families Together Association, Inc., and 4C-for Children, Inc. Pass-through Entities Identifying Numbers: 2024-04, 87242, 437002-G16-0000756-R05-02, and 437002- G16-0000756-R06-02 Award Periods: July 1, 2023 through June 30, 2024, July 1, 2024 through June 30, 2025, and January 1, 2024 through December 31, 2024 Criteria or Specific Requirement: In accordance with 2 CFR Part 200, Subpart D (§200.306) non-federal entities must meet matching, level of effort, and earmarking requirements, including proper documentation and monitoring to demonstrate compliance. The Uniform Guidance requires that controls be in place to ensure that these compliance requirements are consistently met per §200.303. Condition: The entity did not have adequate internal controls in place to ensure that non-federal match contributions and earmarking calculations were properly tracked, documented, and verified. Cause: There are an absence of formal policies and procedures, insufficient training of staff responsible for compliance, and a lack of segregation of duties related to review and approval of match contributions and earmarking calculations. Effect or Potential Effect: There is an increased risk that the entity may not be in compliance with applicable matching and earmarking requirements. Recommendation: We recommend that the entity implement formal written policies and procedures for tracking and documenting matching contributions and earmarking calculations. These procedures should include regular reconciliations, management review, and appropriate documentation retention. Additionally, staff should be trained on federal compliance requirements, and responsibilities should be clearly assigned to ensure adequate segregation of duties. Views of Responsible Officials: Management agrees with the finding and is considering options to implement the recommendations.
Assistance Listing Number(s): 93.575 Name of Federal Program or Cluster: CCDF Cluster Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities: Iowa County Department of Social Services, Jefferson County Human Services Department, Waukesha County Department of Health and Human Services, Dane County Department of Human Services, Supporting Families Together Association, Inc., and 4C-for Children, Inc. Pass-through Entities Identifying Numbers: 2024-04, 87242, 437002-G16-0000756-R05-02, and 437002- G16-0000756-R06-02 Award Periods: July 1, 2023 through June 30, 2024, July 1, 2024 through June 30, 2025, and January 1, 2024 through December 31, 2024 Criteria or Specific Requirement: In accordance with 2 CFR Part 200, Subpart D (§200.306) non-federal entities must meet matching, level of effort, and earmarking requirements, including proper documentation and monitoring to demonstrate compliance. The Uniform Guidance requires that controls be in place to ensure that these compliance requirements are consistently met per §200.303. Condition: The entity did not have adequate internal controls in place to ensure that non-federal match contributions and earmarking calculations were properly tracked, documented, and verified. Cause: There are an absence of formal policies and procedures, insufficient training of staff responsible for compliance, and a lack of segregation of duties related to review and approval of match contributions and earmarking calculations. Effect or Potential Effect: There is an increased risk that the entity may not be in compliance with applicable matching and earmarking requirements. Recommendation: We recommend that the entity implement formal written policies and procedures for tracking and documenting matching contributions and earmarking calculations. These procedures should include regular reconciliations, management review, and appropriate documentation retention. Additionally, staff should be trained on federal compliance requirements, and responsibilities should be clearly assigned to ensure adequate segregation of duties. Views of Responsible Officials: Management agrees with the finding and is considering options to implement the recommendations.
Assistance Listing Number(s): 93.575 Name of Federal Program or Cluster: CCDF Cluster Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities: Iowa County Department of Social Services, Jefferson County Human Services Department, Waukesha County Department of Health and Human Services, Dane County Department of Human Services, Supporting Families Together Association, Inc., and 4C-for Children, Inc. Pass-through Entities Identifying Numbers: 2024-04, 87242, 437002-G16-0000756-R05-02, and 437002- G16-0000756-R06-02 Award Periods: July 1, 2023 through June 30, 2024, July 1, 2024 through June 30, 2025, and January 1, 2024 through December 31, 2024 Criteria or Specific Requirement: In accordance with 2 CFR Part 200, Subpart D (§200.306) non-federal entities must meet matching, level of effort, and earmarking requirements, including proper documentation and monitoring to demonstrate compliance. The Uniform Guidance requires that controls be in place to ensure that these compliance requirements are consistently met per §200.303. Condition: The entity did not have adequate internal controls in place to ensure that non-federal match contributions and earmarking calculations were properly tracked, documented, and verified. Cause: There are an absence of formal policies and procedures, insufficient training of staff responsible for compliance, and a lack of segregation of duties related to review and approval of match contributions and earmarking calculations. Effect or Potential Effect: There is an increased risk that the entity may not be in compliance with applicable matching and earmarking requirements. Recommendation: We recommend that the entity implement formal written policies and procedures for tracking and documenting matching contributions and earmarking calculations. These procedures should include regular reconciliations, management review, and appropriate documentation retention. Additionally, staff should be trained on federal compliance requirements, and responsibilities should be clearly assigned to ensure adequate segregation of duties. Views of Responsible Officials: Management agrees with the finding and is considering options to implement the recommendations.
Assistance Listing Number(s): 93.575 Name of Federal Program or Cluster: CCDF Cluster Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities: Iowa County Department of Social Services, Jefferson County Human Services Department, Waukesha County Department of Health and Human Services, Dane County Department of Human Services, Supporting Families Together Association, Inc., and 4C-for Children, Inc. Pass-through Entities Identifying Numbers: 2024-04, 87242, 437002-G16-0000756-R05-02, and 437002- G16-0000756-R06-02 Award Periods: July 1, 2023 through June 30, 2024, July 1, 2024 through June 30, 2025, and January 1, 2024 through December 31, 2024 Criteria or Specific Requirement: In accordance with 2 CFR Part 200, Subpart D (§200.306) non-federal entities must meet matching, level of effort, and earmarking requirements, including proper documentation and monitoring to demonstrate compliance. The Uniform Guidance requires that controls be in place to ensure that these compliance requirements are consistently met per §200.303. Condition: The entity did not have adequate internal controls in place to ensure that non-federal match contributions and earmarking calculations were properly tracked, documented, and verified. Cause: There are an absence of formal policies and procedures, insufficient training of staff responsible for compliance, and a lack of segregation of duties related to review and approval of match contributions and earmarking calculations. Effect or Potential Effect: There is an increased risk that the entity may not be in compliance with applicable matching and earmarking requirements. Recommendation: We recommend that the entity implement formal written policies and procedures for tracking and documenting matching contributions and earmarking calculations. These procedures should include regular reconciliations, management review, and appropriate documentation retention. Additionally, staff should be trained on federal compliance requirements, and responsibilities should be clearly assigned to ensure adequate segregation of duties. Views of Responsible Officials: Management agrees with the finding and is considering options to implement the recommendations.
Assistance Listing Number(s): 93.575 Name of Federal Program or Cluster: CCDF Cluster Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities: Iowa County Department of Social Services, Jefferson County Human Services Department, Waukesha County Department of Health and Human Services, Dane County Department of Human Services, Supporting Families Together Association, Inc., and 4C-for Children, Inc. Pass-through Entities Identifying Numbers: 2024-04, 87242, 437002-G16-0000756-R05-02, and 437002- G16-0000756-R06-02 Award Periods: July 1, 2023 through June 30, 2024, July 1, 2024 through June 30, 2025, and January 1, 2024 through December 31, 2024 Criteria or Specific Requirement: In accordance with 2 CFR Part 200, Subpart D (§200.306) non-federal entities must meet matching, level of effort, and earmarking requirements, including proper documentation and monitoring to demonstrate compliance. The Uniform Guidance requires that controls be in place to ensure that these compliance requirements are consistently met per §200.303. Condition: The entity did not have adequate internal controls in place to ensure that non-federal match contributions and earmarking calculations were properly tracked, documented, and verified. Cause: There are an absence of formal policies and procedures, insufficient training of staff responsible for compliance, and a lack of segregation of duties related to review and approval of match contributions and earmarking calculations. Effect or Potential Effect: There is an increased risk that the entity may not be in compliance with applicable matching and earmarking requirements. Recommendation: We recommend that the entity implement formal written policies and procedures for tracking and documenting matching contributions and earmarking calculations. These procedures should include regular reconciliations, management review, and appropriate documentation retention. Additionally, staff should be trained on federal compliance requirements, and responsibilities should be clearly assigned to ensure adequate segregation of duties. Views of Responsible Officials: Management agrees with the finding and is considering options to implement the recommendations.
Assistance Listing Number(s): 93.575 Name of Federal Program or Cluster: CCDF Cluster Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities: Iowa County Department of Social Services, Jefferson County Human Services Department, Waukesha County Department of Health and Human Services, Dane County Department of Human Services, Supporting Families Together Association, Inc., and 4C-for Children, Inc. Pass-through Entities Identifying Numbers: 2024-04, 87242, 437002-G16-0000756-R05-02, and 437002- G16-0000756-R06-02 Award Periods: July 1, 2023 through June 30, 2024, July 1, 2024 through June 30, 2025, and January 1, 2024 through December 31, 2024 Criteria or Specific Requirement: In accordance with 2 CFR Part 200, Subpart D (§200.306) non-federal entities must meet matching, level of effort, and earmarking requirements, including proper documentation and monitoring to demonstrate compliance. The Uniform Guidance requires that controls be in place to ensure that these compliance requirements are consistently met per §200.303. Condition: The entity did not have adequate internal controls in place to ensure that non-federal match contributions and earmarking calculations were properly tracked, documented, and verified. Cause: There are an absence of formal policies and procedures, insufficient training of staff responsible for compliance, and a lack of segregation of duties related to review and approval of match contributions and earmarking calculations. Effect or Potential Effect: There is an increased risk that the entity may not be in compliance with applicable matching and earmarking requirements. Recommendation: We recommend that the entity implement formal written policies and procedures for tracking and documenting matching contributions and earmarking calculations. These procedures should include regular reconciliations, management review, and appropriate documentation retention. Additionally, staff should be trained on federal compliance requirements, and responsibilities should be clearly assigned to ensure adequate segregation of duties. Views of Responsible Officials: Management agrees with the finding and is considering options to implement the recommendations.
Assistance Listing Number(s): 93.575 Name of Federal Program or Cluster: CCDF Cluster Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities: Iowa County Department of Social Services, Jefferson County Human Services Department, Waukesha County Department of Health and Human Services, Dane County Department of Human Services, Supporting Families Together Association, Inc., and 4C-for Children, Inc. Pass-through Entities Identifying Numbers: 2024-04, 87242, 437002-G16-0000756-R05-02, and 437002- G16-0000756-R06-02 Award Periods: July 1, 2023 through June 30, 2024, July 1, 2024 through June 30, 2025, and January 1, 2024 through December 31, 2024 Criteria or Specific Requirement: In accordance with 2 CFR Part 200, Subpart D (§200.306) non-federal entities must meet matching, level of effort, and earmarking requirements, including proper documentation and monitoring to demonstrate compliance. The Uniform Guidance requires that controls be in place to ensure that these compliance requirements are consistently met per §200.303. Condition: The entity did not have adequate internal controls in place to ensure that non-federal match contributions and earmarking calculations were properly tracked, documented, and verified. Cause: There are an absence of formal policies and procedures, insufficient training of staff responsible for compliance, and a lack of segregation of duties related to review and approval of match contributions and earmarking calculations. Effect or Potential Effect: There is an increased risk that the entity may not be in compliance with applicable matching and earmarking requirements. Recommendation: We recommend that the entity implement formal written policies and procedures for tracking and documenting matching contributions and earmarking calculations. These procedures should include regular reconciliations, management review, and appropriate documentation retention. Additionally, staff should be trained on federal compliance requirements, and responsibilities should be clearly assigned to ensure adequate segregation of duties. Views of Responsible Officials: Management agrees with the finding and is considering options to implement the recommendations.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Criteria or Specific Requirement: Per 2 CFR §200.302, nonfederal entities must establish and maintain effective internal control over federal awards to provide reasonable assurance of compliance with applicable federal statutes, regulations, and the terms and conditions of the award. • Cash Management requirements under 2 CFR §200.305 require that drawdowns be based on allowable costs incurred, supported by documentation, and reviewed for accuracy prior to submission. • Matching requirements under 2 CFR §200.306 require that cost sharing or matching contributions be verifiable from the entity’s records and documented in accordance with the cost principles. Entities must retain written documentation of the review and approval process before submission of reimbursement requests to ensure accuracy and compliance. Condition: The Organization maintained a written cash management policy; however, the policy did not specify that documentation of review and approval of reimbursement requests must be retained. As a result, the Organization was unable to provide written evidence of review and approval prior to submission of certain reimbursement requests. In addition, the Organization did not have a formal written policy addressing the review, approval, and documentation of matching contributions to ensure they are allowable, verifiable, and in compliance with federal requirements. While management indicated that a review process occurs, the lack of documented approval reduces the audit trail and does not provide adequate evidence that costs included in the requests were reviewed for accuracy, allowability, and compliance with both cash management and matching requirements. Cause: The lack of specificity in the cash management policy regarding retention of documented approvals, combined with the absence of a written matching policy, resulted in a lack of written documentation of the review and approval process that could be verified. Effect or Potential Effect: Without documented approval for reimbursement requests or a formal policy over matching, there is an increased risk that unallowable or unsupported costs could be included in reimbursement requests or that matching contributions could be inaccurately reported, potentially resulting in noncompliance with federal requirements. Questioned Costs: Not applicable as there were no questioned costs related to noncompliance. Recommendation: We recommend the Organization strengthen its internal controls over cash management and matching by implementing the following: 1. Update the cash management policy to require documented review and approval of reimbursement requests, with such documentation retained as part of the grant record. 2. Develop and implement a formal written matching policy that includes procedures for review, approval, and documentation of matching contributions to ensure compliance with 2 CFR §200.306. Repeat finding from prior year: No – this is the Organization’s first single audit. Views of Responsible Officials: Management agrees with the finding. See attached corrective action plan.
2024-002 Procedures for Match Requirements – Significant Deficiency Criteria: In accordance with 2 CFR 200.306, recipients must provide required cost sharing or matching as stipulated in the award. Additionally, 2 CFR 200.302(b)(7) requires nonfederal entities to have written procedures to ensure compliance with the terms and conditions of federal awards, including matching requirements. Condition: During our audit, we noted that Mountain Home does not have written policies and procedures in place to ensure compliance with the federal grant’s matching requirement. While management tracks matching expenditures, there is no documented process describing how matching costs are identified, recorded, reviewed, or monitored for compliance. Cause: Undetermined. Effect: Without documented policies and procedures, there is an increased risk that matching requirements may not be met, that ineligible costs could be charged as match, or that insufficient documentation may exist to support amounts reported to the granting agency. This could lead to questioned costs, disallowance of claimed matching contributions, or potential noncompliance with federal grant requirements. Recommendation: We recommend that management develop and implement written policies and procedures that describe the process for identifying, tracking, and reviewing matching expenditures.
Finding 2024‐001: Matching – Significant deficiency in internal controls over compliance and compliance finding. Continuum of Care Program ALN 14.267 Criteria: Per 2 CFR § 200.306, non‐federal entities are required to provide the level of matching (cost sharing) specified in the terms and conditions of the federal award. Matching contributions must be verifiable from the non‐federal entity’s records, not be included as contributions for any other federal award, and be necessary and reasonable for accomplishment of program objectives. Condition: During matching testing, the auditor noted the Organization did not meet the required 25% matching contribution specified in the award agreement. Questioned Costs: $21,917, representing the shortfall in matching contributions. Cause: In January and February of 2024, the Organization was transitioning from being a program of CitySquare to becoming an independent 501(c)(3). Following the transition, two staff members previously allocated to the match departed in September 2024, and their associated match was not reassigned. Effect: The Organization’s matching contributions did not meet the grant requirement in accordance with its internal control procedures over compliance. Failure to meet the required matching contribution may result in noncompliance with the terms and conditions of the federal award and could impact the allowability of federal expenditures claimed. The full amount of the federal expenditures may be subject to disallowance by the awarding agency. Recommendation: Management should implement controls to strengthen its grant management procedures to ensure all matching requirements are clearly understood, budgeted for, and monitored regularly. This includes assigning responsibility for tracking match contributions and reconciling them periodically to ensure compliance throughout the grant period. Management’s Response: See corrective action plan.
Finding Reference 2024-003: Insufficient Non-Federal Share Federal Agency: U.S. Department of Commerce Compliance Requirement: Matching, Level of Efforts, Earmarking Federal Program: 11.034 - MBDA Business Center- Capital Readiness Program Grant Award: MB23OBD8020301 Type of Finding: Significant Deficiency in Internal Control over Compliance Condition/Context: CRMSDC reported $191,585 in matching expenditures for Grant Year 1. However, the supporting documentation provided totaled only $114,473, which did not align with the categories in the approved matching budget of $189,250. Reported costs included expenditures outside of approved categories and did not reconcile to the grant agreement requirements. As a result, there was a shortfall of $74,777 in the required non-federal share. Criteria: In accordance with 2 CFR §200.306, cost sharing or matching contributions must be verifiable from the recipient’s records, necessary and reasonable for the program, and must meet the amounts and categories established in the approved award budget. Cause: CRMSDC did not establish adequate procedures to ensure that matching expenditures were tracked and reported in accordance with approved budget categories and amounts. Further, management did not seek or obtain prior approval from the awarding agency for any modification or waiver of the matching requirement. Effect: As a result, CRMSDC did not fully meet the required non-federal share. This noncompliance exposes the organization to potential disallowance of costs, repayment of federal funds, or other administrative actions by the awarding agency. Questioned Costs: $74,777 32 CAPITAL REGION MINORITY SUPPLIER DEVELOPMENT COUNCIL, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31, 2024 – (CONTINUTED) Recommendation: We recommend that CRMSDC strengthen its monitoring controls and procedures to ensure compliance with matching requirements. Specifically, management should: • Implement periodic reviews (e.g., quarterly) to compare actual contributions against the required match amounts and approved budget categories. • Maintain detailed and verifiable documentation for all matching costs. • Provide training to staff responsible for grant compliance on Uniform Guidance and award-specific requirements. • Seek timely approval from the awarding agency for any modifications to budget categories or matching requirements. • Develop and implement a corrective action plan to address the identified shortfall and to prevent recurrence in future grant periods. Views of Responsible Officials and Planned
Federal Program 23.002 - Appalachian Area Development Award Number ARC-22699 Federal Agency Appalachian Regional Commission (ARC) Compliance Requirement Matching Type of Finding Internal Control over Compliance - Significant Deficiency Compliance - Noncompliance Questioned costs None Criteria Per 2 CFR §200.306, federal awards may require non-federal entities to contribute a specific percentage of matching funds. ARC grant 23.002 requires a minimum match of 66.9456%. Internal controls should be designed to ensure compliance with such requirements prior to requesting reimbursement. Condition During testing of the ARC grant 23.002, we noted the City of Batesville's initial reimbursement request included ARC charges exceeding the allowable federal share by $26, 180, representing 1.6426% of total allocable expenditures for the year. The overstatement resulted in a cumulative match percentage below the required 66.9456%. The error was identified by the State oversight agency prior to disbursement, and the City subsequently revised Request #4 to bring the overall match into compliance. No federal funds were improperly drawn. Cause The City's internal controls over grant reimbursement requests did not include sufficient review procedures to ensure compliance with federal match requirements prior to submission. The error was not detected internally and was instead identified by the State. Effect Although the error was corrected· before reimbursement and no questioned costs resulted, the lack of internal detection indicates a control deficiency that could lead to future noncompliance or improper use of federal funds if not addressed. Recommendation We recommend the City strengthen its internal controls over grant reimbursement requests by implementing formal review procedures to verify compliance with federal match requirements before submission. This may include checklist protocols, supervisory sign-off, or automated validation tools. Views of Responsible Officials Management concurs with the finding. The City acknowledges that the initial reimbursement request exceeded the allowable federal share and appreciates the State's oversight in identifying the issue prior to disbursement. Moving forward, the City will implement a formal review process for reimbursement submissions, including supervisory approval and automated checks to ensure compliance with match requirements. Staff will also receive training on ARC match calculations and documentation standards.
Finding 2024-043 - Use of Federal Funds to Satisfy Required Local Match Without Prior Approval Summary: The City of Batesville substituted federal Delta Regional Authority (ORA) and Appalachian Regional Commission (ARC) funds for required local match obligations under two federal grants-ARC (ALN 23.002) and CDBG (ALN 14.228)-without obtaining prior written approval from the awarding agencies. Although CDBG was not selected for audit testing, the questioned costs originally exceeded the $10,000 threshold and are reported in accordance with 2 CFR §200.516(a): Total questioned costs of $800,406 were initially allocated proportionally between the two programs; These costs have since been resolved through formal amendments to both grant agreements. Federal Programs 23.002 _; Appalachian Area Development (ARC) 14.228 - Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii· (CDBG) Note: ALN 14.228 was not selected for audit testing under the Uniform Guidance compliance requirements. However, a finding is presented in accordance with 2 CFR §200.516(a) due to the materiality of the issue and its connection to ARC grant MS-20699. Award Numbers ARC: MS-20699 CDBG Subgrant: 1137 ~21-111-PF-01 Federal Agencies U.S. Department of the Treasury (via Appalachian Regional Commission) U.S. Department of Housing and Urban Development Compliance Requirements Matching - 2 CFR §200.306 Allowable Costs/Cost Principles - 2 CFR §200.403 Internal Controls -2 CFR §200.303 Audit Finding Threshold - 2 CFR §200.516(a) Type of Finding Internal Control over Compliance - Material Weakness Compliance - Noncompliance Questioned Costs Based on actual net expenditures and proportional match requirements: (TABLE) These questioned costs have been eliminated following receipt of amended contracts from ARC and CDBG approving the use of ORA and CDBG funds as match. Criteria The following federal regulations and grant conditions establish the requirements violated in this finding: 1. Matching Requirements - 2 CFR §200.306 Federal funds may not be used to meet a required cost share or match unless expressly authorized by the awarding agency. Matching contributions must: Be verifiable from the recipient's records Not be included as contributions for any other federal award Be necessary and reasonable for accomplishing program objectives Be allowable under the cost principles Not be paid by. the federal government under another award, unless authorized 2. Allowable Costs ... 2 CFR §200.403 Costs must be necessary, reasonable, allocable, and conform to limitations in the award terms. Costs must be adequately documented and consistent with policies that apply uniformly to both federally financed and other activities. 3. Internal Controls - 2 CFR §200.303 Recipients must establish and maintain effective internal controls to ensure compliance with feqeral statutes, regulations, and award terms. Controls should provide reasonable assurance that the organization is managing the award in compliance with applicable requirements. 4. Audit Finding Threshold-2 CFR §200.516(a) Auditors must report known questioned costs that exceed $10,000 for a federal program, even if the program was not selected for audit testing. Condition During the audit of ARC grant MS-20699 (ALN 23.002), we noted that the City of Batesville substituted $569,600 in federal ORA funds for the originally budgeted local match of $341,784. Additionally, for COBG grant ALN 14.228, the City substituted $569,600 in ORA funds and $553,000 in ARC grant funds for the originally budgeted local match of $901,784. These substitutions were made without prior written approval or executed amendments from the awarding agencies, as required under 2 CFR §200.306 and the respective grant agreements. Resolution Following the audit fieldwork, the City obtained formal amendments to both grant agreements: On October 24, 2025, ARC approved the substitution of ORA and COBG funds as match under ALN 23.002. On November 7, 2025, COBG approved the substitution of ORA and ARC funds as match under ALN 14.228. These approvals eliminate the previously identified questioned costs totaling $800,406. However, the lack of contemporaneous documentation and prior approval reflects a breakdown in internal controls and remains a material compliance issue. Cause The City lacked adequate internal controls to ensure changes to match sources were formally reviewed and approved by the awarding agencies prior to implementation. The substitution of federal funds for required local match was not documented or authorized at the time of expenditure. Effect Although questioned costs have been resolved, the City was in noncompliance with federal matching requirements and allowable cost principles at the time of expenditure. This reflects a broader control deficiency in the City's grant management process and increases the risk of future noncompliance. Recommendation We recommend the City strengthen its internal controls over grant compliance, including: Formal review and documentation of match sources prior to drawdown Written approval from awarding agencies before substituting federal funds for required match Staff training on federal match requirements and Uniform Guidance compliance Views of Responsible Officials Management concurs with the finding. The City acknowledges that federal ORA and ARC funds were applied toward required match obligations without prior approval or amendment to the respective grant agreements. ARC and CDBG representatives have since approved the substitutions through formal amendments. The City will implement procedures requiring written authorization for any future match substitutions and establish a formal review process to verify match sources prior to drawdown.
REFERENCE: 2024-103 CFDA NUMBER 84.425D – COVID 19 – EDUCATION STABILIZATION FUND CFDA NUMBER 84.425U – COVID 19 – EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION – 2022 U.S. DEPARTMENT OF EDUCATION – 2023 U.S. DEPARTMENT OF EDUCATION – 2024 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBERS: S425D200038, S425D210038, S425U2100038 QUESTIONED COSTS N/A CONDITION For of 3 of 60 non-payroll transactions tested, documentation was not available to demonstrate that the cost was allowable and approved in the final grant application. The costs were removed from the completion report approved by the Arizona Department of Education on December 19, 2024. Additionally, a fiscal monitoring completed by the Arizona Department of Education in December 2024, that covered the period of March 15, 2020 through September 30, 2023, reported the following unallowable costs, associated with Education Stabilization Funds grants, that the School is required to repay. • $4,982.34 (ESSER I) for continual internet and phone services not included in the approved grant budget; • $547.82 (ESSER I) for an online foreign language program not included in the approved grant budget; • $631.14 (ESSER II) for outdoor play equipment not included in the approved grant budget. • $3,000.00 (ESSER II) for contracted technical coach services not approved in the approved grant budget. The total known questioned costs are $9,161.30. CRITERIA In accordance with OMB Compliance Supplement, Part 6 – Internal Control, non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. In accordance with Title 2 of the Code of Federal Regulations, Subtitle A Office of Management and Budget Guidance for Grants and Agreements, Chapter II Office of Management and Budget Guidance, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E -Cost Principles 200.403 Factors Affecting Allowability of Costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the recipient or subrecipient. d. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). g. Be adequately documented. See also §§ 200.300 through 200.309 of this part. h. Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). EFFECT Program requirements were not complied with. The School did not maintain adequate documentation of all costs charged to the federal program. CAUSE Internal controls were not designed appropriately to ensure that all charges to the federal grant were allowable. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to ensure that documentation of all purchases charged to a federal program include only allowable costs and that the costs are included in the grant applications. Any reviews should be documented. This will help ensure that program requirements are complied. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
REFERENCE: 2024-102 CFDA NUMBER 84.367 – IMPROVING TEACHER QUALITY U.S. DEPARTMENT OF EDUCATION – 2023 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S367A220049 QUESTIONED COSTS $28,100 CONDITION A fiscal monitoring completed by the Arizona Department of Education in December 2024, covering fiscal year 2023, reported $28,100 in unallowable costs for therapeutic services, not outlined in the approved grant budget, and that the School is required to repay. CRITERIA In accordance with Title 2 of the Code of Federal Regulations, Subtitle A Office of Management and Budget Guidance for Grants and Agreements, Chapter II Office of Management and Budget Guidance, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E -Cost Principles 200.403 Factors Affecting Allowability of Costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the recipient or subrecipient. d. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). g. Be adequately documented. See also §§ 200.300 through 200.309 of this part. h. Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). In accordance with OMB Compliance Supplement, Part 6 – Internal Control, non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. EFFECT Program requirements were not complied with. The School did not maintain adequate documentation of all costs charged to the federal program. CAUSE Internal controls were not designed appropriately to ensure that all charges to the federal grant were allowable. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to ensure that documentation of all purchases charged to a federal program include only allowable costs and that the costs are included in the grant applications. Any reviews should be documented. This will help ensure that program requirements are complied. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Federal Agency: U.S. Department of Defense Program/Cluster: Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation Federal Assistance Listing Number: 12.003 Award No.: MIR1973-22-01 Award Year: 2023 Compliance Requirement: Matching, Level of Effort and Earmarking Type of Finding: Significant Deficiency in Internal Control over Compliance, Instance of Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(g)(4) Salaries and wages of employees used in meeting cost sharing requirements on Federal awards must be supported in the same manner as salaries and wages claimed for reimbursement from Federal awards. 2 CFR 200.306(f) requires that if services furnished by a third-party organization are claimed as a cost-sharing match, these services must be valued at the employee’s regular rate of pay, plus an amount of fringe benefits that is reasonable, necessary, allocable, and otherwise allowable. Condition: We noted personnel services furnished by third-party organizations totaled $31,025 for the life of the grant, including $10,854 in fiscal year 2024. For the services furnished by third-party organizations as a local match of costs, the City valued the personnel time based on budgeted rates. The City could not provide documentation supporting the actual cost incurred by the third-party organization to support the in-kind services claimed. Cause: The City’s policies and procedures for in-kind services furnished by third-party organizations toward the grant did not include obtaining documentation to support the actual costs incurred and value of services claimed. Effect: The City did not comply with required local match of expenses for the grant. Questioned Costs: We identified questioned costs totaling $2,435 for unsubstantiated costs furnished by third-party organizations claimed as local cost share expenditures. Context/Sampling: A nonstatistical sample of 13 out of 54 local cost share expenditures were tested. This represents $9,114 of local cost share expenditures out of a total of $46,809 incurred for fiscal year 2024. Upon further investigation, the questioned costs were isolated to contributed services furnished by third-party organizations which totaled $10,854 in the fiscal year 2024. Repeat Finding from Prior Year(s): No. Recommendation: We recommend the City establish policies and procedures and documentation standards to comply with the Uniform Guidance standards for documentation of personnel expenses used to meet the local share of expenses. Views of Responsible Officials: Management concurs with the finding. See separate corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
Finding 2024-003 – Reporting Name of Federal Agency: Department of Labor- Federal Program Name and Assistance Listing Number: YouthBuild Program -17.274 Federal Award Identification Number and Year: YB-38231-22-60-A-36 May 02, 2022 through September 01, 2025. Criteria In accordance with the Funding Opportunity Announcement, the Company is required to provide and expend cash, in-kind or third party resources equivalent to exactly 25 percent of the grant award amount as "matching" funds. Match can be in the form of cash, in-kind contributions and third-party contributions and must meet the requirement found at 2 CFR 200.306, 2 CFR 200.403, 2 CFR 200.434, and 2 CFR 2900.8. 2 CFR 2900.8 requires that match is recognized at the time in which the funds are expended. The matching funds are required to be reported in the quarterly financial reports submitted by the Company. Condition The Company did not record in-kind matching funds contributions and related expense for the year ending June 30, 2024. In addition, the Company did not report their in-kind matching funds contributions or the related expenses on the quarterly financial report to the Department of Labor. Cause Internal controls over reporting of in-kind contributions and in-kind expenses were not operating effectively. Effect This resulted in an understatement of revenue and expense of $702,250 for the year ending June 30, 2024. In addition, the Company was not in compliance with the reporting requirements of the YouthBuild program. Questioned Costs N/A. Context A sample of 2 financial reports out of 2 financial reports required during the year ended June 30, 2024 did not report the in-kind contribution of matching funds. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation We recommend that management reviews its internal controls over reporting of the ETA-9130 Financial Report to ensure complete and accurate reports. Additionally, we recommend that management strengthens its policies and procedures to ensure proper recognition and recording of revenue from in-kind contributions and related expenses. Views of Responsible Officials The Crenulated will request a quarterly in-kind contribution report from DOE and will ensure the in-kind contributions are recorded in the financial statements. The Crenulated plans to hire an in-house
Finding Reference Number: 2024-008 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02, F21AF04100-02, F21AF03886-03 Federal Award Year: 2021, 2022, 2023 U.S. Department of Interior Compliance Requirement: Matching Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria In-kind match requirement is to test records to corroborate the values placed on in-kind contributions (including third party in-kind contributions) are in accordance with 2 CFR 200.306, 200.434, and 200.414, and the terms and conditions of the award. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To meet the federal match required under the program, the New Hampshire Fish and Game Department (the Department) utilizes in-kind match that is earned from volunteer hours and costs contributed by its third party subrecipient. During our testwork over in-kind match, we identified the following: A. For 7 of 9 subrecipient invoices selected for testwork used to support the Department’s in-kind match, we were unable to obtain documentation to support the amount of the in-kind match earned. For each of the 7 sample selections, the value of the in-kind contribution was handwritten on the subrecipient's invoice for unrelated services. There was no documentation obtained to support the accuracy of this handwritten amount. Upon inquiry, the Department confirmed that no further verification was performed to ensure the subrecipient's in-kind match was accurate and based upon costs in support of the grant associated with the in-kind match. B. For 1 of 4 volunteer in-kind match contribution calculations, the Department incorrectly allocated volunteer hours using the prior fiscal year rates, resulting in an excess of in-kind match being recorded as earned. In addition, we were unable to verify the existence of 1 of the volunteer timesheets used in this calculation for this sample selection. Cause The cause of the condition found is primarily due to insufficient internal controls to ensure that the value of the match contributed by its subrecipient is complete and accurate. Due to the long-standing and collaborative relationship between the Department and the subrecipient, the Department has not developed or implemented formalized policies and procedures related to validating the existence of in-kind match earned. Further, related to the volunteer hours, the cause of the condition is due to human error. With over 250 timesheets to process, the volume of data and calculations are susceptible to error. Effect The effect of the condition found is that the Department did not have appropriate documentation to support the in-kind match earned and applied against its federal award in support of federal funds that were drawn. This could lead to unallowable costs being charged to the grant if the sufficient match was not made. Questioned Costs: $201,250 Recommendation We recommend that the Department implement written policies and procedures surrounding the tracking of in-kind match. Internal controls should be implemented to ensure the accuracy of the in-kind match earned, including ensuring that there is supporting documentation to substantiate the amount earned. The existing policies and procedures should also be enhanced related to volunteer time to monitor to ensure that all required timesheets are completed before using the volunteer time in support of its matching requirement and that the appropriate rate is used when determining the value of the volunteer in-kind match. View of Responsible Officials: Management concurs with this finding except for the questioned cost amount. Rejoinder: As documented within the condition found, we were unable to obtain sufficient documentation to support in-kind matching costs. As a result of our audit procedures, we identified questioned costs of $201,250.
Finding Reference Number: 2024-008 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02, F21AF04100-02, F21AF03886-03 Federal Award Year: 2021, 2022, 2023 U.S. Department of Interior Compliance Requirement: Matching Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria In-kind match requirement is to test records to corroborate the values placed on in-kind contributions (including third party in-kind contributions) are in accordance with 2 CFR 200.306, 200.434, and 200.414, and the terms and conditions of the award. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To meet the federal match required under the program, the New Hampshire Fish and Game Department (the Department) utilizes in-kind match that is earned from volunteer hours and costs contributed by its third party subrecipient. During our testwork over in-kind match, we identified the following: A. For 7 of 9 subrecipient invoices selected for testwork used to support the Department’s in-kind match, we were unable to obtain documentation to support the amount of the in-kind match earned. For each of the 7 sample selections, the value of the in-kind contribution was handwritten on the subrecipient's invoice for unrelated services. There was no documentation obtained to support the accuracy of this handwritten amount. Upon inquiry, the Department confirmed that no further verification was performed to ensure the subrecipient's in-kind match was accurate and based upon costs in support of the grant associated with the in-kind match. B. For 1 of 4 volunteer in-kind match contribution calculations, the Department incorrectly allocated volunteer hours using the prior fiscal year rates, resulting in an excess of in-kind match being recorded as earned. In addition, we were unable to verify the existence of 1 of the volunteer timesheets used in this calculation for this sample selection. Cause The cause of the condition found is primarily due to insufficient internal controls to ensure that the value of the match contributed by its subrecipient is complete and accurate. Due to the long-standing and collaborative relationship between the Department and the subrecipient, the Department has not developed or implemented formalized policies and procedures related to validating the existence of in-kind match earned. Further, related to the volunteer hours, the cause of the condition is due to human error. With over 250 timesheets to process, the volume of data and calculations are susceptible to error. Effect The effect of the condition found is that the Department did not have appropriate documentation to support the in-kind match earned and applied against its federal award in support of federal funds that were drawn. This could lead to unallowable costs being charged to the grant if the sufficient match was not made. Questioned Costs: $201,250 Recommendation We recommend that the Department implement written policies and procedures surrounding the tracking of in-kind match. Internal controls should be implemented to ensure the accuracy of the in-kind match earned, including ensuring that there is supporting documentation to substantiate the amount earned. The existing policies and procedures should also be enhanced related to volunteer time to monitor to ensure that all required timesheets are completed before using the volunteer time in support of its matching requirement and that the appropriate rate is used when determining the value of the volunteer in-kind match. View of Responsible Officials: Management concurs with this finding except for the questioned cost amount. Rejoinder: As documented within the condition found, we were unable to obtain sufficient documentation to support in-kind matching costs. As a result of our audit procedures, we identified questioned costs of $201,250.
Finding Reference Number: 2024-008 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02, F21AF04100-02, F21AF03886-03 Federal Award Year: 2021, 2022, 2023 U.S. Department of Interior Compliance Requirement: Matching Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria In-kind match requirement is to test records to corroborate the values placed on in-kind contributions (including third party in-kind contributions) are in accordance with 2 CFR 200.306, 200.434, and 200.414, and the terms and conditions of the award. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To meet the federal match required under the program, the New Hampshire Fish and Game Department (the Department) utilizes in-kind match that is earned from volunteer hours and costs contributed by its third party subrecipient. During our testwork over in-kind match, we identified the following: A. For 7 of 9 subrecipient invoices selected for testwork used to support the Department’s in-kind match, we were unable to obtain documentation to support the amount of the in-kind match earned. For each of the 7 sample selections, the value of the in-kind contribution was handwritten on the subrecipient's invoice for unrelated services. There was no documentation obtained to support the accuracy of this handwritten amount. Upon inquiry, the Department confirmed that no further verification was performed to ensure the subrecipient's in-kind match was accurate and based upon costs in support of the grant associated with the in-kind match. B. For 1 of 4 volunteer in-kind match contribution calculations, the Department incorrectly allocated volunteer hours using the prior fiscal year rates, resulting in an excess of in-kind match being recorded as earned. In addition, we were unable to verify the existence of 1 of the volunteer timesheets used in this calculation for this sample selection. Cause The cause of the condition found is primarily due to insufficient internal controls to ensure that the value of the match contributed by its subrecipient is complete and accurate. Due to the long-standing and collaborative relationship between the Department and the subrecipient, the Department has not developed or implemented formalized policies and procedures related to validating the existence of in-kind match earned. Further, related to the volunteer hours, the cause of the condition is due to human error. With over 250 timesheets to process, the volume of data and calculations are susceptible to error. Effect The effect of the condition found is that the Department did not have appropriate documentation to support the in-kind match earned and applied against its federal award in support of federal funds that were drawn. This could lead to unallowable costs being charged to the grant if the sufficient match was not made. Questioned Costs: $201,250 Recommendation We recommend that the Department implement written policies and procedures surrounding the tracking of in-kind match. Internal controls should be implemented to ensure the accuracy of the in-kind match earned, including ensuring that there is supporting documentation to substantiate the amount earned. The existing policies and procedures should also be enhanced related to volunteer time to monitor to ensure that all required timesheets are completed before using the volunteer time in support of its matching requirement and that the appropriate rate is used when determining the value of the volunteer in-kind match. View of Responsible Officials: Management concurs with this finding except for the questioned cost amount. Rejoinder: As documented within the condition found, we were unable to obtain sufficient documentation to support in-kind matching costs. As a result of our audit procedures, we identified questioned costs of $201,250.
2024-022 - Inadequate Controls over and Noncompliance with Matching and Reporting Requirements Related to the Cost Share Process State Entity: Louisiana Department of Health (LDH) Award Year: 2024 Award Number: 2405LA5MAP Compliance Requirements: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: The Louisiana Department of Health (LDH) did not have adequate controls in place to ensure the Federal Medical Assistance Percentage (FMAP) was appropriately updated in the cost share tables within LaGov for two out of four quarters (50%) in fiscal year ending June 30, 2024 for the Medical Assistance Program (Medicaid). The FMAP rate in the cost share tables was 1.5% higher than the rates established in the Federal Register for the quarters ending March 31, 2024 and June 30, 2024. Criteria: The state is required to pay part of the costs of providing Medicaid services and part of the costs of administering the program. The percentage of federal funding is determined based on the amount of the expenditures and application of the FMAP that is determined for each state using a formula outlined in section 1905(b) of the Act (42 USC 1396d). 2 CFR 200.306(b) states that the basic criteria for acceptable matching include that the funds are verifiable from the non-federal entity’s records, are not included as contributions for any other federal award, and are not paid by the federal government under another federal award. The CMS-64 quarterly federal expenditure report requires the state to certify that the required amount of state and/or local funds were available and used to match the state’s allowable expenditures included in the report, and such state and/or local funds were in accordance with all applicable federal requirements for the non-federal share match of expenditures. The CMS-64 report also requires the state to certify that the expenditures included in the report are based on the state's accounting of actual recorded expenditures. Cause: The cost share tables that automatically calculate the federal and state share of expenditures were not properly updated for the period January 1, 2024 through June 30, 2024. Effect: Using the incorrect FMAP to allocate the state share of expenditures caused more expenditures to be allocated to federal funds. This error resulted in federal questioned costs of $87,591,863. Due to this, LDH was unable to provide evidence that the state match requirement was met for the federal expenditures reported on the March 31, 2024 and June 30, 2024 CMS-64 federal expenditure reports. Recommendation: LDH management should ensure the cost share tables are appropriately updated for all periods during the fiscal year. In addition, LDH should strengthen controls over preparation and review of the quarterly CMS-64 federal expenditure reports to ensure that the appropriate federal match is applied to qualifying expenditures and the required amount of state and/or local funds are available and used to match the state’s allowable expenditures. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-10).