Finding 2025-002 – Allowable Costs and Period of Performance (Significant Deficiency and Noncompliance)- (Partial repeat finding) Information on the Federal Program: U.S. Department of Education, Higher Education – Institutional Aid (Title III), Assistance Listing No. 84.031 Criteria: 2 CFR Part 200 Subpart E establishes cost principles to apply in determining costs under federal awards. Non-federal entities are also required to establish controls over the disbursement process to ensure compliance with allowable cost requirements. In addition, a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and non-federal entities are also required to establish controls over the disbursement process to ensure compliance with period of performance requirements. [2 CFR sections 200.308, 200.309, and 200.403(h)]. Condition: We selected a sample of 25 non-payroll disbursements and 25 payroll disbursements charged to the grant. There were 44 pay checks tested in the sample of 25; of those 44, nine exceptions were noted. In four instances, there was no documented approved pay rate and in five instances, there was no approval for salary to be charged to the grant number and documentation showed unrestricted, a different account or offer letter had no Title III documentation. Cause: The College did not obtain proper approval by the Director of the program, expenses did not fit into the grant budget line items, approved pay rates were not properly documented as approved Title III expenses for the proper grant period. Effect: The College’s grant disbursements were not properly approved. Questioned Costs: $14,731 Recommendation: We recommend the College strengthen its policies and procedures surrounding payroll and non-payroll grant disbursements to ensure controls are functioning and compliant withfederal regulations. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.
2025-001 Costs Incurred Beyond the Period of Performance Program Name/Assistance Listing Number: 93.788 Opioid STR Federal Agency: Department of Health and Human Services Type of Finding: Significant Deficiency Compliance Requirement: Period of Performance Criteria: According to 2 CFR §§200.1, 200.308, 200.309, 200.344, and 200.403(h), a non-Federal entity may only charge allowable costs incurred during the approved budget period of the Federal award’s period of performance, and any costs incurred before the Federal award was made that were authorized by the Federal awarding agency or pass-through entity. All financial obligations incurred under the Federal award must be liquidated within the required time period. Costs incurred outside the approved period of performance are unallowable and constitute questioned costs. Condition: During cash disbursement testing, it was identified that costs totaling $56,017.62 were incurred after the end of the period of performance (which ended on September 30, 2024; grant ID 2401119 SOR 3.0 – SOS). Although the expenditures were allowable in nature, they were outside the approved period and therefore did not comply with the grant terms. Cause of Condition: The expenditures were incurred after the period of performance, possibly due to timing of invoicing. There was insufficient monitoring or review to ensure that all expenses were properly charged within the approved period. Potential Effect of Condition: The following are the potential effect based on the findings noted above: a. Non-Compliance: The Organization is at risk of non-compliance with the funding agreement, which may lead to questioned costs or repayment obligations. b. Financial Oversight Risk: Continued occurrence may indicate a lack of internal controls ensuring compliance with grant period requirements. Questioned Cost: $56,017.62 Recommendation: We recommend the following: a. Implement a monitoring process to ensure that all costs are incurred within the approved period of performance. b. Document and maintain a checklist of allowable expenses by period to prevent future occurrences of similar issues. Description of the Nature and Extent of Issues Reported: All expenditures outside the period of performance were identified during testing. The total known questioned cost is $56,017.62, which exceeds the $25,000 threshold for reporting under 2 CFR §200.516(a)(3). Management Response: Management concurred with the finding. During the current fiscal year, the Organization has implemented additional controls to ensure that all grant funding is expended within the timeframe allotted
2025-001 – Significant Deficiency– Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement(s): Period of Performance and Reporting ALN 21.027 U.S. Department of the Treasury Criteria: The District was a subrecipient of Ohio’s K-12 School Safety Grant Program. Under Uniform Guidance, 2 CFR §§200.77 and 200.309 require that all costs be incurred within the grant’s period of performance, and §200.344 mandates liquidation of obligations by the specified deadlines, which were December 31, 2023 for encumbrances and September 30, 2024 for liquidation. For reporting, §§200.302(b) and 200.328 require accurate financial and programmatic reporting to the pass-through entity. Condition: The District liquidated $72,970 in expenditures after September 30, 2024, which was beyond the grant’s period of performance. In addition, quarterly reports did not accurately reflect the timing of expenditures, resulting in discrepancies between reported and actual activity between quarters. Context: Our testing focused on expenditures near the end of the performance period and included a review of all four quarterly reports. Multiple reports contained errors in the timing of reported expenditures compared to actual disbursements. Cause: The District lacked controls to prevent expenditures beyond the grant’s performance period and did not have adequate review procedures for quarterly reporting. Effect: The questioned costs may be subject to disallowance, creating a potential liability for the District. Inaccurate financial reporting also increases the risk of improper drawdowns, misinformed oversight, and potential impact on future funding decisions. Questioned Costs: $72,970 Repeat Finding: No Recommendation: We recommend that the District establish and enforce controls to ensure all expenditures are incurred and liquidated within the grant’s period of performance, implement a documented review process for quarterly grant reporting that includes reconciliation to the general ledger prior to submission, and develop a documented training schedule to ensure staff understand Uniform Guidance requirements for compliance with period of performance and reporting. Views of Responsible Officials: See management’s response in the District’s Corrective Action Plan.
Criteria 2 CFR section 200.403, Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient. (d) Be accorded consistent treatment. For example, a cost must not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing requirements of any other federally-financed program in either the current or a prior period. See § 200.306(b). (g) Be adequately documented. See §§ 200.300 through 200.309. (h) Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). 10th Edition Procurement Manual issued by the District in September 2023, Chapter 8 – What to Do When Item or Services Are Received A. Online Goods Receipts Prior to entering an online Goods Receipt (GR), schools and offices must have a copy of the vendor invoice and Purchase Order (PO). They are responsible for verifying the accuracy of the order and entering the “online receiver” into SAP immediately after delivery of materials. Partial receiving is acceptable to account only for materials actually received. Payments are processed based on materials that have been received online. F.1. Payment for Materials Accounts Payable will process payment when the following three items are matched in SAP: (1) Purchase Order, (2) Goods Receipt, and (3) vendor invoice. F.2.c. Contracted Professional Services Accounts Payable will process payments for contracted professional services when the following four items are matched: executed contract/amendment, Purchase Order, vendor invoice, and approved authorization for payment. F.3. Contract Close-Out Upon contract expiration or termination, the District must ensure all deliverables have been received, final invoices paid, indirect costs settled, and any unspent funds unencumbered and transferred to the appropriate District account. Condition As part of our review of cash disbursement expenditures, we selected a statistically valid sample of forty (40) cash disbursement transactions from each of the following programs: Title I, Title IV, and Perkins. We reviewed the supporting documentation for these transactions to determine whether the expenditures were allowable under program regulations, accurately charged to the programs, and appropriately supported in accordance with 2 CFR Section 200.403 and the District Procurement Manual. Title I: From the $3,265,728 sample tested (out of $48,286,535 total disbursements), we identified one (1) purchase order with a variance between the Goods Receipt (GR) and vendor invoice (IR) amounts. This discrepancy resulted in an overstatement of reported expenditures by $21,394. The District subsequently corrected this by reversing the amount to the expenditure accounts in FY 2026. Title IV: From the $560,572 sample tested (out of $9,999,536 total disbursements), we identified one (1) purchase order with a variance between the GR and IR amounts, resulting in an overstatement of reported expenditures by $94,500. The District subsequently corrected this by reversing the amount to the expenditure accounts in FY 2026. Perkins: Additionally, from a $329,432 sample (out of $5,738,606 total disbursements), we identified seven (7) disbursements totaling $868 that lacked adequate proof of delivery of materials. Supporting documentation, such as signed delivery receipts or equivalent evidence of goods received, was not available for these transactions. Cause and Effect These conditions occurred because adjustments were not made to the GR amounts to reflect changes in goods or services received after the initial recording. The unadjusted GR balances led to variances between the GR and IR amounts, resulting in overstatements of reported expenditures for the affected programs. In addition, the lack of adequate proof of delivery of materials occurred because GR were entered without supporting documentation to substantiate that the materials were received. This increased the risk of payment for goods not received, misstatement of expenditures, and noncompliance with federal cost documentation requirements under 2 CFR section 200.403(g). Questioned Costs • Title I (AL No. 84.010): $21,394 overstated due to GR-IR variance. • Title IV (AL No. 84.424A): $94,500 overstated due to GR-IR variance. • Perkins (AL No. 84.048): $868 lacked sufficient supporting documentation that the goods were received. Recommendation We recommend that the District: 1. Strengthen review and reconciliation procedures to ensure that adjustments to the Goods Receipt (GR) are made promptly to reflect actual goods or services received. 2. Enforce documentation controls to require that all Goods Receipts are supported by adequate proof of delivery (e.g., signed delivery receipts, receiving reports, or equivalent evidence) before processing payments. 3. Provide staff training on documentation and reconciliation requirements to ensure compliance with federal cost principles and the District Procurement Manual.
Item 2025-003 - Period of Performance - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Material Weakness) Criteria: Per the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200), specifically §200.77 and §200.309, costs must be incurred during the period of performance stated in the federal award. The HRSA Notice of Award for Section 330 grants also explicitly defines the budget period and restricts reimbursement to allowable costs incurred within the said timeframe. Statement of Condition: During our audit, we noted that LBUCC drew down $190,688 of federal grant funds under the Section 330 program for the budget period beginning June 1, 2024 to reimburse salary expenses incurred in May 2024. Cause: LBUCC did not have adequate controls in place to ensure that expenses reimbursed under the Section 330 grant aligned with the grant’s defined period of performance, which resulted in salary costs incurred prior to the start of the budget period to be improperly included in the drawdown request. Effect: Failure to draw funds for eligible expenses incurred within the period of performance expose LBUCC to potential repayment obligations or restrictions on future grant funding. Questioned Costs: None. Although LBUCC drew down $190,688 of salaries incurred in May 2024 from the budget period that began on June 1, 2024, LBUCC still had more than $190,688 worth of salaries of employees who worked on the Health Center Program Cluster but have not been charged to the Health Center Program Cluster. Since LBUCC is able to replace the May 2024 salaries with salaries that were incurred within the program period we do not deem that there is any questioned cost in relation to this finding. Context: There are 67 employees whose salaries were incurred in May 2024 and charged to the budget period that began June 1, 2024. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC implement procedures to ensure that all drawdowns are supported by expenses incurred strictly within the grant’s approved period of performance and train staff on grant compliance requirements. Management Response: Management agrees with the finding and will implement these measures to strengthen their grant management practices and to prevent future noncompliance.
Finding 2025.003 – Period of Performance – Significant Deficiency and Noncompliance Assistance Listing Number 14.267 - Continuum of Care, U.S. Department of Housing and Urban Services, Pass-Through Entity: State of Connecticut Department of Housing, Award Number: 24DOH0901CX, Pass-Through Entity: United Way of Southeastern Connecticut, Award Number: 21DOH1001DA 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 was authorized by the federal awarding agency or pass-through entity (2 CFR sections, 200.308, 200.309 and 200.403(h)). Condition Certain expenses were charged to the grant that were not properly obligated prior to the end of the grant period. Purchase orders were issued without placing the actual order, or the item was ordered after the period of performance concluded. Cause The Council did not have adequate policies, procedures and controls in place to ensure compliance with the requirements regarding period of performance. Effect or Potential Effect Inadequate controls over period of performance led to expenses charged to the grant that were not incurred during the required period of performance. Questioned Costs $2,113 Context We selected 5 expenditures for testing over the period of performance requirement. Out of the 5 expenditures tested, we noted 2 instances where expenditures were not spent or obligated appropriately in the right grant period. Identification as a Repeat Finding This is not a repeat finding. Recommendation We recommend that management implement additional controls and policies over period of performance. Staff who purchase items with grant funds should have additional training on period of performance requirements. Views of Responsible Officials TVCCA recognizes the validity of this finding. TVCCA is strengthening its period-of-performance controls by training all staff with purchasing authority, and finance staff, on grant deadlines, obligation definitions, and allowable spend-down periods. Internal controls will be enhanced by incorporating quarterly cutoff testing into the month-end close checklist. Additionally, cutoff testing results will be monitored quarterly as part of the quarter-end review process.
Condition: During our audit of federal award expenditures for the fiscal year ended December 31, 2024, we identified certain instances where costs incurred in prior periods were improperly charged to the current year's federal awards. Criteria: 2 CFR 200.403(g) requires that costs must be "determined in accordance with generally accepted accounting principles (“GAAP”).” Additionally, 2 CFR 200.309 states that "a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance." Cause: Management indicated that year-end processing procedures did not adequately identify and properly allocate expenses to the appropriate period. Effect: Improper period allocation of costs resulted in inaccurate financial reporting of federal award expenditures and potential violation of period of performance requirements. Repeat Finding: No Recommendation: It is recommended that management implement enhanced review procedures for period-end expenses to ensure a proper cutoff, develop a monitoring system to track expenses by period of performance, and a establish a forma process for review and approval of payments made near the end of a reporting period. Views of responsible officials: Management of the Organization concurs with the finding and has implemented a corrective action plan to address the identified deficiency.
Condition: During our audit of federal award expenditures for the fiscal year ended December 31, 2024, we identified certain instances where costs incurred in prior periods were improperly charged to the current year's federal awards. Criteria: 2 CFR 200.403(g) requires that costs must be "determined in accordance with generally accepted accounting principles (“GAAP”).” Additionally, 2 CFR 200.309 states that "a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance." Cause: Management indicated that year-end processing procedures did not adequately identify and properly allocate expenses to the appropriate period. Effect: Improper period allocation of costs resulted in inaccurate financial reporting of federal award expenditures and potential violation of period of performance requirements. Repeat Finding: No Recommendation: It is recommended that management implement enhanced review procedures for period-end expenses to ensure a proper cutoff, develop a monitoring system to track expenses by period of performance, and a establish a forma process for review and approval of payments made near the end of a reporting period. Views of responsible officials: Management of the Organization concurs with the finding and has implemented a corrective action plan to address the identified deficiency.
Condition: During our audit of federal award expenditures for the fiscal year ended December 31, 2024, we identified certain instances where costs incurred in prior periods were improperly charged to the current year's federal awards. Criteria: 2 CFR 200.403(g) requires that costs must be "determined in accordance with generally accepted accounting principles (“GAAP”).” Additionally, 2 CFR 200.309 states that "a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance." Cause: Management indicated that year-end processing procedures did not adequately identify and properly allocate expenses to the appropriate period. Effect: Improper period allocation of costs resulted in inaccurate financial reporting of federal award expenditures and potential violation of period of performance requirements. Repeat Finding: No Recommendation: It is recommended that management implement enhanced review procedures for period-end expenses to ensure a proper cutoff, develop a monitoring system to track expenses by period of performance, and a establish a forma process for review and approval of payments made near the end of a reporting period. Views of responsible officials: Management of the Organization concurs with the finding and has implemented a corrective action plan to address the identified deficiency.
Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 6/1/24-5/31/25 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: A nonfederal entity may only charge 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 made the federal award that were authorized by the federal awarding agency (2 CFR sections 200.308, 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Cost incurred prior to the start of the period of performance were charged to the grant. Questioned Costs: $2,979 Context: Two of thirteen transactions selected for testing. Cause: These costs related to a payroll period which crossed over two different grant budget periods, and the costs allocated to the grant were not prorated for the number of days within the period of performance. Effect: Unallowable costs may be allocated to the 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 pay periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by the days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 6/1/24-5/31/25 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: A nonfederal entity may only charge 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 made the federal award that were authorized by the federal awarding agency (2 CFR sections 200.308, 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Cost incurred prior to the start of the period of performance were charged to the grant. Questioned Costs: $2,979 Context: Two of thirteen transactions selected for testing. Cause: These costs related to a payroll period which crossed over two different grant budget periods, and the costs allocated to the grant were not prorated for the number of days within the period of performance. Effect: Unallowable costs may be allocated to the 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 pay periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by the days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Condition: During our audit of federal award expenditures for the fiscal year ended December 31, 2024, we identified certain instances where costs incurred in prior periods were improperly charged to the current year's federal awards. Criteria: 2 CFR 200.403(g) requires that costs must be "determined in accordance with generally accepted accounting principles (“GAAP”).” Additionally, 2 CFR 200.309 states that "a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance." Cause: Management indicated that year-end processing procedures did not adequately identify and properly allocate expenses to the appropriate period. Effect: Improper period allocation of costs resulted in inaccurate financial reporting of federal award expenditures and potential violation of period of performance requirements. Repeat Finding: No Recommendation: It is recommended that management implement enhanced review procedures for period-end expenses to ensure a proper cutoff, develop a monitoring system to track expenses by period of performance, and a establish a forma process for review and approval of payments made near the end of a reporting period. Views of responsible officials: Management of the Organization concurs with the finding and has implemented a corrective action plan to address the identified deficiency.
Condition: During our audit of federal award expenditures for the fiscal year ended December 31, 2024, we identified certain instances where costs incurred in prior periods were improperly charged to the current year's federal awards. Criteria: 2 CFR 200.403(g) requires that costs must be "determined in accordance with generally accepted accounting principles (“GAAP”).” Additionally, 2 CFR 200.309 states that "a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance." Cause: Management indicated that year-end processing procedures did not adequately identify and properly allocate expenses to the appropriate period. Effect: Improper period allocation of costs resulted in inaccurate financial reporting of federal award expenditures and potential violation of period of performance requirements. Repeat Finding: No Recommendation: It is recommended that management implement enhanced review procedures for period-end expenses to ensure a proper cutoff, develop a monitoring system to track expenses by period of performance, and a establish a forma process for review and approval of payments made near the end of a reporting period. Views of responsible officials: Management of the Organization concurs with the finding and has implemented a corrective action plan to address the identified deficiency.
Condition: During our audit of federal award expenditures for the fiscal year ended December 31, 2024, we identified certain instances where costs incurred in prior periods were improperly charged to the current year's federal awards. Criteria: 2 CFR 200.403(g) requires that costs must be "determined in accordance with generally accepted accounting principles (“GAAP”).” Additionally, 2 CFR 200.309 states that "a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance." Cause: Management indicated that year-end processing procedures did not adequately identify and properly allocate expenses to the appropriate period. Effect: Improper period allocation of costs resulted in inaccurate financial reporting of federal award expenditures and potential violation of period of performance requirements. Repeat Finding: No Recommendation: It is recommended that management implement enhanced review procedures for period-end expenses to ensure a proper cutoff, develop a monitoring system to track expenses by period of performance, and a establish a forma process for review and approval of payments made near the end of a reporting period. Views of responsible officials: Management of the Organization concurs with the finding and has implemented a corrective action plan to address the identified deficiency.
Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 6/1/24-5/31/25 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: A nonfederal entity may only charge 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 made the federal award that were authorized by the federal awarding agency (2 CFR sections 200.308, 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Cost incurred prior to the start of the period of performance were charged to the grant. Questioned Costs: $2,979 Context: Two of thirteen transactions selected for testing. Cause: These costs related to a payroll period which crossed over two different grant budget periods, and the costs allocated to the grant were not prorated for the number of days within the period of performance. Effect: Unallowable costs may be allocated to the 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 pay periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by the days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 6/1/24-5/31/25 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: A nonfederal entity may only charge 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 made the federal award that were authorized by the federal awarding agency (2 CFR sections 200.308, 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Cost incurred prior to the start of the period of performance were charged to the grant. Questioned Costs: $2,979 Context: Two of thirteen transactions selected for testing. Cause: These costs related to a payroll period which crossed over two different grant budget periods, and the costs allocated to the grant were not prorated for the number of days within the period of performance. Effect: Unallowable costs may be allocated to the 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 pay periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by the days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding Number: 2024-003 Federal Program: CDBG – Entitlement Grants Cluster Federal Award Identification Number and Year: B-22-MC-39-0001, 2024 Assistance Listing Number (ALN): 14.218 Federal Awarding Agency: Department of Housing and Urban Development Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Period of Performance 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 sections 2 CFR 200.308, 200.309, and 200.403(h). A period of performance may contain one or more budget periods. Condition: The City charged costs that were incurred prior to the beginning of the period of performance of the grant. Questioned Costs: Total of $44,198 Identification of How Questioned Costs Were Computed: Total known questioned costs of $22,110, and total projection of $22,088 for a total of $44,198. Context: During testing, we identified three operational journals with transactions that were incurred outside of the period of performance of the grant. The requirement is outlined in the funding approval/agreement and applicable guidelines referenced above. Cause and Effect: The City did not have internal controls in place to ensure that only costs that occurred within the period of performance were charged to grant. As a result, the City charged costs that were incurred prior to the start of the grant’s period of performance. Recommendation: The City should implement controls and processes to ensure costs are charged within the appropriate grant period. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Compliance Requirement Allowable Costs and Allowable Activities Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Program Port Security Grant Program ALN # 97.056 Federal Agency Department of Homeland Security – Direct Award Federal Award Year 2021 and 2023 Grant Numbers EMW-2021-PU-00030- IJ#3 EMW-2023-PU-00164- IJ#4 Questioned Costs $209,855 Criteria - Federal rules require that grant funds be spent only on allowable and necessary costs that are directly related to the purpose of the award. For the Port Security Grant Program (PSGP), this means expenditures must match the projects described in the approved Investment Justification (IJ). In addition, all costs must be incurred within the official grant period; expenses made before or after the authorized performance dates are not permitted. Uniform Guidance establishes clear requirements for allowability of costs under federal awards: • 2 CFR 200.403 – Costs must be necessary, reasonable, allocable, and consistently treated in accordance with the terms and conditions of the federal award. • 2 CFR 200.405 – Costs must be directly allocable to the federal award in proportion to the benefits received. • 2 CFR 200.403(c) and 200.404 – Costs must conform to limitations or exclusions set forth in the award documents and applicable federal regulations. • 2 CFR 200.309 – A non-federal entity may charge to the federal award only allowable costs incurred during the period of performance, unless specifically authorized otherwise.Condition - Testing of 50 invoices identified significant noncompliance. Fourteen (14) invoices represented expenditures that were not aligned with the approved Investment Justification (IJ), indicating that funds were used for purposes outside the scope of the grant award. In addition, one (1) invoice reflected costs incurred prior to the authorized period of performance, in direct violation of federal grant requirements. a) Expenditures were charged to the 2021 PSGP for the purchase of camera equipment, installation, and project management activities that lacked support within the approved Investment Justification No. 3 MSOC Security Sustainment Costs, resulting in questioned costs of $78,910. b) Expenditures were charged to the 2023 PSGP for the purchase of computer equipment, conference room enhancements, and biological and cultural survey that lacked support within the approved Investment Justification No. 3 GIS Acquisition and Implementation, resulting in questioned costs of $115,044 c) Expenditures were charged to the 2023 PSGP for the purchase of executive leadership training and datto backups that lacked support within the approved Investment Justification No. 4 Sustainment for Cybersecurity Network and IT Systems, resulting in questioned costs of $15,901Cause - The District failed to implement and enforce adequate internal controls to ensure that expenditures were reviewed and validated against both the approved Investment Justification and the grant’s period of performance prior to authorization. This lack of oversight reflects a breakdown in management’s responsibility for compliance with federal grant requirements. Effect - Because the District did not ensure expenditures were properly reviewed against the approved Investment Justifications and the authorized period of performance, a total of $209,855 in questioned costs was identified. These unallowable expenditures increase the risk that federal grantor agencies may require repayment or disallowance of costs, and indicate material noncompliance with federal grant requirements. The lack of adequate review and oversight also undermines accountability for federal funds, creating heightened risk of waste, abuse, and additional future noncompliance. Recommendation - The District must implement and enforce formal review procedures requiring all PSGP expenditures to be cross-checked against the approved Investment Justification (IJ) and verified for compliance with the grant’s period of performance prior to payment. No disbursement of federal funds should occur until documentation demonstrates that the expenditure directly aligns with the approved grant scope and timing. The District must consult with FEMA regarding the allowability of identified questioned costs.
2024-010 Period of Performance Assistance Listing No.: 14.267 Continuum of Care Program Condition: The Organization was unable to demonstrate consistent controls over the period of performance requirement. 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 are no questioned costs. Cause: The Organization did not have good controls on ensuring the period of performance requirement was met due to staff turn over. Effect: The Organization could have incurred grant expenditures outside the grant period. Perspective: Two of forty items selected for testing did not have documentation of the control over compliance with the period of performance requirement. Repeat Finding: This is a repeat finding. See finding 2023-014. Based on timing of prior year audit the Organization did not have time to fully correct the issue. Recommendation: In order to prevent future occurences of this deficiency, RBT recommends that management expand controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Auditee's Response: The Organization agrees with the finding. See attached corrective action plan.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 6/1/2024; 2302ILLIEI 3/1/2023; G 2302ILLIEA 10/1/2022 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 23-274038; 23-224038 Award Period: June 1, 2024 through September 30, 2025; March 1, 2023 through August 31, 2024; October 1, 2022 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires that only allowable costs incurred during the approved budget period of a federal award’s period of performance be charged to the award. Effective internal controls should include procedures that involve costs charged to federal awards being reviewed and approved for proper period of performance. Condition: The County charged costs to the federal award after the end of the period of performance. Furthermore, although payroll transactions charged to the federal award were reviewed and approved, documentation of such review was not retained. Questioned Costs: $706 Context: 4 of 97 transactions tested were incurred after the period of performance end date. All 18 payroll transactions tested lacked documentation of review and approval. Cause: Costs were inadvertently claimed outside the period of performance. Documentation of review and approval for payroll transactions was also not retained. Effect: Charging costs outside the period of performance can result in unallowable costs being charged to federal awards, which could lead to noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a repeat of a finding in the prior year. The prior year finding number was 2023-005. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2024 – 003 Period of Performance (Continued) Recommendation: We recommend that the County review and strengthen its internal controls to ensure that only costs incurred within the period of performance are charged. Costs charged to federal awards should be reviewed and approved for proper period of performance, and documentation of such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2024-007 – Allowable Costs & Period of Performance (Material Weakness and Noncompliance) Information on the Federal Program: U.S. Department of Education, Higher Education- Institutional Aid (Title III), Assistance Listing No. 84.031 Criteria: 2 CFR Part 200 Subpart E establishes cost principles to apply in determining costs under federal awards. Non-federal entities are also required to establish controls over the disbursement process to ensure compliance with allowable cost requirements. In addition, 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)). Condition: We selected a sample of 25 non-payroll disbursements and 25 payroll disbursements charged to the grant. Of the 25 non-payroll, 4 were missing an approval by the Director of Title III Programs and 4 costs were not in the applicable budgets. In addition, 2 were charged to a fund code for a grant period that ended September 30, 2023. There were 44 pay checks tested in the sample of 25; of those 44, 31 exceptions were noted as having an issue around the approved pay rate documentation. In 9 instances, there was no documented approved pay rate, only support provided was a local salary schedule for multiple positions for 6 of the exceptions. In 15 instances, there was no approval for salary to be charged to the grant number and documentation showed unrestricted, a different account or offer letter had no Title III documentation. In 7 instances, the approved pay rate did not agree to actual paycheck report. Cause: The College did not obtain proper approval by the Director of the program, expenses did not fit into the grant budget line items, approved pay rates were not properly documented and the College continued to use funds after the grant period ended based on verbal instruction. Effect: The College’s grant disbursements were not properly approved. Questioned Costs: $35,461 Recommendation: We recommend the College strengthen its policies and procedures surrounding payroll and non-payroll grant disbursements to ensure controls are functioning and compliant with federal regulations Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.
2024-002 Internal Controls over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Requirements (Significant Deficiency) Information on the Federal Program: U.S. Agency for International Development Assistance Listing Number: 98.001 Assistance Listing Name: USAID Foreign Assistance for Programs Overseas Grant Award Number(s): Direct Award Number Award Period 720BHA22GR00225 May 13, 2022 through May 10, 2024 720BHA22GR00127 April 15, 2022 through April 14, 2024 Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to 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 a framework such as the “Internal Control Integrated Framework”, issued by the COSO. In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), 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. A period of performance may contain one or more budget periods. Condition: During our testing of the activities allowed or unallowed and allowable costs/cost principles compliance requirements, we identified one disbursement sample out of a total of twenty-five disbursement samples tested wherein management charged the federal program on June 2024 when the transaction happened on December 2022. In particular, the inventory distribution in the amount of $4,258.53 that took place in December 2022 should have been recorded as an expense in fiscal year 2023 rather than in fiscal year 2024. In addition, during our testing of period of performance compliance requirements, we also noted another inventory distribution in the amount of $235.89 that took place on August 2023 but it was only recorded on June 2024. The expenditures are allowable and within the period of performance, however, the controls over timely reconciliation and recording the inventory distributions did not occur in the appropriate reporting period. Questioned Costs: There are no known or likely questioned costs. Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method. Cause: Delays in performing the reconciliation and timely recording of inventory distributions in certain CRS country offices were caused by personnel’s unfamiliarity with the use of the new Supply Chain Management system, a system used in inventory management. Effect: Failure to timely reconcile and record transactions in the correct accounting period results in incorrect SEFA reporting to the U.S. government. Repeat Finding: No. Recommendation: We recommend that management ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. In addition, management should conduct appropriate training to CRS country office personnel with the proper use of the Supply Chain Management system to ensure timely reconciliation and recording of inventory distributions. Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance the inventory reconciliation processes.
2024-002 Internal Controls over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Requirements (Significant Deficiency) Information on the Federal Program: U.S. Agency for International Development Assistance Listing Number: 98.001 Assistance Listing Name: USAID Foreign Assistance for Programs Overseas Grant Award Number(s): Direct Award Number Award Period 720BHA22GR00225 May 13, 2022 through May 10, 2024 720BHA22GR00127 April 15, 2022 through April 14, 2024 Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to 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 a framework such as the “Internal Control Integrated Framework”, issued by the COSO. In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), 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. A period of performance may contain one or more budget periods. Condition: During our testing of the activities allowed or unallowed and allowable costs/cost principles compliance requirements, we identified one disbursement sample out of a total of twenty-five disbursement samples tested wherein management charged the federal program on June 2024 when the transaction happened on December 2022. In particular, the inventory distribution in the amount of $4,258.53 that took place in December 2022 should have been recorded as an expense in fiscal year 2023 rather than in fiscal year 2024. In addition, during our testing of period of performance compliance requirements, we also noted another inventory distribution in the amount of $235.89 that took place on August 2023 but it was only recorded on June 2024. The expenditures are allowable and within the period of performance, however, the controls over timely reconciliation and recording the inventory distributions did not occur in the appropriate reporting period. Questioned Costs: There are no known or likely questioned costs. Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method. Cause: Delays in performing the reconciliation and timely recording of inventory distributions in certain CRS country offices were caused by personnel’s unfamiliarity with the use of the new Supply Chain Management system, a system used in inventory management. Effect: Failure to timely reconcile and record transactions in the correct accounting period results in incorrect SEFA reporting to the U.S. government. Repeat Finding: No. Recommendation: We recommend that management ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. In addition, management should conduct appropriate training to CRS country office personnel with the proper use of the Supply Chain Management system to ensure timely reconciliation and recording of inventory distributions. Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance the inventory reconciliation processes.
2024-003 Internal Controls over Compliance and Compliance with Period of Performance Requirement (Significant Deficiency) Information on the Federal Program: U.S. Department of Agriculture Assistance Listing Number: 10.612 Assistance Listing Name: USDA Local and Regional Food Aid Procurement Program Grant Award Number: Direct Award Number Award Period LRP-686-2019/015-00-A October 1, 2019 through September 30, 2024 Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to 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 a framework such as the “Internal Control Integrated Framework”, issued by the COSO. In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), 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. A period of performance may contain one or more budget periods. Condition: During our testing of the period of performance compliance requirements, we identified two disbursement samples for a total of $1,574.09 out of a total of twenty-five disbursement samples tested wherein management was unable to provide evidence that the expenditures charged to the program were valid and incurred within the appropriate period of performance. Management also subsequently concluded that these transactions should have been captured as inventory and not charged as expenditure to the federal program. Questioned Costs: $1,574.09 from our samples. Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method. The total amount of the twenty-five samples selected for testing was $62,914. Cause: CRS country office personnel did not adhere to CRS’s documented policies and procedures for ensuring only valid and allowable expenses are charged to the federal program within the appropriate period of performance. Effect: Without adequate internal controls in place to ensure costs are properly reviewed for allowability and appropriate period of performance, CRS could be noncompliant with the allowability and period of performance requirements and could request funds for costs that are unallowed. Repeat Finding: No. Recommendation: We recommend that management follow its own policies, procedures and controls to ensure that the inventory expenses charged to the federal program are allowable within the period of performance. Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance processes around inventory expense allowability.
Condition: During our audit, we noted the Agency incurred expenditures and charged a federal award outside the approved period of performance for the grant. Criteria: Under 2 CFR Part 200.309, non-federal entities may charge to the federal award only allowable costs incurred during the period of performance Costs incurred outside this period are not allowable unless prior written approval is obtained from the awarding agency. Cause: The Agency accrued an expenditure in its accounting system and did not verify that the expenditure was for a service date within the approved period of performance. Effect: The federal award was overbilled by $1,904. Recommendation:We recommend the Agency more carefully monitor expenditures incurred near grant end dates to ensure compliance with period of performance compliance requirements. Management Response: Management agrees with this finding and will more carefully monitor grant end dates to comply with period of performance compliance requirements.
Federal Program: AL 20.237 – High Priority Commercial Motor Vehicle Grant Program, Federal Motor Carrier Safety Administration (FMCSA) Cluster. Compliance Requirements: Period of Performance. Type of Finding: Material Noncompliance and Internal Control Over Noncompliance. Criteria: Per guidance provided by Section 7.5 of the Motor Carrier Safety Assistance Program – Grant Comprehensive Policy, 49 U.S. Code § 31104(f)(2), and 200 Code of Federal Regulations (“CFR”) Section 200.309, only allowable costs incurred during the period of performance specified in the Notice of Grant Award may be charged to the related federal award. Condition and Context: On September 30, 2023, IRP prepaid $174,465 for data repository hosting and maintenance services that were not incurred until the quarter ended December 31, 2023. IRP reported this expenditure in Reports SF-425 and requested its reimbursement on form SF-270, for the quarter ended September 30, 2023, and charged the amount to federal award FM-MP- 0580-21. As expenditure occurred during the fiscal year ending September 30, 2024, it should be charged to federal award FM-MHP-0762-23, which has a period of performance from September 1, 2023, to September 30, 2025 per review of the notice of grant award. Questioned Costs: $174,465. Cause: Management lacked the appropriate knowledge of the period of performance requirements specified by the federal awarding agency and Uniform Guidance. Effect or Potential Effect: This error resulted in a $174,465 charge to award FM-MP-0580-21 for services that were incurred outside of the period of performance. Recommendation: We recommend management implement pre-submission controls, such as requiring date validation for all expenses against the award's period of performance and providing training to educate staff on 2 CFR requirements and period-of-performance limitations. We understand management has alerted FMCSA to the error and intends to work with them to correct the reporting of these expenditures, upon submission to the Federal Audit Clearinghouse of the data collection form and single audit reporting package for the year ended September 30, 2024. Views of Responsible Officials: Management acknowledges the finding and concurs with the recommendation. Grant management procedures have been revised to verify that services are received and costs incurred within the authorized period of performance in accordance with 2 CFR § 200.403 before the costs are charged to a federal award. Staff involved in grant management will receive targeted training on 2 CFR requirements related to period-ofperformance compliance and allowable cost timing.
Criteria or specific requirement: Per the 2024 OMB Compliance Supplement, "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))." Allowable costs must meet the standards set forth in 2 CFR Part 200, Subpart E. Condition: Costs were booked to incorrect program codes, resulting in unsupported charges being booked to the federal program. Both payroll and non-payroll expenditures were charged to the Federal program prior to the period of performance start date. Questioned costs: Known $1,098 Context: In period of performance testing, the majority of samples tested for beginning period of performance (31/40 samples) related to June 2024 payroll. In all of these tested samples, time was booked to the Federal program prior to the program start date of June 20, 2024. Similarly, there was no adjustments for other charges that are normally booked for the full month at a time, including: per diems (2/40 samples) and fuel (1/40 samples). One additional error was related to time booked to the Federal program when no time was coded to that program during the pay period tested. The final error was related to February amortization that was not processed in time and therefore mistakenly booked to the program. In payroll testing, 2/40 samples tested were booked to a charge code that was not reflected in the supporting timesheets. The amounts booked incorrectly to the major program are considered unallowable costs. Cause: MTI payroll is run monthly. Time should not have been coded to the Federal program in question until the program start date of June 20, 2024, however as most programs begin on the first of the month (not mid-month) this was overlooked by the supervisors and finance team who are supposed to review timesheets and make correction to ensure allocations are booked to the correct programs for the correct dates. Additional errors due to human error. Effect: Costs incurred outside of the Federal program's period of performance and costs that are not supported by underlying documentation are not allowable under the program. The organization may be required to submit reimbursements for these amounts. Repeat Finding: No Recommendation: Management should review its existing control structure and ensure that there are adequate processes and controls to ensure only expenditures incurred during the period of performance are booked to Federal programs and that the correct program codes are charged, based on the underlying supporting documentation. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per the 2024 OMB Compliance Supplement, "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))." Allowable costs must meet the standards set forth in 2 CFR Part 200, Subpart E. Condition: Costs were booked to incorrect program codes, resulting in unsupported charges being booked to the federal program. Both payroll and non-payroll expenditures were charged to the Federal program prior to the period of performance start date. Questioned costs: Known $1,098 Context: In period of performance testing, the majority of samples tested for beginning period of performance (31/40 samples) related to June 2024 payroll. In all of these tested samples, time was booked to the Federal program prior to the program start date of June 20, 2024. Similarly, there was no adjustments for other charges that are normally booked for the full month at a time, including: per diems (2/40 samples) and fuel (1/40 samples). One additional error was related to time booked to the Federal program when no time was coded to that program during the pay period tested. The final error was related to February amortization that was not processed in time and therefore mistakenly booked to the program. In payroll testing, 2/40 samples tested were booked to a charge code that was not reflected in the supporting timesheets. The amounts booked incorrectly to the major program are considered unallowable costs. Cause: MTI payroll is run monthly. Time should not have been coded to the Federal program in question until the program start date of June 20, 2024, however as most programs begin on the first of the month (not mid-month) this was overlooked by the supervisors and finance team who are supposed to review timesheets and make correction to ensure allocations are booked to the correct programs for the correct dates. Additional errors due to human error. Effect: Costs incurred outside of the Federal program's period of performance and costs that are not supported by underlying documentation are not allowable under the program. The organization may be required to submit reimbursements for these amounts. Repeat Finding: No Recommendation: Management should review its existing control structure and ensure that there are adequate processes and controls to ensure only expenditures incurred during the period of performance are booked to Federal programs and that the correct program codes are charged, based on the underlying supporting documentation. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per the 2024 OMB Compliance Supplement, "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))." Allowable costs must meet the standards set forth in 2 CFR Part 200, Subpart E. Condition: Costs were booked to incorrect program codes, resulting in unsupported charges being booked to the federal program. Both payroll and non-payroll expenditures were charged to the Federal program prior to the period of performance start date. Questioned costs: Known $1,098 Context: In period of performance testing, the majority of samples tested for beginning period of performance (31/40 samples) related to June 2024 payroll. In all of these tested samples, time was booked to the Federal program prior to the program start date of June 20, 2024. Similarly, there was no adjustments for other charges that are normally booked for the full month at a time, including: per diems (2/40 samples) and fuel (1/40 samples). One additional error was related to time booked to the Federal program when no time was coded to that program during the pay period tested. The final error was related to February amortization that was not processed in time and therefore mistakenly booked to the program. In payroll testing, 2/40 samples tested were booked to a charge code that was not reflected in the supporting timesheets. The amounts booked incorrectly to the major program are considered unallowable costs. Cause: MTI payroll is run monthly. Time should not have been coded to the Federal program in question until the program start date of June 20, 2024, however as most programs begin on the first of the month (not mid-month) this was overlooked by the supervisors and finance team who are supposed to review timesheets and make correction to ensure allocations are booked to the correct programs for the correct dates. Additional errors due to human error. Effect: Costs incurred outside of the Federal program's period of performance and costs that are not supported by underlying documentation are not allowable under the program. The organization may be required to submit reimbursements for these amounts. Repeat Finding: No Recommendation: Management should review its existing control structure and ensure that there are adequate processes and controls to ensure only expenditures incurred during the period of performance are booked to Federal programs and that the correct program codes are charged, based on the underlying supporting documentation. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-007 – Allowable Costs & Period of Performance (Material Weakness and Noncompliance) Information on the Federal Program: U.S. Department of Education, Higher Education- Institutional Aid (Title III), Assistance Listing No. 84.031 Criteria: 2 CFR Part 200 Subpart E establishes cost principles to apply in determining costs under federal awards. Non-federal entities are also required to establish controls over the disbursement process to ensure compliance with allowable cost requirements. In addition, 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)). Condition: We selected a sample of 25 non-payroll disbursements and 25 payroll disbursements charged to the grant. Of the 25 non-payroll, 4 were missing an approval by the Director of Title III Programs and 4 costs were not in the applicable budgets. In addition, 2 were charged to a fund code for a grant period that ended September 30, 2023. There were 44 pay checks tested in the sample of 25; of those 44, 31 exceptions were noted as having an issue around the approved pay rate documentation. In 9 instances, there was no documented approved pay rate, only support provided was a local salary schedule for multiple positions for 6 of the exceptions. In 15 instances, there was no approval for salary to be charged to the grant number and documentation showed unrestricted, a different account or offer letter had no Title III documentation. In 7 instances, the approved pay rate did not agree to actual paycheck report. Cause: The College did not obtain proper approval by the Director of the program, expenses did not fit into the grant budget line items, approved pay rates were not properly documented and the College continued to use funds after the grant period ended based on verbal instruction. Effect: The College’s grant disbursements were not properly approved. Questioned Costs: $35,461 Recommendation: We recommend the College strengthen its policies and procedures surrounding payroll and non-payroll grant disbursements to ensure controls are functioning and compliant with federal regulations Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.
2024-002 Internal Controls over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Requirements (Significant Deficiency) Information on the Federal Program: U.S. Agency for International Development Assistance Listing Number: 98.001 Assistance Listing Name: USAID Foreign Assistance for Programs Overseas Grant Award Number(s): Direct Award Number Award Period 720BHA22GR00225 May 13, 2022 through May 10, 2024 720BHA22GR00127 April 15, 2022 through April 14, 2024 Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to 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 a framework such as the “Internal Control Integrated Framework”, issued by the COSO. In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), 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. A period of performance may contain one or more budget periods. Condition: During our testing of the activities allowed or unallowed and allowable costs/cost principles compliance requirements, we identified one disbursement sample out of a total of twenty-five disbursement samples tested wherein management charged the federal program on June 2024 when the transaction happened on December 2022. In particular, the inventory distribution in the amount of $4,258.53 that took place in December 2022 should have been recorded as an expense in fiscal year 2023 rather than in fiscal year 2024. In addition, during our testing of period of performance compliance requirements, we also noted another inventory distribution in the amount of $235.89 that took place on August 2023 but it was only recorded on June 2024. The expenditures are allowable and within the period of performance, however, the controls over timely reconciliation and recording the inventory distributions did not occur in the appropriate reporting period. Questioned Costs: There are no known or likely questioned costs. Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method. Cause: Delays in performing the reconciliation and timely recording of inventory distributions in certain CRS country offices were caused by personnel’s unfamiliarity with the use of the new Supply Chain Management system, a system used in inventory management. Effect: Failure to timely reconcile and record transactions in the correct accounting period results in incorrect SEFA reporting to the U.S. government. Repeat Finding: No. Recommendation: We recommend that management ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. In addition, management should conduct appropriate training to CRS country office personnel with the proper use of the Supply Chain Management system to ensure timely reconciliation and recording of inventory distributions. Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance the inventory reconciliation processes.
2024-002 Internal Controls over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Requirements (Significant Deficiency) Information on the Federal Program: U.S. Agency for International Development Assistance Listing Number: 98.001 Assistance Listing Name: USAID Foreign Assistance for Programs Overseas Grant Award Number(s): Direct Award Number Award Period 720BHA22GR00225 May 13, 2022 through May 10, 2024 720BHA22GR00127 April 15, 2022 through April 14, 2024 Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to 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 a framework such as the “Internal Control Integrated Framework”, issued by the COSO. In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), 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. A period of performance may contain one or more budget periods. Condition: During our testing of the activities allowed or unallowed and allowable costs/cost principles compliance requirements, we identified one disbursement sample out of a total of twenty-five disbursement samples tested wherein management charged the federal program on June 2024 when the transaction happened on December 2022. In particular, the inventory distribution in the amount of $4,258.53 that took place in December 2022 should have been recorded as an expense in fiscal year 2023 rather than in fiscal year 2024. In addition, during our testing of period of performance compliance requirements, we also noted another inventory distribution in the amount of $235.89 that took place on August 2023 but it was only recorded on June 2024. The expenditures are allowable and within the period of performance, however, the controls over timely reconciliation and recording the inventory distributions did not occur in the appropriate reporting period. Questioned Costs: There are no known or likely questioned costs. Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method. Cause: Delays in performing the reconciliation and timely recording of inventory distributions in certain CRS country offices were caused by personnel’s unfamiliarity with the use of the new Supply Chain Management system, a system used in inventory management. Effect: Failure to timely reconcile and record transactions in the correct accounting period results in incorrect SEFA reporting to the U.S. government. Repeat Finding: No. Recommendation: We recommend that management ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. In addition, management should conduct appropriate training to CRS country office personnel with the proper use of the Supply Chain Management system to ensure timely reconciliation and recording of inventory distributions. Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance the inventory reconciliation processes.
2024-003 Internal Controls over Compliance and Compliance with Period of Performance Requirement (Significant Deficiency) Information on the Federal Program: U.S. Department of Agriculture Assistance Listing Number: 10.612 Assistance Listing Name: USDA Local and Regional Food Aid Procurement Program Grant Award Number: Direct Award Number Award Period LRP-686-2019/015-00-A October 1, 2019 through September 30, 2024 Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to 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 a framework such as the “Internal Control Integrated Framework”, issued by the COSO. In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), 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. A period of performance may contain one or more budget periods. Condition: During our testing of the period of performance compliance requirements, we identified two disbursement samples for a total of $1,574.09 out of a total of twenty-five disbursement samples tested wherein management was unable to provide evidence that the expenditures charged to the program were valid and incurred within the appropriate period of performance. Management also subsequently concluded that these transactions should have been captured as inventory and not charged as expenditure to the federal program. Questioned Costs: $1,574.09 from our samples. Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method. The total amount of the twenty-five samples selected for testing was $62,914. Cause: CRS country office personnel did not adhere to CRS’s documented policies and procedures for ensuring only valid and allowable expenses are charged to the federal program within the appropriate period of performance. Effect: Without adequate internal controls in place to ensure costs are properly reviewed for allowability and appropriate period of performance, CRS could be noncompliant with the allowability and period of performance requirements and could request funds for costs that are unallowed. Repeat Finding: No. Recommendation: We recommend that management follow its own policies, procedures and controls to ensure that the inventory expenses charged to the federal program are allowable within the period of performance. Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance processes around inventory expense allowability.
Condition: During our audit, we noted the Agency incurred expenditures and charged a federal award outside the approved period of performance for the grant. Criteria: Under 2 CFR Part 200.309, non-federal entities may charge to the federal award only allowable costs incurred during the period of performance Costs incurred outside this period are not allowable unless prior written approval is obtained from the awarding agency. Cause: The Agency accrued an expenditure in its accounting system and did not verify that the expenditure was for a service date within the approved period of performance. Effect: The federal award was overbilled by $1,904. Recommendation:We recommend the Agency more carefully monitor expenditures incurred near grant end dates to ensure compliance with period of performance compliance requirements. Management Response: Management agrees with this finding and will more carefully monitor grant end dates to comply with period of performance compliance requirements.
Federal Program: AL 20.237 – High Priority Commercial Motor Vehicle Grant Program, Federal Motor Carrier Safety Administration (FMCSA) Cluster. Compliance Requirements: Period of Performance. Type of Finding: Material Noncompliance and Internal Control Over Noncompliance. Criteria: Per guidance provided by Section 7.5 of the Motor Carrier Safety Assistance Program – Grant Comprehensive Policy, 49 U.S. Code § 31104(f)(2), and 200 Code of Federal Regulations (“CFR”) Section 200.309, only allowable costs incurred during the period of performance specified in the Notice of Grant Award may be charged to the related federal award. Condition and Context: On September 30, 2023, IRP prepaid $174,465 for data repository hosting and maintenance services that were not incurred until the quarter ended December 31, 2023. IRP reported this expenditure in Reports SF-425 and requested its reimbursement on form SF-270, for the quarter ended September 30, 2023, and charged the amount to federal award FM-MP- 0580-21. As expenditure occurred during the fiscal year ending September 30, 2024, it should be charged to federal award FM-MHP-0762-23, which has a period of performance from September 1, 2023, to September 30, 2025 per review of the notice of grant award. Questioned Costs: $174,465. Cause: Management lacked the appropriate knowledge of the period of performance requirements specified by the federal awarding agency and Uniform Guidance. Effect or Potential Effect: This error resulted in a $174,465 charge to award FM-MP-0580-21 for services that were incurred outside of the period of performance. Recommendation: We recommend management implement pre-submission controls, such as requiring date validation for all expenses against the award's period of performance and providing training to educate staff on 2 CFR requirements and period-of-performance limitations. We understand management has alerted FMCSA to the error and intends to work with them to correct the reporting of these expenditures, upon submission to the Federal Audit Clearinghouse of the data collection form and single audit reporting package for the year ended September 30, 2024. Views of Responsible Officials: Management acknowledges the finding and concurs with the recommendation. Grant management procedures have been revised to verify that services are received and costs incurred within the authorized period of performance in accordance with 2 CFR § 200.403 before the costs are charged to a federal award. Staff involved in grant management will receive targeted training on 2 CFR requirements related to period-ofperformance compliance and allowable cost timing.
Criteria or specific requirement: Per the 2024 OMB Compliance Supplement, "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))." Allowable costs must meet the standards set forth in 2 CFR Part 200, Subpart E. Condition: Costs were booked to incorrect program codes, resulting in unsupported charges being booked to the federal program. Both payroll and non-payroll expenditures were charged to the Federal program prior to the period of performance start date. Questioned costs: Known $1,098 Context: In period of performance testing, the majority of samples tested for beginning period of performance (31/40 samples) related to June 2024 payroll. In all of these tested samples, time was booked to the Federal program prior to the program start date of June 20, 2024. Similarly, there was no adjustments for other charges that are normally booked for the full month at a time, including: per diems (2/40 samples) and fuel (1/40 samples). One additional error was related to time booked to the Federal program when no time was coded to that program during the pay period tested. The final error was related to February amortization that was not processed in time and therefore mistakenly booked to the program. In payroll testing, 2/40 samples tested were booked to a charge code that was not reflected in the supporting timesheets. The amounts booked incorrectly to the major program are considered unallowable costs. Cause: MTI payroll is run monthly. Time should not have been coded to the Federal program in question until the program start date of June 20, 2024, however as most programs begin on the first of the month (not mid-month) this was overlooked by the supervisors and finance team who are supposed to review timesheets and make correction to ensure allocations are booked to the correct programs for the correct dates. Additional errors due to human error. Effect: Costs incurred outside of the Federal program's period of performance and costs that are not supported by underlying documentation are not allowable under the program. The organization may be required to submit reimbursements for these amounts. Repeat Finding: No Recommendation: Management should review its existing control structure and ensure that there are adequate processes and controls to ensure only expenditures incurred during the period of performance are booked to Federal programs and that the correct program codes are charged, based on the underlying supporting documentation. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per the 2024 OMB Compliance Supplement, "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))." Allowable costs must meet the standards set forth in 2 CFR Part 200, Subpart E. Condition: Costs were booked to incorrect program codes, resulting in unsupported charges being booked to the federal program. Both payroll and non-payroll expenditures were charged to the Federal program prior to the period of performance start date. Questioned costs: Known $1,098 Context: In period of performance testing, the majority of samples tested for beginning period of performance (31/40 samples) related to June 2024 payroll. In all of these tested samples, time was booked to the Federal program prior to the program start date of June 20, 2024. Similarly, there was no adjustments for other charges that are normally booked for the full month at a time, including: per diems (2/40 samples) and fuel (1/40 samples). One additional error was related to time booked to the Federal program when no time was coded to that program during the pay period tested. The final error was related to February amortization that was not processed in time and therefore mistakenly booked to the program. In payroll testing, 2/40 samples tested were booked to a charge code that was not reflected in the supporting timesheets. The amounts booked incorrectly to the major program are considered unallowable costs. Cause: MTI payroll is run monthly. Time should not have been coded to the Federal program in question until the program start date of June 20, 2024, however as most programs begin on the first of the month (not mid-month) this was overlooked by the supervisors and finance team who are supposed to review timesheets and make correction to ensure allocations are booked to the correct programs for the correct dates. Additional errors due to human error. Effect: Costs incurred outside of the Federal program's period of performance and costs that are not supported by underlying documentation are not allowable under the program. The organization may be required to submit reimbursements for these amounts. Repeat Finding: No Recommendation: Management should review its existing control structure and ensure that there are adequate processes and controls to ensure only expenditures incurred during the period of performance are booked to Federal programs and that the correct program codes are charged, based on the underlying supporting documentation. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Per the 2024 OMB Compliance Supplement, "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))." Allowable costs must meet the standards set forth in 2 CFR Part 200, Subpart E. Condition: Costs were booked to incorrect program codes, resulting in unsupported charges being booked to the federal program. Both payroll and non-payroll expenditures were charged to the Federal program prior to the period of performance start date. Questioned costs: Known $1,098 Context: In period of performance testing, the majority of samples tested for beginning period of performance (31/40 samples) related to June 2024 payroll. In all of these tested samples, time was booked to the Federal program prior to the program start date of June 20, 2024. Similarly, there was no adjustments for other charges that are normally booked for the full month at a time, including: per diems (2/40 samples) and fuel (1/40 samples). One additional error was related to time booked to the Federal program when no time was coded to that program during the pay period tested. The final error was related to February amortization that was not processed in time and therefore mistakenly booked to the program. In payroll testing, 2/40 samples tested were booked to a charge code that was not reflected in the supporting timesheets. The amounts booked incorrectly to the major program are considered unallowable costs. Cause: MTI payroll is run monthly. Time should not have been coded to the Federal program in question until the program start date of June 20, 2024, however as most programs begin on the first of the month (not mid-month) this was overlooked by the supervisors and finance team who are supposed to review timesheets and make correction to ensure allocations are booked to the correct programs for the correct dates. Additional errors due to human error. Effect: Costs incurred outside of the Federal program's period of performance and costs that are not supported by underlying documentation are not allowable under the program. The organization may be required to submit reimbursements for these amounts. Repeat Finding: No Recommendation: Management should review its existing control structure and ensure that there are adequate processes and controls to ensure only expenditures incurred during the period of performance are booked to Federal programs and that the correct program codes are charged, based on the underlying supporting documentation. Views of responsible officials: There is no disagreement with the audit finding.
Department of Education, Passed through Minnesota Department of Education Federal Financial Assistance Listing 84.027/84.173 Special Education Cluster Period of Performance Significant Deficiency in Internal Control over Compliance Criteria: A good system of internal control includes an adequate system for ensuring all expenditures are properly recorded in the applicable federal grant period in accordance with 2 CFR 200.309. Condition: In our testing of period of performance, we noted one instance of a fiscal year 2023 expenditure recorded during fiscal year 2024 and therefore not allowable under the terms of the grant. Cause: Procedures are not in place to adequately identify period of performance requirements. Effect: A lack of internal controls over period of performance could result in recording expenditures in the improper grant period resulting in non-compliance with the provisions of applicable grant requirements. Questioned Costs: None reported. Context/Sampling: Nonstatistical sampling was used. Sample size was 40 of 255 transactions. and included $525,686 of $828,578 federal awards. Repeat Finding from Prior Year: No Recommendation: RAED should review internal control procedures to ensure federal expenditures are being properly recorded in appropriate grant periods. Views of Responsible Officials: There is no disagreement with the audit finding.
Department of Education, Passed through Minnesota Department of Education Federal Financial Assistance Listing 84.027/84.173 Special Education Cluster Period of Performance Significant Deficiency in Internal Control over Compliance Criteria: A good system of internal control includes an adequate system for ensuring all expenditures are properly recorded in the applicable federal grant period in accordance with 2 CFR 200.309. Condition: In our testing of period of performance, we noted one instance of a fiscal year 2023 expenditure recorded during fiscal year 2024 and therefore not allowable under the terms of the grant. Cause: Procedures are not in place to adequately identify period of performance requirements. Effect: A lack of internal controls over period of performance could result in recording expenditures in the improper grant period resulting in non-compliance with the provisions of applicable grant requirements. Questioned Costs: None reported. Context/Sampling: Nonstatistical sampling was used. Sample size was 40 of 255 transactions. and included $525,686 of $828,578 federal awards. Repeat Finding from Prior Year: No Recommendation: RAED should review internal control procedures to ensure federal expenditures are being properly recorded in appropriate grant periods. Views of Responsible Officials: There is no disagreement with the audit finding.
Department of Education, Passed through Minnesota Department of Education Federal Financial Assistance Listing 84.027/84.173 Special Education Cluster Period of Performance Significant Deficiency in Internal Control over Compliance Criteria: A good system of internal control includes an adequate system for ensuring all expenditures are properly recorded in the applicable federal grant period in accordance with 2 CFR 200.309. Condition: In our testing of period of performance, we noted one instance of a fiscal year 2023 expenditure recorded during fiscal year 2024 and therefore not allowable under the terms of the grant. Cause: Procedures are not in place to adequately identify period of performance requirements. Effect: A lack of internal controls over period of performance could result in recording expenditures in the improper grant period resulting in non-compliance with the provisions of applicable grant requirements. Questioned Costs: None reported. Context/Sampling: Nonstatistical sampling was used. Sample size was 40 of 255 transactions. and included $525,686 of $828,578 federal awards. Repeat Finding from Prior Year: No Recommendation: RAED should review internal control procedures to ensure federal expenditures are being properly recorded in appropriate grant periods. Views of Responsible Officials: There is no disagreement with the audit finding.