Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Reference Number:2022-016Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6 NU62PS924524-01-04 (2018), 18NU62PS924524 (2019), 5 NU62PS924524-03-00 (2020), 6 NU62PS924524-03-02 (2020)Compliance Requirement:Allowable Costs/Cost PrinciplesType of Finding:Material Weakness in Internal Control Over Compliance, Material NoncomplianceCriteria or specific requirement: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 and be allocable under these principles.(b) Conform to any limitations or exclusions outlined in these principles or the Federal award regarding types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to 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 following 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.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:The Department of Health (Department) was unable to provide supporting documentation for disbursement transactions charged to the program.Context:The Department was unable to provide supporting documentation for 17 of 60 disbursement transactions selected for testing. Auditors were not able to verify whether the expenditures were allowable per program requirements nor that they had been properly reviewed and approved.Questioned costs:Questioned costs of $59,466 represent the total of unsupported disbursements charged to the program.Cause:The Department?s procedures and controls were not sufficient to ensure that expenditures charged to the program were allowable and properly documented in accordance with federal requirements.Effect:Unallowable and unapproved costs may have been charged to the program.Recommendation:We recommend that the Department review its current procedures and controls to ensure that all expenditures charged to the program are supported by documentation, are properly reviewed and approved, and that documentation is readily available for audit. The Department should not seek federal reimbursement unless it can substantiate that disbursements are allowable and properly approved.Views of responsible officials:Due to the COVID-19 pandemic and the resulting remote teleworking period that was in place at the Department of Health (DOH) during the FY 2022 audit period, some payment documents were approved remotely without physical documents in hand, and the payment documentation for the 17 of 60 ELC general disbursement transactions examined were either not delivered to the office to be filed yet or have been delivered but misfiled. DOH Central Accounts Payable will review and improve its current procedures and controls to ensure all physical payment documents are reviewed, approved, and filed correctly under the current hybrid remote working conditions in place now since the pandemic ceased.
Reference Number:2022-016Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6 NU62PS924524-01-04 (2018), 18NU62PS924524 (2019), 5 NU62PS924524-03-00 (2020), 6 NU62PS924524-03-02 (2020)Compliance Requirement:Allowable Costs/Cost PrinciplesType of Finding:Material Weakness in Internal Control Over Compliance, Material NoncomplianceCriteria or specific requirement: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 and be allocable under these principles.(b) Conform to any limitations or exclusions outlined in these principles or the Federal award regarding types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to 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 following 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.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:The Department of Health (Department) was unable to provide supporting documentation for disbursement transactions charged to the program.Context:The Department was unable to provide supporting documentation for 17 of 60 disbursement transactions selected for testing. Auditors were not able to verify whether the expenditures were allowable per program requirements nor that they had been properly reviewed and approved.Questioned costs:Questioned costs of $59,466 represent the total of unsupported disbursements charged to the program.Cause:The Department?s procedures and controls were not sufficient to ensure that expenditures charged to the program were allowable and properly documented in accordance with federal requirements.Effect:Unallowable and unapproved costs may have been charged to the program.Recommendation:We recommend that the Department review its current procedures and controls to ensure that all expenditures charged to the program are supported by documentation, are properly reviewed and approved, and that documentation is readily available for audit. The Department should not seek federal reimbursement unless it can substantiate that disbursements are allowable and properly approved.Views of responsible officials:Due to the COVID-19 pandemic and the resulting remote teleworking period that was in place at the Department of Health (DOH) during the FY 2022 audit period, some payment documents were approved remotely without physical documents in hand, and the payment documentation for the 17 of 60 ELC general disbursement transactions examined were either not delivered to the office to be filed yet or have been delivered but misfiled. DOH Central Accounts Payable will review and improve its current procedures and controls to ensure all physical payment documents are reviewed, approved, and filed correctly under the current hybrid remote working conditions in place now since the pandemic ceased.
Finding 2022-001- Activities Allowed or Unallowed, Allowable Costs- Significant Deficiency Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: Department of the Treasury ? Pass-through from the State of California Award No.: WWID 4SSO10370 & CA 1910156 Award Year: Fiscal year 2021-2022 Category of Finding: Activities Allowed or Unallowed, Allowable Costs Criteria or Specific Requirement: Allowable Costs - 2 CFR Part 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). Per California Water and Wastewater Arrearage Payment Program Guidelines amended on January 19, 2022, providers that accrued residential and commercial customer arrearages during the COVID-19 pandemic bill relief period (March 4, 2020 through June 15, 2021) are eligible for the water and wastewater arrearages funding. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The City did not have an effective system of internal control in place to ensure the correct COVID-19 pandemic relief period was applied to identify eligible customers to have their bills paid with federal grant funds. Context: Crowe selected a total of 60 payment transactions, consisting of 30 water bills and 30 wastewater bills that were included in the arrearage program. We noted that one of the water bills selected for testing had a service date from June 28, 2021 in the amount $77.88. Upon further discussion with City management we noted the City applied the incorrect pandemic relief period to the program. Instead of a date of June 15, 2021, the City was using June 30, 2021 as the cutoff date. Management subsequently reviewed the entire population of the bills and quantified that there were 93 water bills with aggregate amount of $20,199 and 81 wastewater bills with aggregate amount of $15,331 ineligible for the funding. Cause: The City applied the incorrect pandemic relief period to the program. Instead of a date of June 15, 2021, the City was using June 30, 2021 as the cutoff date. Effect or Potential Effect: There were 93 water bills with totaled amount of $20,199 and 81 wastewater bills with totaled amount of $15,331 ineligible for the funding. Questioned Costs: $35,530 Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that the City implement internal controls to review the eligibility period for water and wastewater arrearages funding to identify the correct eligible applicants prior to disbursement. Views of Responsible Officials: Payments applied to the 93 water bills and 81 wastewater bills will be reversed on the customer?s accounts. A notice will be issued to customers via mail and email (where possible) of the discrepancy. The funds will be returned to the State pursuant to their outlined procedures. Moving forward, the City will ensure that there is a multi-layered approval process to review the eligibility period of any State funding to identify the correct eligible applicants prior to disbursement. For future funding related to water and/or waster bills, the list of eligible applicants will be compiled by an analyst within the department and will be reviewed by the Revenue Services Manager and Assistant Finance Director prior to disbursement.
2022-003 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: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 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 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: No Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2022-003 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: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 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 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: No Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2022-003 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: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 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 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: No Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2022-003 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: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 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 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: No Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2022-003 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: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 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 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: No Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2022-003 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: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 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 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: No Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2022-003 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: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 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 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: No Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2022-003 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: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 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 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: No Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
2022-003 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: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 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 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: No Recommendation: We recommend the Association establish policies and procedures to ensure that matching contributions are tracked and properly funded.
Finding No. 2022–007 – Activities Allowed or Unallowed, Eligible Uses – FEMA Federal Program ALN 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Program Name of Federal Agency U.S. Department of Homeland Security Pass-through Entity Central Office of Recovery, Reconstruction and Resiliency (COR3) Category Non-compliance / Material weakness in internal controls over compliance Compliance Requirement Activities Allowed or Unallowed, Eligible Uses Criteria As per 2 CFR section 200.403(g), except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: • Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. • Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. • Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. • 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. • 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. • 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). • Be adequately documented. See also §§ 200.300 through 200.309 of this part. • 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 the closeout procedures, the Central Office of Recovery, Reconstruction and Resiliency (COR3) office performed a 100% validation on Rental Equipment, supporting documents including contract summary record, invoices, and proofs of payment. As a result of the validation, the total validated amount is $979,259 from an original amount of $1,260,775 submitted by the Corporation for reimbursement. Cause The Corporation claimed ineligible days in rent of equipment, certain invoices were claimed at a greater monthly rate, various expenses were claimed using retroactive memorandum of necessity as well as other transactions were found to not be eligible due to non-compliance with Puerto Rican Contract law, failing to comply with the proper documentation as required by the regulation. Effect The Corporation has to return a total amount of $281,516 due to the unallowed activities that were claimed to the fund. Questioned Cost The known questioned cost was calculated by the amount deemed to be unallowable activity of $281,516. Context • An amount of $26,127 was deducted from invoice #16307820 due to the dates 9/3/18 to 9/15/18 that falls in the 100% cost share." This amount was claimed under a different PW. • For chillers, invoice 16307877 was partially covered (15 days eligible), invoice 16308069 was partially covered (12 days eligible), and invoice 16308131 was partially covered (14 days eligible) due to the service order execution date. • For generators, invoices 16307884, 16307953, 16308033, 16308092, 16308146, 16308207, 16308270, 16308318, 16308357, 16308402, 16308449 and 16308476 were partially covered due to the maximum contract amount. • For generators, invoices 16307820, 16308622, 16308665, and 16308706 were found to not be eligible for reimbursement due to both retroactive execution as well as non-compliance with Puerto Rican Contract law. Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Recommendation The management of the Corporation should reinforce its procedures of the administration of federal funds to ensure the compliance with the requirements with each program. Also, the Corporation should establish communication with the Central Office of Recovery, Reconstruction and Resiliency in order to obtain instructions for the correction of the non-compliance event and the related questioned cost. Views of responsible officials and planned corrective actions The Corporation’s management and responsible officers agree with this finding. Please refer to the corrective action plan section for the Corporation’s response on pages 89 to 98.
Finding 2022-004: Matching Agency and Award: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Assistance Listing Number: 10.561. Condition: Certain salary amounts relating to the federal grant which were included in the matching amounts for the grant were charged through to another federal grant. Criteria: 2 CFR Section 200.306 states that the basic criteria for acceptable matching requires that matching amounts are not paid by the federal government under another award, except where the federal statute authorizing a program specifically provides that federal funds made available for such programs can be applied to matching or cost sharing requirements of other federal programs. Cause: The calculation of matching amounts on the SNAP grant in the reporting provided was correct, however, certain amounts related to certain employees working for the Bistro which had been included in the matching calculation were charged through to another federal grant due to an oversight. Context and Effect: Matching amounts related to 3 months during the year for 2 employees of the Bistro should not have been charged through to the other federal grant and were, although the total amount was under the reportable threshold for Questioned costs. Questioned Costs: None Recommendations: The Light House should ensure that all individuals who are responsible for reporting and charging time to federal grants whether under the Light House or the Bistro are aware of related compliance requirements.
REFERENCE: 2022-101 CFDA NUMBER 84.425D ? COVID 19 ? EDUCATION STABILIZATION FUND CFDA NUMBER 84.425U ? COVID 19 ? EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION ? 2021 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S425D210038 & S425U210038 QUESTIONED COSTS N/A CONDITION The following errors were noted during testing of allowable costs, activities and procurement: ? For 1 of 3 vendors tested for procurement, only 1 quote was available for review. ? Vendors were not evaluated for suspension or debarment prior to purchases being made. ? For 3 of 12 disbursements tested, although the purchases are allowable under the grants, the purchases were not included in the grant budgets submitted to the Arizona Department of Education. Amended budgets were submitted on August 31, 2022. CRITERIA In accordance with 2 CFR 200.320 Methods of Procurement to be Followed, The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. In accordance with 2 CFR 200.214 Suspension and debarment, Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. In accordance with 2CFR 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). In accordance with OMB Compliance Supplement, Part 6 ? Internal Control, non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. EFFECT Program requirements were not complied with. The School may not have received the best pricing for goods or services. CAUSE Procurement procedures were not established to ensure compliance with federal regulations, including retention of quotes from an adequate number of vendors and suspension and debarment requirements. Additionally, internal controls were not designed appropriately to ensure that expenditures charged to the grant were periodically compared to the grant budgets to determine if budget amendments should be submitted. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to monitor when federal expenditures require procurement, that all documentation is obtained and retained and vendors are reviewed for suspension and debarment. Additionally, internal controls should be modified to periodically compare actual expenditures under the grant with submitted budgets. This will help ensure that program requirements are complied with, the School only uses vendors that have not been suspended or debarred and budget amendments are submitted timely. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
REFERENCE: 2022-101 CFDA NUMBER 84.425D ? COVID 19 ? EDUCATION STABILIZATION FUND CFDA NUMBER 84.425U ? COVID 19 ? EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION ? 2021 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S425D210038 & S425U210038 QUESTIONED COSTS N/A CONDITION The following errors were noted during testing of allowable costs, activities and procurement: ? For 1 of 3 vendors tested for procurement, only 1 quote was available for review. ? Vendors were not evaluated for suspension or debarment prior to purchases being made. ? For 3 of 12 disbursements tested, although the purchases are allowable under the grants, the purchases were not included in the grant budgets submitted to the Arizona Department of Education. Amended budgets were submitted on August 31, 2022. CRITERIA In accordance with 2 CFR 200.320 Methods of Procurement to be Followed, The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. In accordance with 2 CFR 200.214 Suspension and debarment, Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. In accordance with 2CFR 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). In accordance with OMB Compliance Supplement, Part 6 ? Internal Control, non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. EFFECT Program requirements were not complied with. The School may not have received the best pricing for goods or services. CAUSE Procurement procedures were not established to ensure compliance with federal regulations, including retention of quotes from an adequate number of vendors and suspension and debarment requirements. Additionally, internal controls were not designed appropriately to ensure that expenditures charged to the grant were periodically compared to the grant budgets to determine if budget amendments should be submitted. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to monitor when federal expenditures require procurement, that all documentation is obtained and retained and vendors are reviewed for suspension and debarment. Additionally, internal controls should be modified to periodically compare actual expenditures under the grant with submitted budgets. This will help ensure that program requirements are complied with, the School only uses vendors that have not been suspended or debarred and budget amendments are submitted timely. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Program Information: AL #: 93.243 U.S. Department of Health and Human Services SAMHSA Youth Programs ? Youth Tree, Youth Suicide Prevention, Youth Connections Project Award Numbers: 6H79TI081193-01, 1H79SM082124-01, 1H79SM081540-01 Award Periods: 9/30/18-9/29/23, 6/30/19-6/29/24, 9/30/18-9/29/23 Criteria: The requirements for matching are contained in 2 CFR section 200.306, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. The requirements for level of effort and earmarking are contained in program legislation, Federal awarding agency regulations, and the terms and conditions of the award. Per review of the award documents for Youth Tree, Youth Connections, and Youth Suicide Prevention, key staff have identified the following level of effort requirements: Youth Tree - ? Project Director @ 12.5% ? Youth Services/Recovery Support Coordinator @ 100% ? Lead Evaluator @ contractor level of efforts ? Family Coordinator @ 100% Youth Suicide Prevention- ? Project Director @ 100% Youth Connections Project- ? Project Director @ 100% Any changes in the key staff including level of effort, involving separation from the projects for 3 or more months, or a 25% reduction in time dedicated to the projects requires prior approval from SAMHSA. Condition/Context: During the audit, we noted that for the Youth Tree Program, a different individual was the project director during 2022; this key staff change was not previously approved by the funding agency as required in the grant agreement. Approval was received by the funding agency on May 25, 2022. During the audit, we noted that for the Youth Connections Project a different individual was the project director during 2022 and at a different level of effort than noted in the award; this key staff change was not previously approved by the funding agency as required in the grant agreement. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: There were ineffective controls in place during the period to ensure level of effort changes for key staff were approved prior to the change taking place. Effect: By not obtaining prior approval from the funding agency of key staff changes, the Clinic may have someone in the key role not approved for the position. Questioned Costs: Not applicable. Repeat Finding: Yes, 2021-002. Recommendation: We recommend that the Clinic work to obtain prior approval for any key staff changes for the program, and ensure that written approval is received from the funding agency before implementing staffing changes. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: AL #: 93.243 U.S. Department of Health and Human Services SAMHSA Youth Programs ? Youth Tree, Youth Suicide Prevention, Youth Connections Project Award Numbers: 6H79TI081193-01, 1H79SM082124-01, 1H79SM081540-01 Award Periods: 9/30/18-9/29/23, 6/30/19-6/29/24, 9/30/18-9/29/23 Criteria: The requirements for matching are contained in 2 CFR section 200.306, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. The requirements for level of effort and earmarking are contained in program legislation, Federal awarding agency regulations, and the terms and conditions of the award. Per review of the award documents for Youth Tree, Youth Connections, and Youth Suicide Prevention, key staff have identified the following level of effort requirements: Youth Tree - ? Project Director @ 12.5% ? Youth Services/Recovery Support Coordinator @ 100% ? Lead Evaluator @ contractor level of efforts ? Family Coordinator @ 100% Youth Suicide Prevention- ? Project Director @ 100% Youth Connections Project- ? Project Director @ 100% Any changes in the key staff including level of effort, involving separation from the projects for 3 or more months, or a 25% reduction in time dedicated to the projects requires prior approval from SAMHSA. Condition/Context: During the audit, we noted that for the Youth Tree Program, a different individual was the project director during 2022; this key staff change was not previously approved by the funding agency as required in the grant agreement. Approval was received by the funding agency on May 25, 2022. During the audit, we noted that for the Youth Connections Project a different individual was the project director during 2022 and at a different level of effort than noted in the award; this key staff change was not previously approved by the funding agency as required in the grant agreement. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: There were ineffective controls in place during the period to ensure level of effort changes for key staff were approved prior to the change taking place. Effect: By not obtaining prior approval from the funding agency of key staff changes, the Clinic may have someone in the key role not approved for the position. Questioned Costs: Not applicable. Repeat Finding: Yes, 2021-002. Recommendation: We recommend that the Clinic work to obtain prior approval for any key staff changes for the program, and ensure that written approval is received from the funding agency before implementing staffing changes. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: AL #: 93.243 U.S. Department of Health and Human Services SAMHSA Youth Programs ? Youth Tree, Youth Suicide Prevention, Youth Connections Project Award Numbers: 6H79TI081193-01, 1H79SM082124-01, 1H79SM081540-01 Award Periods: 9/30/18-9/29/23, 6/30/19-6/29/24, 9/30/18-9/29/23 Criteria: The requirements for matching are contained in 2 CFR section 200.306, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. The requirements for level of effort and earmarking are contained in program legislation, Federal awarding agency regulations, and the terms and conditions of the award. Per review of the award documents for Youth Tree, Youth Connections, and Youth Suicide Prevention, key staff have identified the following level of effort requirements: Youth Tree - ? Project Director @ 12.5% ? Youth Services/Recovery Support Coordinator @ 100% ? Lead Evaluator @ contractor level of efforts ? Family Coordinator @ 100% Youth Suicide Prevention- ? Project Director @ 100% Youth Connections Project- ? Project Director @ 100% Any changes in the key staff including level of effort, involving separation from the projects for 3 or more months, or a 25% reduction in time dedicated to the projects requires prior approval from SAMHSA. Condition/Context: During the audit, we noted that for the Youth Tree Program, a different individual was the project director during 2022; this key staff change was not previously approved by the funding agency as required in the grant agreement. Approval was received by the funding agency on May 25, 2022. During the audit, we noted that for the Youth Connections Project a different individual was the project director during 2022 and at a different level of effort than noted in the award; this key staff change was not previously approved by the funding agency as required in the grant agreement. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: There were ineffective controls in place during the period to ensure level of effort changes for key staff were approved prior to the change taking place. Effect: By not obtaining prior approval from the funding agency of key staff changes, the Clinic may have someone in the key role not approved for the position. Questioned Costs: Not applicable. Repeat Finding: Yes, 2021-002. Recommendation: We recommend that the Clinic work to obtain prior approval for any key staff changes for the program, and ensure that written approval is received from the funding agency before implementing staffing changes. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
U. S. Department of Housing and Urban Development (Pass-through from Virginia Office of Community Planning and Development) Assistance Listing #14.267 Finding 2022-003 Known Questioned Costs for a Federal Program Not Audited as a Major Program Criteria: In accordance with 2 CFR 200.516(a)(4) known questioned costs that are greater than $25,000 for a program that is not audited as a major program must be reported as an audit finding in the federal awards section of the schedule of findings and questioned costs. In September 2022, the U. S. Department of Housing and Urban Development/Virginia Office of Community Planning and Development, identified $1,463 of unallowed expenditures and a deficit of $27,464 in the required cash match under the Continuum of Care program for the year ended December 31, 2021, as a result of monitoring. Condition: The Federal awarding agency has determined, in accordance with 24 CFR 578.51; 24 CFR 578.57, $1,463 of allowable HMIS expenses were not documented and that in accordance with 2 CFR 200.1; 2 CFR 200.103(a)(11); 2 CFR 200.306; 24 CFR 578.73 the grantee failed to match $27,464 on its Continuum of Care rapid rehousing project. Cause: The Federal awarding agency believes staff requesting reimbursement were not fully aware of what constitutes an allowable project expense and that grantee misinterpreted regulations concerning match for Federal grants. Effect: The Federal awarding agency asserts that grantee requested reimbursement for non-reimbursable expenses and did not contribute the required match to its Continuum of Care project. Recommendation: Grantee is required to repay $1,463 for unallowable HMIS and $27,464 for match deficit. Views of responsible official: NRCA has developed a corrective action plan. NRCA is in the process of resolving this matter with the Department of HUD and is currently seeking counsel to ensure this resolution is resolved in an acceptable and appropriate manner. Contact person: Krystal Thompson, Executive Director Corrective Action Plan: See Client's Corrective Action Plan.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe 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 allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate 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 otherfederally-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 isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.
Reference Number:2022-016Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6 NU62PS924524-01-04 (2018), 18NU62PS924524 (2019), 5 NU62PS924524-03-00 (2020), 6 NU62PS924524-03-02 (2020)Compliance Requirement:Allowable Costs/Cost PrinciplesType of Finding:Material Weakness in Internal Control Over Compliance, Material NoncomplianceCriteria or specific requirement: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 and be allocable under these principles.(b) Conform to any limitations or exclusions outlined in these principles or the Federal award regarding types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to 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 following 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.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:The Department of Health (Department) was unable to provide supporting documentation for disbursement transactions charged to the program.Context:The Department was unable to provide supporting documentation for 17 of 60 disbursement transactions selected for testing. Auditors were not able to verify whether the expenditures were allowable per program requirements nor that they had been properly reviewed and approved.Questioned costs:Questioned costs of $59,466 represent the total of unsupported disbursements charged to the program.Cause:The Department?s procedures and controls were not sufficient to ensure that expenditures charged to the program were allowable and properly documented in accordance with federal requirements.Effect:Unallowable and unapproved costs may have been charged to the program.Recommendation:We recommend that the Department review its current procedures and controls to ensure that all expenditures charged to the program are supported by documentation, are properly reviewed and approved, and that documentation is readily available for audit. The Department should not seek federal reimbursement unless it can substantiate that disbursements are allowable and properly approved.Views of responsible officials:Due to the COVID-19 pandemic and the resulting remote teleworking period that was in place at the Department of Health (DOH) during the FY 2022 audit period, some payment documents were approved remotely without physical documents in hand, and the payment documentation for the 17 of 60 ELC general disbursement transactions examined were either not delivered to the office to be filed yet or have been delivered but misfiled. DOH Central Accounts Payable will review and improve its current procedures and controls to ensure all physical payment documents are reviewed, approved, and filed correctly under the current hybrid remote working conditions in place now since the pandemic ceased.
Reference Number:2022-016Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6 NU62PS924524-01-04 (2018), 18NU62PS924524 (2019), 5 NU62PS924524-03-00 (2020), 6 NU62PS924524-03-02 (2020)Compliance Requirement:Allowable Costs/Cost PrinciplesType of Finding:Material Weakness in Internal Control Over Compliance, Material NoncomplianceCriteria or specific requirement: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 and be allocable under these principles.(b) Conform to any limitations or exclusions outlined in these principles or the Federal award regarding types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to 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 following 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.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:The Department of Health (Department) was unable to provide supporting documentation for disbursement transactions charged to the program.Context:The Department was unable to provide supporting documentation for 17 of 60 disbursement transactions selected for testing. Auditors were not able to verify whether the expenditures were allowable per program requirements nor that they had been properly reviewed and approved.Questioned costs:Questioned costs of $59,466 represent the total of unsupported disbursements charged to the program.Cause:The Department?s procedures and controls were not sufficient to ensure that expenditures charged to the program were allowable and properly documented in accordance with federal requirements.Effect:Unallowable and unapproved costs may have been charged to the program.Recommendation:We recommend that the Department review its current procedures and controls to ensure that all expenditures charged to the program are supported by documentation, are properly reviewed and approved, and that documentation is readily available for audit. The Department should not seek federal reimbursement unless it can substantiate that disbursements are allowable and properly approved.Views of responsible officials:Due to the COVID-19 pandemic and the resulting remote teleworking period that was in place at the Department of Health (DOH) during the FY 2022 audit period, some payment documents were approved remotely without physical documents in hand, and the payment documentation for the 17 of 60 ELC general disbursement transactions examined were either not delivered to the office to be filed yet or have been delivered but misfiled. DOH Central Accounts Payable will review and improve its current procedures and controls to ensure all physical payment documents are reviewed, approved, and filed correctly under the current hybrid remote working conditions in place now since the pandemic ceased.
Finding 2022-001- Activities Allowed or Unallowed, Allowable Costs- Significant Deficiency Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: Department of the Treasury ? Pass-through from the State of California Award No.: WWID 4SSO10370 & CA 1910156 Award Year: Fiscal year 2021-2022 Category of Finding: Activities Allowed or Unallowed, Allowable Costs Criteria or Specific Requirement: Allowable Costs - 2 CFR Part 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). Per California Water and Wastewater Arrearage Payment Program Guidelines amended on January 19, 2022, providers that accrued residential and commercial customer arrearages during the COVID-19 pandemic bill relief period (March 4, 2020 through June 15, 2021) are eligible for the water and wastewater arrearages funding. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The City did not have an effective system of internal control in place to ensure the correct COVID-19 pandemic relief period was applied to identify eligible customers to have their bills paid with federal grant funds. Context: Crowe selected a total of 60 payment transactions, consisting of 30 water bills and 30 wastewater bills that were included in the arrearage program. We noted that one of the water bills selected for testing had a service date from June 28, 2021 in the amount $77.88. Upon further discussion with City management we noted the City applied the incorrect pandemic relief period to the program. Instead of a date of June 15, 2021, the City was using June 30, 2021 as the cutoff date. Management subsequently reviewed the entire population of the bills and quantified that there were 93 water bills with aggregate amount of $20,199 and 81 wastewater bills with aggregate amount of $15,331 ineligible for the funding. Cause: The City applied the incorrect pandemic relief period to the program. Instead of a date of June 15, 2021, the City was using June 30, 2021 as the cutoff date. Effect or Potential Effect: There were 93 water bills with totaled amount of $20,199 and 81 wastewater bills with totaled amount of $15,331 ineligible for the funding. Questioned Costs: $35,530 Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that the City implement internal controls to review the eligibility period for water and wastewater arrearages funding to identify the correct eligible applicants prior to disbursement. Views of Responsible Officials: Payments applied to the 93 water bills and 81 wastewater bills will be reversed on the customer?s accounts. A notice will be issued to customers via mail and email (where possible) of the discrepancy. The funds will be returned to the State pursuant to their outlined procedures. Moving forward, the City will ensure that there is a multi-layered approval process to review the eligibility period of any State funding to identify the correct eligible applicants prior to disbursement. For future funding related to water and/or waster bills, the list of eligible applicants will be compiled by an analyst within the department and will be reviewed by the Revenue Services Manager and Assistant Finance Director prior to disbursement.
Internal Controls and Compliance over Allowable Costs/Cost Principles and Period of Performance Identification of Federal Program: Coronavirus Relief Fund – Assistance Listing No. 21.019 Criteria: 2 CFR Part 200 requires that the City and its Contractor, a non-federal entity 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). The provisions of the Coronavirus Relief Fund (CRF), as stipulated by the U.S. Treasury and subject to restrictions outlines in the guidance set forth in Section 601(d) of the Social Security Act, as added by Section 5001 of the “CARES” Act, restrict use of the funding for allowable costs and activities. Pursuant to Code of Federal Regulation (CFR) 200.403, 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 CFR 200.306(b). (g) Be adequately documented. See also CFR 200.300 – 200.309. (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 CFR 200.308(e)(3). Cause/Condition: During our testing of the Coronavirus Relief Fund program, we noted that the City, through its contracted employee services, failed to establish and adhere to an effective internal control structure that would facilitate its use of Coronavirus Relief Funding, comply with regulations and terms of the federal award and take prompt action when instances of noncompliance were identified. As a result, the City was not in compliance with certain provisions of the grant. Results of testing also indicated unallowable and questioned use of the grant funding. The results of testwork performed and correspondence with City management noted the following: • No backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed CRF funding was available or maintained by City personnel. Online applications were submitted, but there was inadequate documentation and an absence of evidence of a functioning internal control structure for the disbursement of funding used for the City’s Small Business Relief Program. • Approximately $4.25 million use of the funding was disbursed to grantees as part of the City’s Small Business Relief Program. As there was no backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed CRF funding and because there were individuals responsible for selecting grantees that were potentially involved in a fraudulent scheme, all amounts tested within our sample of eighty-one (81) were determined to be questioned costs, which amounted to $3,070,900. Based on our sample of eighty-one (81) grantees tested, $196,250 was confirmed by the grantees as amounts requested and/or directed by former City representatives to be remitted to outside entities for marketing services. Such services were potentially a part of a fraudulent scheme under direction by former City Officials and later prosecuted. Such questioned amounts would not tie into delivery or performance of allowable services. • During our testing of CRF expenditures, we sampled twenty-one (21) disbursements made for public health costs incurred as a response to the pandemic, which are an allowable use of funding. We noted one (1) payment made in the amount of $3,500 for which no copy or check or disbursement was able to be provided. In addition, we noted that the disbursement for $3,500 as well as an additional disbursement of $12,000 were both paid to a City vendor that employed two former contracted City staff. Both amounts totaling $15,500 were determined to be questioned costs. • During our testing of CRF expenditures, we sampled nine (9) payments made to contractors, organizations and special services procured with CRF funding. We noted one (1) payment made in the amount of $50,000 for which no copy or check or disbursement was able to be provided. In addition, such contractors, organizations, and special services procured with the funding were noted to have bypassed City procurement protocol and eight (8) of the payments, totaling $163,500, were for services outside of the initial period of performance of the grant. As a result, the total tested disbursements of $213,500 were determined to be questioned costs. Effects or Potential Effects: Noncompliance with CFR related to allowable costs and period of performance results in an increased risk that charges to the grant do not represent actual costs incurred. Internal control deficiencies surrounding the grant result in an increased risk that noncompliance may not be detected or corrected timely. Questioned Costs: Known questioned costs amounted to $3,299,900. Likely questioned costs amounted to $5,896,456. Recommendation: We recommend that incoming City management strengthen its internal control structure surrounding its designation, use and disbursement of grants as well as implement and adhere to policies and procedures for the retention and safeguarding of original source documents to properly substantiate charges made to grants. Auditee’s Response: DeKalb County was given $125 million directly from the federal government. Of that amount, and through an intergovernmental agreement dated August 10, 2020, $32.6 million was distributed to the County’s municipalities on a per capita basis. The City of Stonecrest received $6,227,098. The City was to administer and distribute the funds in accordance with the federal program requirements to combat the public health emergency and resulting economic impact related to the COVID-19 pandemic. The City was also charged with maintaining through and accurate records regarding expenditure of the funds. Following the execution of the agreement with DeKalb County, the City Council adopted a resolution on September 28, 2020 calling for the Stonecrest CARES Act Funding plan. The City Council assigned contractor staff to set up protocols to manage the program. The City Manager, who was not on staff at the time, or designee was authorized to employ an administrator for the Small Business Support Program, to develop an education component and to create a CARES Act Relief Fund Committee to vet and select a program administrator. The Stonecrest COVID CARES Act Relief Fund was created as the umbrella group that would have oversite over the programs. The Committee was later renamed the Aaron Matthew Allen COVID Small Business Relief/Stonecrest Cares Committee to honor a local resident. The Committee was organized by contractor staff and included two members of City Council, several Contractor staff and consultants who were later paid to assist with the program. The Committee met four times between November 4, 2020 and December 22, 2020, however, there is no evidence that the program management plan, as outlined in the September 28, 2020 resolution was executed in accordance with the resolution. Contractor staff reported to other Committee members on activities and events related to the use of CARES Act funds, and the other committee members had no functional roles in CARES Act fund program. The updates included the naming of consultants involved in the program, but did not disclose that consultant contracts had been executed by contractor staff using the emergency procurement section of the City’s Purchasing Policy. There appears to be no factual basis or authority for use of emergency procurement procedures or execution of contracts by the contractor staff. Significantly, on October 30, 2020, a contract was signed by a City contractor staff with a recently organized not-for-profit organization to prepare disbursements to organizations using CARES Act funds based on notifications by the City Contractor staff. There were duties related to records and accounting but no other performance requirements. Other contracts were executed by contractor City staff who had no authority to enter contracts on the City’s behalf. That process should have included the City Purchasing agent, also a contractor staff, City Attorney and City Council reviews and approvals. The City was successful in obtaining records from the program contractors primarily related to bank statements, program grant application documents, check copies, front and back, however no backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed funds was available or maintained by the City. The contractor was in full control of the operation of the CARES Act program. The City contends that established internal control procedures were not followed by employees assigned by the private government services contractor retained to provide management and operations services in a manner sufficient to prevent, detect, and/or correct various issues related to the City’s CARES Program. The City concedes that City employed staff did not timely submit reports to DeKalb County pursuant to terms of the Intergovernmental Agreement.Like the response by Mayor and City Council with the purchasing card findings, the City Attorney was engaged to investigate the CARES Act program organization and operation. Pursuant to those findings, federal and local law enforcement agencies were notified, and criminal charges were prosecuted and convictions secured. Based on those prosecution, the City received restitutions that will be reimbursed to DeKalb County. In addition, the City has made a claim as part of the January 31, 2023, filed Complaint for damages and other relief to be indemnified by the contractor for any claims by DeKalb County, including questioned unallowable costs, for reimbursement of Cares Act funds.
Internal Controls and Compliance over Allowable Costs/Cost Principles and Period of Performance Identification of Federal Program: Coronavirus Relief Fund – Assistance Listing No. 21.019 Criteria: 2 CFR Part 200 requires that the City and its Contractor, a non-federal entity 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). The provisions of the Coronavirus Relief Fund (CRF), as stipulated by the U.S. Treasury and subject to restrictions outlines in the guidance set forth in Section 601(d) of the Social Security Act, as added by Section 5001 of the “CARES” Act, restrict use of the funding for allowable costs and activities. Pursuant to Code of Federal Regulation (CFR) 200.403, 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 CFR 200.306(b). (g) Be adequately documented. See also CFR 200.300 – 200.309. (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 CFR 200.308(e)(3). Cause/Condition: During our testing of the Coronavirus Relief Fund program, we noted that the City, through its contracted employee services, failed to establish and adhere to an effective internal control structure that would facilitate its use of Coronavirus Relief Funding, comply with regulations and terms of the federal award and take prompt action when instances of noncompliance were identified. As a result, the City was not in compliance with certain provisions of the grant. Results of testing also indicated unallowable and questioned use of the grant funding. The results of testwork performed and correspondence with City management noted the following: • No backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed CRF funding was available or maintained by City personnel. Online applications were submitted, but there was inadequate documentation and an absence of evidence of a functioning internal control structure for the disbursement of funding used for the City’s Small Business Relief Program. • Approximately $4.25 million use of the funding was disbursed to grantees as part of the City’s Small Business Relief Program. As there was no backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed CRF funding and because there were individuals responsible for selecting grantees that were potentially involved in a fraudulent scheme, all amounts tested within our sample of eighty-one (81) were determined to be questioned costs, which amounted to $3,070,900. Based on our sample of eighty-one (81) grantees tested, $196,250 was confirmed by the grantees as amounts requested and/or directed by former City representatives to be remitted to outside entities for marketing services. Such services were potentially a part of a fraudulent scheme under direction by former City Officials and later prosecuted. Such questioned amounts would not tie into delivery or performance of allowable services. • During our testing of CRF expenditures, we sampled twenty-one (21) disbursements made for public health costs incurred as a response to the pandemic, which are an allowable use of funding. We noted one (1) payment made in the amount of $3,500 for which no copy or check or disbursement was able to be provided. In addition, we noted that the disbursement for $3,500 as well as an additional disbursement of $12,000 were both paid to a City vendor that employed two former contracted City staff. Both amounts totaling $15,500 were determined to be questioned costs. • During our testing of CRF expenditures, we sampled nine (9) payments made to contractors, organizations and special services procured with CRF funding. We noted one (1) payment made in the amount of $50,000 for which no copy or check or disbursement was able to be provided. In addition, such contractors, organizations, and special services procured with the funding were noted to have bypassed City procurement protocol and eight (8) of the payments, totaling $163,500, were for services outside of the initial period of performance of the grant. As a result, the total tested disbursements of $213,500 were determined to be questioned costs. Effects or Potential Effects: Noncompliance with CFR related to allowable costs and period of performance results in an increased risk that charges to the grant do not represent actual costs incurred. Internal control deficiencies surrounding the grant result in an increased risk that noncompliance may not be detected or corrected timely. Questioned Costs: Known questioned costs amounted to $3,299,900. Likely questioned costs amounted to $5,896,456. Recommendation: We recommend that incoming City management strengthen its internal control structure surrounding its designation, use and disbursement of grants as well as implement and adhere to policies and procedures for the retention and safeguarding of original source documents to properly substantiate charges made to grants. Auditee’s Response: DeKalb County was given $125 million directly from the federal government. Of that amount, and through an intergovernmental agreement dated August 10, 2020, $32.6 million was distributed to the County’s municipalities on a per capita basis. The City of Stonecrest received $6,227,098. The City was to administer and distribute the funds in accordance with the federal program requirements to combat the public health emergency and resulting economic impact related to the COVID-19 pandemic. The City was also charged with maintaining through and accurate records regarding expenditure of the funds. Following the execution of the agreement with DeKalb County, the City Council adopted a resolution on September 28, 2020 calling for the Stonecrest CARES Act Funding plan. The City Council assigned contractor staff to set up protocols to manage the program. The City Manager, who was not on staff at the time, or designee was authorized to employ an administrator for the Small Business Support Program, to develop an education component and to create a CARES Act Relief Fund Committee to vet and select a program administrator. The Stonecrest COVID CARES Act Relief Fund was created as the umbrella group that would have oversite over the programs. The Committee was later renamed the Aaron Matthew Allen COVID Small Business Relief/Stonecrest Cares Committee to honor a local resident. The Committee was organized by contractor staff and included two members of City Council, several Contractor staff and consultants who were later paid to assist with the program. The Committee met four times between November 4, 2020 and December 22, 2020, however, there is no evidence that the program management plan, as outlined in the September 28, 2020 resolution was executed in accordance with the resolution. Contractor staff reported to other Committee members on activities and events related to the use of CARES Act funds, and the other committee members had no functional roles in CARES Act fund program. The updates included the naming of consultants involved in the program, but did not disclose that consultant contracts had been executed by contractor staff using the emergency procurement section of the City’s Purchasing Policy. There appears to be no factual basis or authority for use of emergency procurement procedures or execution of contracts by the contractor staff. Significantly, on October 30, 2020, a contract was signed by a City contractor staff with a recently organized not-for-profit organization to prepare disbursements to organizations using CARES Act funds based on notifications by the City Contractor staff. There were duties related to records and accounting but no other performance requirements. Other contracts were executed by contractor City staff who had no authority to enter contracts on the City’s behalf. That process should have included the City Purchasing agent, also a contractor staff, City Attorney and City Council reviews and approvals. The City was successful in obtaining records from the program contractors primarily related to bank statements, program grant application documents, check copies, front and back, however no backup or supporting documentation for the evaluation, criteria, and selection of the grantees to be disbursed funds was available or maintained by the City. The contractor was in full control of the operation of the CARES Act program. The City contends that established internal control procedures were not followed by employees assigned by the private government services contractor retained to provide management and operations services in a manner sufficient to prevent, detect, and/or correct various issues related to the City’s CARES Program. The City concedes that City employed staff did not timely submit reports to DeKalb County pursuant to terms of the Intergovernmental Agreement.Like the response by Mayor and City Council with the purchasing card findings, the City Attorney was engaged to investigate the CARES Act program organization and operation. Pursuant to those findings, federal and local law enforcement agencies were notified, and criminal charges were prosecuted and convictions secured. Based on those prosecution, the City received restitutions that will be reimbursed to DeKalb County. In addition, the City has made a claim as part of the January 31, 2023, filed Complaint for damages and other relief to be indemnified by the contractor for any claims by DeKalb County, including questioned unallowable costs, for reimbursement of Cares Act funds.
Criteria: The requirements for matching are contained in 2 CFR Section 200.306, This states that any matching costs meet certain criteria including that they be verifiable from the entity’s records. Per the terms and conditions of the award, it is understood and agreed that PAX must provide the minimum amount of cost sharing as stipulated in the budget approved by the Grants Officer. PAX must maintain written records to support all allowable costs which are claimed as being its contribution to cost participation. Condition: Per the terms of the award, PAX agreed to expend a share of the total program cost financed by PAX and/or 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. Citation: 2 CFR 200.306 Cause: PAX did not have an effective internal control system in place for monitoring that the cost sharing requirement was being met. Effect: The accounting team did not allocate the expenses related to the cost share in the books and records throughout the year. However, they provided schedules that detailed the expenses related to the cost share after year-end as part of the audit process. Questioned Costs: None. Context: This sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: Yes Recommendation: We recommend that an internal control system be established to monitor PAX’s share of the award costs. This system should include tracking these expenses in a separate cost center in the books and records and reconciling to the amount reported to the grantor as well as the budget. View of Responsible Officials: See Corrective Action Plan attached.
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: County of San Bernardino Community Development and Housing Federal Award Identification Number: ADEL-18-1-03K-0134 ADEL-19-CV-2-05Q/0190 Assistance Listing Number: 21.019 Assistance Listing Title: Coronavirus Relief Fund Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance County of San Bernardino Federal Award Identification Number: N/A CARES21-ALLC-ADE 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. Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued) Condition: Community Development Block Grants/Entitlement Grants During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved. Coronavirus Relief Fund During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved. 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 costs $96,145. Context: See condition above for the 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. (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).