FINDING 2023-008 MDHHS, PACAP - Inappropriate PACAP Allocation See Schedule of Findings and Questioned Costs for chart/table. Condition MDHHS did not ensure it used the appropriate Public Assistance Cost Allocation Plan (PACAP) data to allocate expenditures to its federal programs. We noted: a. 2 (1%) of 203 statistic groups for which MDHHS used incorrect data to calculate the PACAP percentages, which affected 6 (40%) of 15 sampled cost pools. b. 2 (13%) of 16 Random Moment Time Studies, which MDHHS used to calculate PACAP percentages, did not have a complete population of participants, which affected 6 (40%) of 15 sampled cost pools. Criteria Federal regulation 45 CFR 95.507 and Appendix VI of federal regulation 2 CFR 200 state costs are allocable to a particular cost objective if the services involved are chargeable or assignable to such cost objective in accordance with relative benefits received. Federal regulation 45 CFR 95.517 requires MDHHS to claim federal financial participation for costs associated with a program only in accordance with its approved or amended (at its discretion) PACAP. Federal regulation 2 CFR 200.306 requires that costs used for matching be allowable costs to the federal award. Cause MDHHS informed us its current quality control processes did not detect the errors. Effect MDHHS incorrectly allocated expenditures to various federal programs. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs Undeterminable. Recommendation We recommend MDHHS ensure it uses the appropriate PACAP data to allocate expenditures to its federal programs. Management Views MDHHS disagrees the exceptions identified should rise to the level of a significant deficiency and noncompliance. The comprehensive set of quality control processes continue to operate as designed to identify any errors greater than 5.0% of the total difference of the given statistical group from the previous quarter and none of the errors identified in the finding fell outside of this range. For part a., the auditor's review included all related statistical records within each statistical group for the 15 sampled cost pools. This includes all statistics used in the cost allocation process for the entire fiscal year because the costs that originate in these cost pools are referenced in all other cost pools. After review of all fiscal year 2023 statistical data, 6 individual statistical records out of 6,548 were found to be in error. After recalculating the cost allocated amounts related to this error, we identified that approximately $15,346 was overclaimed to LIHEAP out of $1,732,426,561 (0.0009%) of costs allocated in fiscal year 2023 by MDHHS. The other program areas identified were underclaimed. For part b., MDHHS acknowledges the exclusion of a participant from two quarters (quarter three and quarter four) of the Family Independence Specialists/Eligibility Specialists (FIS/ES) Random Moment Time Study (RMTS) in the sample. Although the actual dollar value impact of excluding a participant is indeterminable, MDHHS concluded the impact would be immaterial because there are over 6,000 RMTS participants each quarter and RMTS results vary little from quarter to quarter from non-programmatic changes. Auditor's Comments to Management Views For part a., we calculated the cost allocated amounts related to the error and identified that approximately $17,317 was overclaimed to LIHEAP out of $141.0 million of second quarter expenditures. However, in combination with part b., we could not conclude overclaims for other federal programs were less than $25,000. For part b., MDHHS used incomplete data to allocate approximately $143.5 million of third quarter expenditures and $171.2 million of fourth quarter expenditures for a total of $314.6 million to various federal and State programs, which may have affected the percentages used to allocate these expenditures. MDHHS did not assess the impact of these incomplete records. Consequently, it has no basis for its "immaterial" statement. Given the errors noted in parts a. and b., we could not determine the combined known questioned costs; however, it is likely that the improper allocation related to the $455.7 million exceeds $25,000 for the federal programs identified. Federal regulation 2 CFR 200.516(a)(3) states that in evaluating the effect of questioned costs on the opinion on noncompliance, the auditor considers the best estimate of total questioned costs (likely questioned costs), not just the questioned costs specifically identified (known questioned costs). The auditor must also report audit findings for known questioned costs when likely questioned costs are greater than $25,000 for a type of compliance requirement for a major program. Therefore, the finding stands as written.
AL Numbers: 10.760, 93.575 Name of Federal Program or Cluster: Water and Waste Disposal Systems for Rural Communities, Xhild Care and Development Block Grant – CCDF Cluster and COVID-19 CCDF Cluster Award Number: Multiple, 21PANDCCDF,22PANDCCDD, 23PANDCCDD Award Year: 2021, 2022, 2023 Criteria – In accordance with the Tribe’s grant award requirements and the Uniform Guidance 2 CFR 200.306, the Tribe must have internal controls over and ensure compliance with any federal cost-sharing/matching and earmarking requirements. Additionally, for the CCDF Cluster program, Tribal lead agencies must spend at least 12% of the total CCDF program expenditures on quality improvement activities. Tribal lead agencies must spend 3% of the 12% on activities to increase the quality of care for infants and toddlers. Condition and context – We noted the following for each program: ALN 10.760 – The program was unable to provide us evidence of monitoring of or compliance with the Tribe’s cost-sharing contributions for the program’s operations. ALN 93.575 – The program did not meet the minimum threshold of 12% on quality improvement activities during the year ended September 30, 2023. Additionally, the program did not monitor expenditures against the 3% threshold on quality improvement activities to increase the quality of care for infants and toddlers. Cause – Inadequate internal controls over cost-sharing and earmarking requirements may have led to this finding. Questioned costs – There are no questioned costs to report related to this finding. Effect – The Tribe could be subject to repayment of funds for not meeting cost-sharing and earmarking requirements. Repeat finding – This is a repeat finding for the CCDF Cluster program and was reported in the prior year as finding 2022-004. Recommendation – The programs should establish and implement internal controls over cost-sharing and earmarking requirements and implement a supervisory review over these requirements. Views of responsible officials and planned corrective actions – ALN 10.760: The Program will work with the Finance Department to thoroughly review the grant award documentation for any cost-sharing contribution requirements. If identified, this requirement will be marked on the intake form and tracked by the Finance Department. ALN 93.575: The Program satisfied these matching requirements in fiscal year 2024. In future awards, the Program will ensure that the match requirements are met in the appropriate period of performance.
AL Numbers: 10.760, 93.575 Name of Federal Program or Cluster: Water and Waste Disposal Systems for Rural Communities, Xhild Care and Development Block Grant – CCDF Cluster and COVID-19 CCDF Cluster Award Number: Multiple, 21PANDCCDF,22PANDCCDD, 23PANDCCDD Award Year: 2021, 2022, 2023 Criteria – In accordance with the Tribe’s grant award requirements and the Uniform Guidance 2 CFR 200.306, the Tribe must have internal controls over and ensure compliance with any federal cost-sharing/matching and earmarking requirements. Additionally, for the CCDF Cluster program, Tribal lead agencies must spend at least 12% of the total CCDF program expenditures on quality improvement activities. Tribal lead agencies must spend 3% of the 12% on activities to increase the quality of care for infants and toddlers. Condition and context – We noted the following for each program: ALN 10.760 – The program was unable to provide us evidence of monitoring of or compliance with the Tribe’s cost-sharing contributions for the program’s operations. ALN 93.575 – The program did not meet the minimum threshold of 12% on quality improvement activities during the year ended September 30, 2023. Additionally, the program did not monitor expenditures against the 3% threshold on quality improvement activities to increase the quality of care for infants and toddlers. Cause – Inadequate internal controls over cost-sharing and earmarking requirements may have led to this finding. Questioned costs – There are no questioned costs to report related to this finding. Effect – The Tribe could be subject to repayment of funds for not meeting cost-sharing and earmarking requirements. Repeat finding – This is a repeat finding for the CCDF Cluster program and was reported in the prior year as finding 2022-004. Recommendation – The programs should establish and implement internal controls over cost-sharing and earmarking requirements and implement a supervisory review over these requirements. Views of responsible officials and planned corrective actions – ALN 10.760: The Program will work with the Finance Department to thoroughly review the grant award documentation for any cost-sharing contribution requirements. If identified, this requirement will be marked on the intake form and tracked by the Finance Department. ALN 93.575: The Program satisfied these matching requirements in fiscal year 2024. In future awards, the Program will ensure that the match requirements are met in the appropriate period of performance.
Per the terms of the award, PAX agreed to expend a share of the total program cost financed by PAX and others from non-federal funds in accordance with 2 CFR 200.306. PAX’s books and records did not contain the necessary information to verify whether this matching requirement was met.
Finding Number: 2023-020 Prior Year Finding Number: 2022-021 Compliance Requirement: Matching, Level of Effort, Earmarking Program: U.S. Department of Agriculture Government Department/Agency: Department of Human Services (DHS) Supplemental Nutrition Assistance Program Cluster (SNAP) ALN: 10.551, 10.561 Award #: Various Award Period: 10/01/21 - 09/30/22 10/01/22 – 09/30/23 Criteria – CFR Section 200.303, Internal Controls, (a) states DHS must establish and maintain effective internal control over federal awards that provides reasonable assurance that DHS is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its matching process. Further, 2 CFR Section 200.306 provides detailed criteria for acceptable matching costs. The basic criteria for acceptable matching costs include costs that are necessary and reasonable for accomplishment of program objectives and are allowed under 2 CFR Part 200, Subpart E (Cost Principles). Condition – We found that DHS was unable to readily exhibit and provide evidence that it met the matching requirement or monitored compliance with the matching requirement. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with the specified requirements and general compliance principles. Effect – DHS is not in compliance with the stated provisions. Without adequate internal controls to ensure compliance with matching requirements, there is an increased risk that matching will not be properly applied and funding could be jeopardized. Cause – DHS does not appear to have adequate policies and procedures in place to ensure complete compliance with the matching requirement. Further, lack of monitoring of the match requirement appears to be the result of significant personnel turnover and lack of staffing. Recommendation – We recommend that DHS deploy resources that are given the responsibility to ensure periodic monitoring and compliance of the matching requirement throughout the fiscal year. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. While the ERP provides an overall expense report, a specific liquidation report has been developed to ensure that matching is completed with each report submission. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2023-051 Prior Year Finding Number: 2022-047 Compliance Requirement: Matching, Level of Effort, Earmarking Program: U.S. Department of Education Government Department/Agency: Department of Education (VIDE) Special Education Cluster ALN: 84.027A, 84.027X Award #: Various Award Period: Various Criteria – The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, 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. Further, in accordance with the Uniform Guidance in 2 CFR Section 200.306, a State may not reduce the amount of State financial support for special education and related services for children with disabilities (or State financial support otherwise made available because of the excess costs of educating those children) below the amount of State financial support provided for the preceding fiscal year. The Secretary reduces the allocation of funds under 20 USC 1411 for any fiscal year following the fiscal year in which the State fails to comply with this requirement by the amount by which the State failed to meet the requirement. Additionally, an LEA can use not more than 15% of the amount of federal Part B funds the LEA receives for any fiscal year (less any amount by which it reduces its expenditures under 20 USC 1413(a)(2)(C)) (see III.G.2.1.b.(6) in this section), in combination with other funds, to develop and implement, early intervening services for children in kindergarten through grade 12 who have not been identified under IDEA but need additional academic and behavioral support to succeed in the general education environment (20 USC 1413(f); 34 CFR section 300.226). Condition – We reviewed the level of effort calculations and noted the following: - At the Local Education Agency (LEA) level, we noted that although the two LEAs appeared to meet the required financial support thresholds on the per child basis based on the level of effort compliance requirement, we were unable to verify the number of students for each LEA. - At the State Education Agency (SEA) level, we were unable to review documentation that included the approval /certification of the amounts in the Maintenance of Financial support at the State Education level. In addition, although the calculation shows that VIDE met the Maintenance of Effort at the State level, we were unable to review documentation that would allow us to verify the number of students served in the current year. We reviewed the earmarking documentation and noted the following: - At the State Education Agency (SEA) level, for the non-ARP grant, we were unable to verify the total numbers of students and the number of students in poverty. We were therefore unable to confirm that the allocation of the remaining funds to the LEA agreed with the relative numbers of children living in poverty. As a result, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the level of effort and earmarking compliance requirement. Questioned Costs – Not determinable. Context – This is a condition identified per review of VIDE’s compliance with the specified requirements. Effect – VIDE is not in compliance with the stated provisions. Without adequate internal controls to ensure compliance with level of effort requirements and earmarking, there is an increased risk that level of effort and earmarking requirements will not be properly applied, and funding could be jeopardized. Cause – VIDE did not appear to have adequate policies and procedures in place to ensure consistent and systematic monitoring of the requirements. Recommendation – We recommend that VIDE improve internal controls to ensure adherence to federal regulations relating to the level of effort and earmarking requirements at the SEA and LEA levels by deploying resources that are given the responsibility to ensure periodic monitoring and compliance of the level of effort and earmarking requirements. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. VIDE will establish a team for quarterly reviews of documentation, report issues, and recommend corrective actions. The IDEA State Office will set procedures for verifying accuracy of data reported by LEAs. Comprehensive staff training will ensure understanding of new policies and procedures. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Federal Agency: U.S Department of Transportation Assistance Listing Program: 20.106 Airport Improvement Program Federal Award Nos.: 3-68-0001-020-2019, 3-68-0001-025-2022 Area: Matching, Level of Effort, and Earmarking Questioned Costs: $152,120 Criteria: All match funding must be provided in compliance with the requirements of 2 CFR Part 200.306. The grantee’s share of project costs on an AIP grant (also known as cost share) is defined in 49 USC 47109 and set forth in the grant award. The nonfederal share varies by airport size and is generally 25 percent for large and medium hub airports and 10 percent for all other airports. Acceptable match, whether cash or in-kind, must be allowable and eligible. In addition, match must be provided by the recipient; or provided as cash by a third party; or provided as in-kind by a third party; or any combination of cash and in-kind provided by the recipient and/or a third party. Condition: For 3 (or 34%) items tested, the Authority did not consider matching requirements upon request for reimbursement and submission of related signed/dated SF-270 or SF-271 to the Federal Aviation Administration. Consideration of matching requirements for these transactions were subsequently corrected only during the audit process. Cause: The Authority lacks internal control policies and procedures compliance with applicable matching, level of effort, earmarking requirements relative to matching requirements. Effect: The Authority is in noncompliance with applicable matching requirements. Total questioned costs amounted to $152,120. Recommendation: We recommend the Authority’s responsible personnel to establish internal control policies and procedures to require monitoring of matching requirements prior to the submission of request for reimbursement. Views of Responsible Officials and Corrective Action Plan: The Authority agrees with the finding and provides details in its Corrective Action Plan.
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
Department of Health and Human Services FFLA #93.087, 90CU0090, 9/30/2020 – 9/29/2023; 90CU0095, 9/30/2018 – 9/29/2024 Enhance Safety of Children Affected by Substance Abuse Matching Significant Deficiency in Internal Control over Compliance 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 conditions of the federal award. In addition, 2 CFR 200.306 establishes that matching funds be verifiable from the non-federal entity’s records and are allowable under Subpart E – Cost Principles and 2 CFR 200.403(g) establishes that costs be adequately documented. Condition: In our sample of expenditures selected for testing, we noted the following items: a) The number of hours an employee worked per the approved timesheet vs. the hours claimed in the match claim workbook resulted in a clerical error. (1 instance) b) Per review of the supporting timesheet and paystub, an employee had mobile crisis pay which was not accurately reduced in the calculation for match in the match claim workbook (2 instances). Cause: The secondary review of match claim workbook did not identify the clerical errors. Effect: The Center’s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Center could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. The program was underallocated. Context: A total non-statistical sample of 25 match transactions were tested which accounted for $97,208 out of $488,366 of federal match direct program expenditures. Repeat Finding from Prior Year: No. Recommendation: We recommend management review the procedures and control processes involving the match claim workbook to ensure compliance with the federal grant. Views of Responsible Officials: Management is in agreement.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.
2023-005: Indirect Costs Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Value-Based Medical Student Education Training Program Assistance Listing Number: 93.680 Award Number and Year: T99HP39200 (July 1, 2020 – June 30, 2024) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Applicable Institution: University of Mississippi Medical Center (UMMC) Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance – Per 2 CFR § 200.403, except where otherwise authorized by statute, costs must meet the following general criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award to be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award regarding 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 non-Federal entity. (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 Cost sharing or matching paragraph (b). (g) Be adequately documented. See also §§200.300 Statutory and national policy requirements through 200.309 Period of performance of this part. Condition: Indirect cost expense was improperly calculated. Questioned Costs: None Context: This condition occurred for the one award in our population. Cause: A transition to a new ERP system resulted in issues with calculating F&A according to our negotiated rate agreement. As a result, we recalculate F&A on each project when invoicing or reporting. This F&A entry was identified; however, it was not made timely. Effect: Indirect costs may be incorrectly charged to the program. Repeat Finding: No Recommendation: We recommend the institution strengthen its internal controls to ensure that calculations are reviewed and adjusted for, if necessary, in a timely manner. Views of Responsible Officials: There is no disagreement with the audit finding.
2023-003 – Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. 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 non-Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Condition: During our audit, we noted that three (3) out of forty (40) samples summed up to $39,055.50 had no proper source documents to support the transactions charged to the grant brought by lost official receipts, hence, identified as not adequately documented. Alternatively, the City created a memo to document the loss of receipts signed by the department head. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable cost $39,056 and the estimated questionable cost is projected to be $69,269. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding.
Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Education Department: Portsmouth Public Schools (PPS) Federal Program: Special Education Cluster (IDEA) Assistance Listing: 84.027, 84.173 Federal Award Identification Number and Year: None, 2021, 2022, 2023 Pass-Through Entity: Commonwealth of Virginia Department of Education Pass-Through Award Number and Period: H027A200107 (7/1/20-9/30/22) H027A210107 (7/1/21-9/30/23) H027X210107 (7/1/21-9/30/23) H027A220107 (4/17/23-9/30/23) H173A200107 (7/1/20-9/30/22) H173A210107 (7/1/21-9/30/23) H173X210107 (7/1/21-9/30/23) Compliance Requirement: Allowable Costs/Cost Principles (Time and Effort Certifications) Type of Finding: Material Weakness in Internal Control over Compliance, Maternal Non-Compliance Criteria or specific requirement: Compliance – Per 2 CFR section 403, 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 non-Federal entity. (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). (f) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Control – Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: PPS was unable to provide documentation supporting time and effort for employee’s salary charged to the grant. We were unable to support the allowable salary reported on the grant due to lack of time and effort certification. Context For 13 out of 40 employee’s salary selected for testing were not supported by time and effort certification. Questioned costs: $30,763, represents the employee’s salary charged to the federal program and not supported by time and effort certification. Cause: PPS did not maintain documentation supporting time and effort for employee pay charged to the grant. Effect: Failure to adhere to allowable cost requirements may result in PPS charging expenditures to the program that are not allowable. Recommendation: We recommend that PPS enhance its procedures and internal controls to ensure that it retains documentation supporting time and effort on federal grants and that this documentation is available for audit purposes. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Education Department: Portsmouth Public Schools (PPS) Federal Program: Special Education Cluster (IDEA) Assistance Listing: 84.027, 84.173 Federal Award Identification Number and Year: None, 2021, 2022, 2023 Pass-Through Entity: Commonwealth of Virginia Department of Education Pass-Through Award Number and Period: H027A200107 (7/1/20-9/30/22) H027A210107 (7/1/21-9/30/23) H027X210107 (7/1/21-9/30/23) H027A220107 (4/17/23-9/30/23) H173A200107 (7/1/20-9/30/22) H173A210107 (7/1/21-9/30/23) H173X210107 (7/1/21-9/30/23) Compliance Requirement: Allowable Costs/Cost Principles (Time and Effort Certifications) Type of Finding: Material Weakness in Internal Control over Compliance, Maternal Non-Compliance Criteria or specific requirement: Compliance – Per 2 CFR section 403, 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 non-Federal entity. (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). (f) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Control – Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: PPS was unable to provide documentation supporting time and effort for employee’s salary charged to the grant. We were unable to support the allowable salary reported on the grant due to lack of time and effort certification. Context For 13 out of 40 employee’s salary selected for testing were not supported by time and effort certification. Questioned costs: $30,763, represents the employee’s salary charged to the federal program and not supported by time and effort certification. Cause: PPS did not maintain documentation supporting time and effort for employee pay charged to the grant. Effect: Failure to adhere to allowable cost requirements may result in PPS charging expenditures to the program that are not allowable. Recommendation: We recommend that PPS enhance its procedures and internal controls to ensure that it retains documentation supporting time and effort on federal grants and that this documentation is available for audit purposes. Views of responsible officials: Management agrees with the finding.
2023-003 Unallowable Matching Contributions – Compliance and Internal Controls over Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.306(b) any shared costs or matching funds and all contributions cannot be included as contributions for any other Federal award. They also cannot be paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs. Condition: The Association used the same matching contributions on both FALN 10.561 and FALN 14.231. Additionally, some matching contributions under FALN 10.561 were paid by the Federal Government under another Federal award. Effect: The lack of processes and controls set up to track matching contributions resulted in potentially unallowable matching contributions made to both FALN 10.561 and FALN 14.231. Cause: The Association was not aware of the requirements related to matching and did not have processes and controls set up to track this information. Questioned Costs: None Perspective: This finding represents a systemic problem as it potentially affects the matching requirement across all federal programs. Repeat Finding: Yes, this is a repeat of 2022-003 Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2023-003 Unallowable Matching Contributions – Compliance and Internal Controls over Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.306(b) any shared costs or matching funds and all contributions cannot be included as contributions for any other Federal award. They also cannot be paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs. Condition: The Association used the same matching contributions on both FALN 10.561 and FALN 14.231. Additionally, some matching contributions under FALN 10.561 were paid by the Federal Government under another Federal award. Effect: The lack of processes and controls set up to track matching contributions resulted in potentially unallowable matching contributions made to both FALN 10.561 and FALN 14.231. Cause: The Association was not aware of the requirements related to matching and did not have processes and controls set up to track this information. Questioned Costs: None Perspective: This finding represents a systemic problem as it potentially affects the matching requirement across all federal programs. Repeat Finding: Yes, this is a repeat of 2022-003 Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2023-003 Unallowable Matching Contributions – Compliance and Internal Controls over Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.306(b) any shared costs or matching funds and all contributions cannot be included as contributions for any other Federal award. They also cannot be paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs. Condition: The Association used the same matching contributions on both FALN 10.561 and FALN 14.231. Additionally, some matching contributions under FALN 10.561 were paid by the Federal Government under another Federal award. Effect: The lack of processes and controls set up to track matching contributions resulted in potentially unallowable matching contributions made to both FALN 10.561 and FALN 14.231. Cause: The Association was not aware of the requirements related to matching and did not have processes and controls set up to track this information. Questioned Costs: None Perspective: This finding represents a systemic problem as it potentially affects the matching requirement across all federal programs. Repeat Finding: Yes, this is a repeat of 2022-003 Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2023-003 Unallowable Matching Contributions – Compliance and Internal Controls over Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.306(b) any shared costs or matching funds and all contributions cannot be included as contributions for any other Federal award. They also cannot be paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs. Condition: The Association used the same matching contributions on both FALN 10.561 and FALN 14.231. Additionally, some matching contributions under FALN 10.561 were paid by the Federal Government under another Federal award. Effect: The lack of processes and controls set up to track matching contributions resulted in potentially unallowable matching contributions made to both FALN 10.561 and FALN 14.231. Cause: The Association was not aware of the requirements related to matching and did not have processes and controls set up to track this information. Questioned Costs: None Perspective: This finding represents a systemic problem as it potentially affects the matching requirement across all federal programs. Repeat Finding: Yes, this is a repeat of 2022-003 Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2023-003 Unallowable Matching Contributions – Compliance and Internal Controls over Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.306(b) any shared costs or matching funds and all contributions cannot be included as contributions for any other Federal award. They also cannot be paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs. Condition: The Association used the same matching contributions on both FALN 10.561 and FALN 14.231. Additionally, some matching contributions under FALN 10.561 were paid by the Federal Government under another Federal award. Effect: The lack of processes and controls set up to track matching contributions resulted in potentially unallowable matching contributions made to both FALN 10.561 and FALN 14.231. Cause: The Association was not aware of the requirements related to matching and did not have processes and controls set up to track this information. Questioned Costs: None Perspective: This finding represents a systemic problem as it potentially affects the matching requirement across all federal programs. Repeat Finding: Yes, this is a repeat of 2022-003 Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2023-003 Unallowable Matching Contributions – Compliance and Internal Controls over Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.306(b) any shared costs or matching funds and all contributions cannot be included as contributions for any other Federal award. They also cannot be paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs. Condition: The Association used the same matching contributions on both FALN 10.561 and FALN 14.231. Additionally, some matching contributions under FALN 10.561 were paid by the Federal Government under another Federal award. Effect: The lack of processes and controls set up to track matching contributions resulted in potentially unallowable matching contributions made to both FALN 10.561 and FALN 14.231. Cause: The Association was not aware of the requirements related to matching and did not have processes and controls set up to track this information. Questioned Costs: None Perspective: This finding represents a systemic problem as it potentially affects the matching requirement across all federal programs. Repeat Finding: Yes, this is a repeat of 2022-003 Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2023-003 Unallowable Matching Contributions – Compliance and Internal Controls over Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.306(b) any shared costs or matching funds and all contributions cannot be included as contributions for any other Federal award. They also cannot be paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs. Condition: The Association used the same matching contributions on both FALN 10.561 and FALN 14.231. Additionally, some matching contributions under FALN 10.561 were paid by the Federal Government under another Federal award. Effect: The lack of processes and controls set up to track matching contributions resulted in potentially unallowable matching contributions made to both FALN 10.561 and FALN 14.231. Cause: The Association was not aware of the requirements related to matching and did not have processes and controls set up to track this information. Questioned Costs: None Perspective: This finding represents a systemic problem as it potentially affects the matching requirement across all federal programs. Repeat Finding: Yes, this is a repeat of 2022-003 Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
Knott County Fiscal Court Did Not Maintain Proper FEMA Documentation Federal Program: Assistance Listing #97.036 FEMA Public Assistance Program Award Number and Year: FEMA-4663DRKYP00000001 2022 Name of Federal Agency and Pass-Thru Agency: U. S. Department of Homeland Security and State Department of Military Affairs Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Type of Finding: Material Weakness, Noncompliance Amount of Questioned Costs: $1,212,805 COVID Related: No Knott County had severe flooding in July of 2022. This event qualified Knott County Fiscal Court to receive federal funding to recover from the disaster. Paperwork is maintained to document and track work that is necessary and to determine the portion eligible for coverage by FEMA. The fiscal court did not maintain proper FEMA documentation. Out of 36 disbursements tested, 11 did not have any accompanying information that would detail the expected scope of work or cost. The 11 disbursements that did not have appropriate documentation totaled $1,212,805 in questioned cost. The fiscal court has not sufficiently overseen the expenditure of federal funds and did not prioritize the implementation of an effective internal control system. Tracking of the FEMA projects was consistently executed on completed projects but was not available for the in-progress projects that were tested. The lack of documentation to appropriately connect the disbursements to FEMA authorized work resulted in the determination that the county was not in compliance with the applicable attributes. An inaccurate implementation of controls and the lack of management oversight and involvement can cause noncompliance with federal requirements and jeopardize the fiscal court’s future funding. The lack of appropriate documentation also prevented the ability to rely on supplementary information, such as the Schedule of Expenditures of Federal Awards. 2 CFR part 200 Uniform Administrative Requirements, Cost Principles, And Audit Requirements For Federal Awards provides guidance on Federal regulations pertaining to Federal Awards. 2 CFR 200.306, regarding cost sharing or matching, states that any shared costs or matching funds must meet all of the following criteria: verifiable from the non-Federal entity’s records; not included as contributions for any other Federal award; necessary and reasonable for accomplishment of project or program objectives; allowable under subpart E of this part; not paid by the Federal Government under another Federal award except where allowed; provided for in the approved budget when required by the Federal awarding agency; and conform to other provisions of this part, as applicable. 2 CFR 200.318(i), regarding general procurement standards, requires Non-Federal entities to maintain records sufficient to detail the history of procurement. These records will include, but are not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.329, concerning monitoring and reporting program performance, states that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function, or activity. We recommend the Knott County Fiscal Court implement adequate internal controls to ensure federal compliance requirements are met. In addition, the fiscal court should maintain documentation for all project activity to effectively track work that is necessary and to determine the portion eligible for coverage under Federal programs.
FINDING REFERENCE NUMBER 2023-031 (See Finding Reference Number 2023-003) FEDERAL PROGRAM (ALN – 93.558) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 2021G996117; 2022G996117; 2023996117 (Federal Award Years: 2021 through 2023) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT ALLOWABLE COSTS/COSTS PRINCIPLES TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA Uniform Guidance at 2 CFR 200 Subpart E §200.403, Factor affecting allowability of costs, establishes that: “Except where otherwise authorized by statute, costs must meet the following criteria 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. For example, a cost must 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 requirements of any other federally-financed program in either the current or a prior period. See § 200.306(b). (g) Be adequately documented. See §§ 200.300 through 200.309.” STATEMENT OF CONDITION As part of our audit procedures over allowable costs requirements for TANF program, we selected seven (7) voucher payments related to activities of prevention. We found the following deficiencies: (a) When we obtained the vouchers related to payments of a contractor, we also requested the contract and the proposal, we noted that the Entity is a subrecipient and not a contractor. The transactions related to this contract were not identified as subrecipient in the SEFA (see Finding Reference Number 2023-058). We audited three (3) vouchers of this subrecipient, in each one, this Entity claimed reimbursement for utilities, supplies, and materials. When we observed documentation in the file, we noted that the entity administers other Federal awards; and no evidence was observed in the voucher that proper distribution of administrative costs is made among all Federal awards. In addition, the contract required a certification indicating absence of duplication of services provided, and it was not included in the invoice or supporting documentation. (b) In the other four (4) vouchers evaluated related to payments to contractors, reimbursement claimed by the contractors included the purchase of laptops and digital screens. No evidence was provided that indicated who is responsible for this equipment, where it is located, and how it is safeguarded. These suppliers were contracted to provide training and workshops for participants of TANF. In the invoices evaluated we noted that ADSEF is paying for all costs of the entity, including supplies, maintenance of vehicles, mileage for some personnel, telephone charges, internet, and other utilities. In the final draft of the SEFA submitted for audit procedures, ADSEF reported the amount of $2,411,184, which included all transactions related to preventive services. QUESTIONED COSTS None. PERSPECTIVE INFORMATION This is a systemic deficiency. Total transactions related to prevention services were one-hundred seven (107), amounting to $2,411,184. ADSEF does not have internal guidance and procedures establishing how transactions with sub-recipients will be handled and how they are accounted for. Furthermore, there are no internal controls documenting the evaluation of the operational costs of suppliers contracted to provide a service, and their operational expenses must be covered by them and not claimed directly from the program. STATEMENT OF CAUSE ADSEF does not have a work plan and internal control guidance that clearly defines permissible activities and describes the activities that will be carried out to meet program requirements through the contracting of suppliers and sub-recipients. POSSIBLE ASSERTED EFFECT ADSEF may be incurring non-allowable costs by reimbursing expenses not properly stipulated in the allowable cost regulations for program administration. Furthermore, the expenses incurred by the sub-recipient are not identified in the database in a manner that allows them to be identified for the preparation of the SEFA. IDENTIFICATION OF REPEAT FINDING No reported as prior audit finding. RECOMMENDATIONS We recommend management to establish internal control processes consistent with the requirements of 2 CFR 200. In addition, design and implement internal control processes to meet the requirements of subrecipient monitoring and procurement standards.
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. § 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 non- Federal entity. (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) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
Department of Health and Human Services FFLA #93.087, 90CU0090, 9/30/2020 – 9/29/2023; 90CU0095, 9/30/2018 – 9/29/2024 Enhance Safety of Children Affected by Substance Abuse Matching Significant Deficiency in Internal Control over Compliance 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 conditions of the federal award. In addition, 2 CFR 200.306 establishes that matching funds be verifiable from the non-federal entity’s records and are allowable under Subpart E – Cost Principles and 2 CFR 200.403(g) establishes that costs be adequately documented. Condition: In our sample of expenditures selected for testing, we noted the following items: a) The number of hours an employee worked per the approved timesheet vs. the hours claimed in the match claim workbook resulted in a clerical error. (1 instance) b) Per review of the supporting timesheet and paystub, an employee had mobile crisis pay which was not accurately reduced in the calculation for match in the match claim workbook (2 instances). Cause: The secondary review of match claim workbook did not identify the clerical errors. Effect: The Center’s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Center could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. The program was underallocated. Context: A total non-statistical sample of 25 match transactions were tested which accounted for $97,208 out of $488,366 of federal match direct program expenditures. Repeat Finding from Prior Year: No. Recommendation: We recommend management review the procedures and control processes involving the match claim workbook to ensure compliance with the federal grant. Views of Responsible Officials: Management is in agreement.