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.
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-034 - Noncompliance and Weakness in Controls with Special Tests and Provisions RequirementsAward Years: 2018, 2022Award Numbers: P20GM121307, R56NS114272Compliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-069)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LSUHSC-S did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a non-statistical sample of 14 federal R&D Cluster awards, plus two additional awards based on materiality, for the fiscal year ending June 30, 2022, from a population of 54 awards with a total of 28 key personnel. We reviewed the quarterly Time and Effort Certification forms, as applicable, for each key personnel for each award selected.We noted two of 28 (7%) key personnel had documentation of actual effort on the Time and Effort Certification forms that did not agree to the effort reported to the federal grantor, and there was no evidence of prior approval from the federal grantor for a change in key personnel.Criteria:2 CFR 200.308(c) states that for non-construction federal awards, recipients must request prior approvals from federal awarding agencies for one or more of the following program or budget-related reasons: (i) change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval); (ii) change in a key person specified in the application or the federal award; (iii) the disengagement from the project for more than three months, or a 25% reduction in time devoted to the project, by the approved project director or principal investigator.Cause:During fiscal year 2022, LSUHSC-S was in the process of implementing its corrective action plan. This included review of some time and effort certifications as training was performed, development of an updated Personnel Change (PER-3) form that now includes percentage effort documentation, and defined responsibilities for reporting changes in level of effort and requesting grantor approval as needed.Effect:Failure to implement controls over key personnel requirements could result in noncompliance with Special Tests and Provisions requirements.Recommendation:Management should continue to provide training for time and effort certifications. Management should also utilize the time and effort certifications and updated PER-3 forms to monitor changes in effort for key personnel and verify that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-49).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-034 - Noncompliance and Weakness in Controls with Special Tests and Provisions RequirementsAward Years: 2018, 2022Award Numbers: P20GM121307, R56NS114272Compliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-069)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LSUHSC-S did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a non-statistical sample of 14 federal R&D Cluster awards, plus two additional awards based on materiality, for the fiscal year ending June 30, 2022, from a population of 54 awards with a total of 28 key personnel. We reviewed the quarterly Time and Effort Certification forms, as applicable, for each key personnel for each award selected.We noted two of 28 (7%) key personnel had documentation of actual effort on the Time and Effort Certification forms that did not agree to the effort reported to the federal grantor, and there was no evidence of prior approval from the federal grantor for a change in key personnel.Criteria:2 CFR 200.308(c) states that for non-construction federal awards, recipients must request prior approvals from federal awarding agencies for one or more of the following program or budget-related reasons: (i) change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval); (ii) change in a key person specified in the application or the federal award; (iii) the disengagement from the project for more than three months, or a 25% reduction in time devoted to the project, by the approved project director or principal investigator.Cause:During fiscal year 2022, LSUHSC-S was in the process of implementing its corrective action plan. This included review of some time and effort certifications as training was performed, development of an updated Personnel Change (PER-3) form that now includes percentage effort documentation, and defined responsibilities for reporting changes in level of effort and requesting grantor approval as needed.Effect:Failure to implement controls over key personnel requirements could result in noncompliance with Special Tests and Provisions requirements.Recommendation:Management should continue to provide training for time and effort certifications. Management should also utilize the time and effort certifications and updated PER-3 forms to monitor changes in effort for key personnel and verify that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-49).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
Reference Number:2022-021Prior Year Finding:NoFederal Agency:Department of Health and Human ServicesState Agency:Department of Children and FamiliesFederal Program:Social Services Block GrantAssistance Listing Number:93.667Award Number and Year:G-2200NJSOSR (10/1/2021 ? 3/30/2023)Compliance Requirement:Period of PerformanceType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance ? A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Social Services Block Grant funds must be expended by the state in the fiscal year allotted or in the succeeding fiscal year.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 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 Children and Families (Department) charged costs to the program that were incurred outside of the grant award?s period of performance.Context:Four of forty expenditure transactions selected for testing, totaling $842, were incurred prior to the award start date of October 1, 2021.Questioned costs:$842, the total of expenditures charged to the program that were incurred outside of the grant award?s period of performance.Cause:Accounting staff identified and charged program costs to the incorrect grant. The Department?s review process did not detect the errors nor take timely corrective action.Effect:The Department was not compliant with the grant?s period of performance which could result in the grantor?s disallowance of the costs.Recommendation:We recommend that the Department review and enhance its procedures and controls to ensure that expenditures charged to the program are incurred within the grant?s period of performance.Views of responsible officials:The Department of Children and Families (DCF) will review and enhance its procedures and controls to ensure that expenditures charged to the program are incurred within each grant award?s specified period of performance.Further, as the federal SSBG grant award cited has a period of performance that remains open through September 2023, DCF has adjusted the four transactions that were posted incorrectly to another available funding source and ensured that all transactions presently recorded are now in compliance and within the specified period of performance.
Reference Number:2022-024Prior Year Finding:NoFederal Agency:Social Security AdministrationState Agency:Department of Labor and Workforce DevelopmentFederal Program:Disability Insurance/SSI ClusterAssistance Listing Number:96.001Award Number and Year:04-2204NJD100 (10/1/2021 ? 3/30/2023), 04-2104NJD100 (10/1/2020 ? 3/30/2022), 04-2004NJD100 (10/1/2019 ? 3/30/2021)Compliance Requirement:Period of PerformanceType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance ? A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods.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 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 Labor and Workforce Development (Department) charged costs to the program that were incurred outside of the grant award?s period of performance.Context:Two of six expenditure transactions selected for testing, totaling $435, were incurred prior to the award start date of October 1, 2021.Questioned costs:$435, the total of expenditures charged to the program that were incurred outside of the grant?s period of performance.Cause:Accounting staff identified and charged program costs to the incorrect grant. The Program?s review process did not detect the errors nor take timely corrective action.Effect:The Department was not compliant with the grant?s period of performance which could result in the grantor?s disallowance of the costs.Recommendation:We recommend that the Department review its procedures to ensure that expenditures charged to the program are incurred within the grant?s period of performance.Views of responsible officials:The New Jersey Department of Labor and Workforce Development (DLWD) has a policy in place for processing tuition reimbursements that are performed by the Department?s Accounts Payable unit. The policy was reviewed by the Office of Finance & Accounting (F&A) and internal control procedures were enhanced to ensure that fiscal cutoff measures were appropriately addressed. Tuition reimbursement procedures include having the requests forwarded to the responsible Supervising Analyst in the Appropriations/Accounting unit for final review and approval to ensure the proper fiscal period is charged. The correcting transactions were completed during the Single Audit timeframe to remediate the findings by charging and reimbursing the proper fiscal year accounts. The DLWD will continue its efforts to ensure compliance and that all charges applied to Federal awards are within the specified period of performance going forward.
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.
Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,839 items totaling $1,243,944 • ALN No. 93.788 – 1,502 items totaling $2,285,983 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 51 items totaling $26,145, including projected errors over the total population totaling $348,063 • ALN No. 93.788 - 6 items totaling $18,183, including projected errors over the total population totaling $165,074 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $26,145 • ALN No. 93.788 - $18,183 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,839 items totaling $1,243,944 • ALN No. 93.788 – 1,502 items totaling $2,285,983 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 51 items totaling $26,145, including projected errors over the total population totaling $348,063 • ALN No. 93.788 - 6 items totaling $18,183, including projected errors over the total population totaling $165,074 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $26,145 • ALN No. 93.788 - $18,183 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
Finding 2022-004 ? Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $20,910 Context: Four (4) of sixteen (16) transactions tested. Cause: Unknown Effect: Legacy may allocate unallowable costs to the federal grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-004 ? Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $20,910 Context: Four (4) of sixteen (16) transactions tested. Cause: Unknown Effect: Legacy may allocate unallowable costs to the federal grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-004 ? Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $20,910 Context: Four (4) of sixteen (16) transactions tested. Cause: Unknown Effect: Legacy may allocate unallowable costs to the federal grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-004 ? Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $20,910 Context: Four (4) of sixteen (16) transactions tested. Cause: Unknown Effect: Legacy may allocate unallowable costs to the federal grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: 5 H49MC00119‐21‐00 / 6 H49MC00119‐20‐01 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020‐2024 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass‐through entity made the federal award that were authorized by the federal awarding agency or pass‐through entity. Condition: The Organization lacked supporting documentation for non‐payroll expenses. Due to lack of supporting documentation, period of performance could not be verified. Of the sixty (60) nonpayroll transactions examined, fourteen (14) lacked supporting documentation for review. Effect: Management possibly did not expend funds in accordance with the approved detailed lineitem budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: Known questioned costs of $2,066 and likely questioned costs of $11,507 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: 5 H49MC00119‐21‐00 / 6 H49MC00119‐20‐01 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020‐2024 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass‐through entity made the federal award that were authorized by the federal awarding agency or pass‐through entity. Condition: The Organization lacked supporting documentation for non‐payroll expenses. Due to lack of supporting documentation, period of performance could not be verified. Of the sixty (60) nonpayroll transactions examined, fourteen (14) lacked supporting documentation for review. Effect: Management possibly did not expend funds in accordance with the approved detailed lineitem budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: Known questioned costs of $2,066 and likely questioned costs of $11,507 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for five items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have grant expenses outside the grant period. Cause: The Organization did not have good controls on ensuring the period of performance requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for five items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have grant expenses outside the grant period. Cause: The Organization did not have good controls on ensuring the period of performance requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for five items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have grant expenses outside the grant period. Cause: The Organization did not have good controls on ensuring the period of performance requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for five items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have grant expenses outside the grant period. Cause: The Organization did not have good controls on ensuring the period of performance requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
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.
2021-006 – SPECIAL TESTS AND PROVISIONS – KEY PERSONNEL Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award.” These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The award document specifies key personnel as chief investigators. Federal requirements stipulate the non-federal entity may change the staffing mix and level of involvement within limits specified by agency policy or in the award but may be required to obtain federal awarding agency approval of changes in key personnel (as identified in the award, which may differ from the non-federal entity’s designation in the application/proposal) and changes in the principal investigator’s/project director’s time commitment/level of participation in the project. For grants and cooperative agreements, this may include not only a change in the principal investigator or project director but also the disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator (2 CFR sections 200.308(c) (2) and (3)). Condition: There was a lack of adequate payroll documentation. Payroll records did not demonstrate the level of time commitment and/or potential disengagement from the project by the designated principal investigators. Questioned Costs: Unknown. Context: Total federal expenditures listed on the Schedule of Federal Awards was $6,267,848, of which $232,167 was related to principal investigators. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued) 2021-006 – SPECIAL TESTS AND PROVISIONS – KEY PERSONNEL (Continued) Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Cause: Internal controls and procedures related to the payroll documentation were not effectively designed or performed. Effect: There is a risk that the principal investigators of the National Center for the Advancement of STEM Education, Inc. may not be allocating the proper time commitment to the project in accordance with federal guidelines. Recommendation: Management should establish proper policies and procedures which ensure payroll records clearly indicate the time commitment/level of participation in the project to comply with applicable federal guidelines. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: 5 H49MC00119‐21‐00 / 6 H49MC00119‐20‐01 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020‐2024 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass‐through entity made the federal award that were authorized by the federal awarding agency or pass‐through entity. Condition: The Organization lacked supporting documentation for non‐payroll expenses. Due to lack of supporting documentation, period of performance could not be verified. Of the sixty (60) nonpayroll transactions examined, fourteen (14) lacked supporting documentation for review. Effect: Management possibly did not expend funds in accordance with the approved detailed lineitem budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: Known questioned costs of $2,066 and likely questioned costs of $11,507 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: 5 H49MC00119‐21‐00 / 6 H49MC00119‐20‐01 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020‐2024 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass‐through entity made the federal award that were authorized by the federal awarding agency or pass‐through entity. Condition: The Organization lacked supporting documentation for non‐payroll expenses. Due to lack of supporting documentation, period of performance could not be verified. Of the sixty (60) nonpayroll transactions examined, fourteen (14) lacked supporting documentation for review. Effect: Management possibly did not expend funds in accordance with the approved detailed lineitem budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: Known questioned costs of $2,066 and likely questioned costs of $11,507 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for five items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have grant expenses outside the grant period. Cause: The Organization did not have good controls on ensuring the period of performance requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for five items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have grant expenses outside the grant period. Cause: The Organization did not have good controls on ensuring the period of performance requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for five items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have grant expenses outside the grant period. Cause: The Organization did not have good controls on ensuring the period of performance requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for five items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenses that no support could be provided to support the expense took place during grant period as such there is a question cost of $2,447. Effect: The Organization could have grant expenses outside the grant period. Cause: The Organization did not have good controls on ensuring the period of performance requirement was meet due to staff turn over and being unable to locate documentation. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement are not being adhered to ensure no issues arise. Repeat: This is not a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
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.
2021-006 – SPECIAL TESTS AND PROVISIONS – KEY PERSONNEL Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award.” These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The award document specifies key personnel as chief investigators. Federal requirements stipulate the non-federal entity may change the staffing mix and level of involvement within limits specified by agency policy or in the award but may be required to obtain federal awarding agency approval of changes in key personnel (as identified in the award, which may differ from the non-federal entity’s designation in the application/proposal) and changes in the principal investigator’s/project director’s time commitment/level of participation in the project. For grants and cooperative agreements, this may include not only a change in the principal investigator or project director but also the disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator (2 CFR sections 200.308(c) (2) and (3)). Condition: There was a lack of adequate payroll documentation. Payroll records did not demonstrate the level of time commitment and/or potential disengagement from the project by the designated principal investigators. Questioned Costs: Unknown. Context: Total federal expenditures listed on the Schedule of Federal Awards was $6,267,848, of which $232,167 was related to principal investigators. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued) 2021-006 – SPECIAL TESTS AND PROVISIONS – KEY PERSONNEL (Continued) Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Cause: Internal controls and procedures related to the payroll documentation were not effectively designed or performed. Effect: There is a risk that the principal investigators of the National Center for the Advancement of STEM Education, Inc. may not be allocating the proper time commitment to the project in accordance with federal guidelines. Recommendation: Management should establish proper policies and procedures which ensure payroll records clearly indicate the time commitment/level of participation in the project to comply with applicable federal guidelines. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
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 2021-007: Period of Performance - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance that were authorized by the federal awarding agency or pass-through entity (2 CFR sections, 200.308, 200.309 and 200.403(h)). Condition There was no evidence of the Center's review and approval of the period of performance for expenditures during the year. Cause The Center did not have adequate controls to review period of performance to ensure all goods and services are appropriately included or excluded. Effect The Center may charge goods or services to the grant that are not within the grant's period of performance. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over period of performance. Out of the 25 transactions tested, we noted 25 instances where there was no formal approval of the cost charged to the major program by evidence of a review signature on the labor reports. Additionally, we selected five nonpayroll transactions where all five instances did not have evidence of review. Identification of Repeat Finding Yes, see finding 2020-007. Recommendation The Center should develop written procedures to review all expenditures to ensure they are within the proper period of performance of the grant. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of approval over the period of performance for goods and services purchased under the grant.
Finding 2021-007: Period of Performance - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance that were authorized by the federal awarding agency or pass-through entity (2 CFR sections, 200.308, 200.309 and 200.403(h)). Condition There was no evidence of the Center's review and approval of the period of performance for expenditures during the year. Cause The Center did not have adequate controls to review period of performance to ensure all goods and services are appropriately included or excluded. Effect The Center may charge goods or services to the grant that are not within the grant's period of performance. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over period of performance. Out of the 25 transactions tested, we noted 25 instances where there was no formal approval of the cost charged to the major program by evidence of a review signature on the labor reports. Additionally, we selected five nonpayroll transactions where all five instances did not have evidence of review. Identification of Repeat Finding Yes, see finding 2020-007. Recommendation The Center should develop written procedures to review all expenditures to ensure they are within the proper period of performance of the grant. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of approval over the period of performance for goods and services purchased under the grant.