2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.
Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.
Finding 2023-004 – Period of Performance Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CBB04278; 45CBB03514; 45CBB00648 Award Period: 07/01/2022 – 06/30/2023 Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $7,253 Context: Four (4) of the sixteen (16) transactions selected for testing. Cause: The Organization did not have a control in place to ensure the proper cut-off of expense charged to federal awards. Effect: The Organization allocated unallowable costs to the federal grant. Repeat Finding: No Recommendation: Management should review and revise its process for allocating costs to federal grants to include additional layers of review related to the cut-off of grant expenditures. Particular attention should be focused on the first and last month of the grant budget period. Views of responsible officials: There is no disagreement with the audit finding.
2023-006 Non-compliance with Compliance Requirements Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse and 93.788 Multiple Approach Response Strategies (MARS) Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: Per 2 CFR §200.305(b), non-Federal entities are responsible for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. According to 2 CFR §200.403, costs must meet the following general criteria to be allowable under Federal awards: (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award concerning types or amounts of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (g) Be adequately documented. See also 2 CFR §200.300 through 200.309 of this part. (h) Costs must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carryforward unobligated balances to subsequent budget periods pursuant to 2 CFR §200.308(e)(3). Condition: During the review of the schedule of expenditures of federal awards, the auditor noted the following conditions: 1. Non-Conforming Expenditures: An expenditure under the MARS Carry Over did not conform to the limitations set forth in the federal award budget. Specifically, $20,892 was charged for Garage Repairs, whereas the grant budget for equipment was only $1,200, designated specifically for two software purchases at $600 each. 2. Inadequate Documentation: a) The FASD Grant had a period that ended on March 14, 2023. Although the grant period was extended, this extension was not documented, b) A $26,383 FASD expenditure was reallocated to MARS 2.0 Carry Over without substantialjustification for the reclassification, and c) An adjustment of $24,044 was made from MARS 2.0 Carry Over FY 2022 without adequate supporting documentation. 3. Expenditures Outside the Approved Grant Period: a) the FASD total award of $340,000 was reported as fully expended in the 2023 fiscal year-end expenditure report (“Close-Out Report”) submitted to the Grants and Funding Management System on January 31, 2024. However, the Schedule of Federal Expenditure showed only $312,707 in expenditures. The remaining $27, 293 was indicated as a carryover for FY 2024. Of the $312,707 in expenditures, $71,277 were incurred after March 14, 2023, with only $21,395 falling within the 45-day closeout period following that date, b) $26,800 in unallowable costs were incurred under the MARS 2.0 Carry Over 45 days after the performance period ended on September 29, 2022, specifically for payroll processing, and c) $1,813 in costs were incurred before the performance period for the “Mars One-Pill Can Kill” grant dated February 1, 2023 to September 29, 2023. There was no prior grant. 4. Misclassification: $2,010 in MARS 3.0 expenditures were incorrectly classified under FASD. Cause of Condition: Insufficient understanding of program requirements. There is no formal monitoring of program expenditures on a periodic basis to ensure that the Organization’s expenditures and activities align with their grant budget and period of performance. Inconsistent adherence to record retention policies, resulting from the temporary hybrid working-from-home arrangements due to the pandemic, has led to insufficient support for all federal expenditures. The Organization lacks written policies and procedures for allocating expenditures across different programs. Effect: The current procedures for administering Federal funds are inadequately designed to ensure that costs and activities are managed in a manner consistent with the underlying agreements and the terms and conditions of the Federal award. These deficiencies could lead to misstatements in the SEFA that are not corrected promptly and could result in the charging of unallowable costs. Questioned Cost: $179,117 Recommendation: We recommend the following actions: 1. Training: Program administrators should receive adequatetraining and acquire knowledge of the compliancerequirements for each specific program to ensure adherence to these requirements. 2. Periodic Program Monitoring: The organization should establish a periodic review process for each program budget to ensure alignment with each line item in the budget. 3. Formal Procedures: The organization should document its procedures for expense allocation to ensure consistency timeliness, and accuracy. 4. Adequate Staffing: The organization should ensure that processes are staffed with knowledgeable personnel capableof reviewing and adhering to established policies and procedures. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.
Federal Agency: Department of Health and Human Services Federal Program Name: Child Care and Development Programs Assistance Listing Number: 93.575 Federal Award Identification Number and Year: 19-S225-00-2 – 2022 Pass-Through Agency: California Department of Education Pass-Through Number: 10163 Award Period: 7/1/2022-6/30/2023 Compliance Requirement Affected: H - period of availability/performance Type of Finding: Significant Deficiency Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: During test of non-payroll expenditures charged to the Child Care and Development Programs, one of the supporting documents indicated that costs in the amount of $1,625 charged to program was paid in the award period, but was incurred prior to the award period. Cause: The invoice was paid in the award year and internal controls over compliance failed to identify the ineligibility of the expense. Effect: $1,625 of ineligible expenses were charged to the federal program. Questioned Costs: $1,625 of known and likely cost. Repeat finding: Not a repeat finding. Recommendation: We recommend the Organization review its internal control processes over compliance to ensure adequate review of period of performance. Views of responsible officials and Corrective Action Plan: Background and Contributing Factors: At the time of the expenditure in question, our organization was relying on Charter Impact to manage our accounting and grant reporting. Unfortunately, Charter Impact did not fulfill its contractual obligations, including timely submission of grant reports and ensuring compliance with federal guidelines. Their failure to submit accurate and timely grant reports, contributed to the lapse in internal controls that led to the ineligible expense being charged to the federal program. 2023-002 Internal Control over Compliance (Continued) 500 Corrective Action Plan: 1. Implementation of Sage Accounting Software: We have since implemented a comprehensive financial accounting software system, Sage, which allows us to track expenditures more accurately and ensure compliance with federal grant requirements. The system includes built-in safeguards to flag non-compliant expenditures. 2. Review and Strengthening of Internal Controls: Life Source International Charter School will be implementing additional internal control systems & processes that include an additional review of back up documents before monthly reports are filed. A copy of all backup documents in support of all monthly reports will be kept at both Life Source International Charter School and the outside entities providing services and making reports on behalf of Life Source International Charter School. 3. Staff Training and Capacity Building: Our staff has received training on federal grant compliance, including the specific criteria governing the period of performance and allowable costs under federal awards. Additionally, with the Sage system in place, staff are now better equipped to manage compliance and reporting accurately. 4. Commitment to Ongoing Compliance: We are committed to continually improving our internal control processes to ensure compliance with all federal regulations. Findings and Questioned Costs – State Compliance There were no findings or questioned costs related to state awards for June 30, 2023.
DEPARTMENT OF REHABILITATION SERVICES PERIOD OF PERFORMANCE Significant Deficiency 2023-007 Strengthen Controls to Ensure Compliance with the Period of Performance for the Social Security Disability Insurance Program. ALN Number(s) 96.001 Social Security-Disability Insurance 96.006 Supplemental Security Income Federal Award No. 2104MSD100 2204MSD100 2304MSD100 Questioned Costs $13,517 Criteria Per the Code of Federal Regulations (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. Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: “Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition Program expenditures were not charged to the grant within the period of performance. We identified the following: • Two instances in which the expenditure was charged to the grant prior to the start of the grant, • Three instances in which the expenditure was charged after the grant’s end date. Cause The Department charging the grants outside of the period of performance was due to an error that was not identified during the review process. In addition, one expenditure supported costs for an annual agreement in which the service period started in one grant period and ended in another grant period. The Department elected to charge the costs to the grant starting after to expenditure incurred date, since most of the service would occur during that grant’s period. Effect The grantor may deem the costs charged outside of the period of performance as unallowable. Recommendation We recommend that the department enhance its internal controls to ensure all costs are incurred within the period of performance specified in the notice of award. Repeat Finding No. Statistically Valid No.
Finding 2023-004 – Period of Performance Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CBB04278; 45CBB03514; 45CBB00648 Award Period: 07/01/2022 – 06/30/2023 Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $7,253 Context: Four (4) of the sixteen (16) transactions selected for testing. Cause: The Organization did not have a control in place to ensure the proper cut-off of expense charged to federal awards. Effect: The Organization allocated unallowable costs to the federal grant. Repeat Finding: No Recommendation: Management should review and revise its process for allocating costs to federal grants to include additional layers of review related to the cut-off of grant expenditures. Particular attention should be focused on the first and last month of the grant budget period. Views of responsible officials: There is no disagreement with the audit finding.
Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - Illinois Department of Public Health (38080704K and 38080714K) & Illinois Department of Healthcare and Family Services (ARPA231010 and ARPA231002) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition - The Organization's controls did not identify expenses submitted to the State of Illinois, for reimbursement, were outside of the period of performance. Questioned Costs - $3,441,315 Identification of How Questioned Costs Were Computed - PM obtained the entire list of expenses submitted to the State of Illinois to assess the amount of questioned costs. The listing submitted to the State of Illinois was filtered to show the invoices that were outside of the period of performance. Context - In our testing of 40 allowability samples, we identified 12 invoices whereby the expense was incurred outside the period of performance, i.e., July 1, 2022 - June 30, 2023. As noted above, PM filtered the complete listing of expenses charged to the grant and discovered that $3,441,315 was charged to grant and outside of the period of performance. The questioned costs are included in the approximate $13.5M reported on the SEFA for the year ended June 30, 2023 under ALN 21.027. Cause and Effect - The lack of effective period of performance controls did not identify invoices that were outside the period of performance. The lack of controls resulted in a material amount of questioned costs and an opinion modification of 21.027, COVID 19 Coronavirus State and Local Fiscal Recovery Funds. Recommendation - As the grant period as ended for the grant, we recommend that the Organization work with the funding agency to remedy the noncompliance. In addition, we recommend that the Organization reassess its period of performance controls to identify where enhancements or additional controls are needed. Views of Responsible Officials and Corrective Action Plan - Background: Sinai began the process of risk assessment in the government grants area at the end of 2022. At that time, Sinai engaged outside counsel to assist in this process. In December of 2023, Sinai created the Office of Government Grant Administration (OGGA) and developed a comprehensive grant compliance policy and procedure. The Audit and Compliance Committee of the Board was updated on this initiative. In 2024, the OGGA created a Grant Compliance Manual which sets forth processes and procedures in grant management to ensure compliance with government regulations. Unfortunately, these controls were not implemented until after the relevant time period at issue in this audit. In 2025, Sinai is continuing to improve its compliance procedures with respect to government grants, and has developed the following plan: 1. Working Group: Sinai will implement a process of convening a Working Group for each government grant, which will consist of a representative from Finance, the OGGA, and the stakeholder involved (i.e., nursing, medicine, etc.) The Working group will be responsible for, among other things, ensuring that that the reported qualifying expenditures are incurred during the period of performance of the grant. In other words, allowable costs will be discussed early in the process, so that there is fulsome understanding among the key individuals involved. 2. Record-Keeping: The OGGA will also establish shared folders to house all of the pertinent documentation relative to the grant. 3. Invoice/Supporting Documentation Review. The Grant Accounting Manager will review all invoices and other supportive documentation to ensure that allowable costs are submitted for reimbursement. This compliance check will be completed prior to submission of the documentation for reimbursement. Monthly reviews of these activities will be performed by the Grant Accountant, the Compliance Grant Manager, and other OGGA staff as needed. Proactive review to prevent or resolve issues in the upcoming month’s billings should be pursued. 4. Annual Assessment. The Chief Compliance Officer, with the assistance of the General Counsel, will meet with the OGGA team annually to assess procedures and risk controls; a report of this assessment will be made to the Audit and Compliance Committee of the Board of Directors
Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - Illinois Department of Public Health (38080704K and 38080714K) & Illinois Department of Healthcare and Family Services (ARPA231010 and ARPA231002) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition - The Organization's controls did not identify expenses submitted to the State of Illinois, for reimbursement, were outside of the period of performance. Questioned Costs - $3,441,315 Identification of How Questioned Costs Were Computed - PM obtained the entire list of expenses submitted to the State of Illinois to assess the amount of questioned costs. The listing submitted to the State of Illinois was filtered to show the invoices that were outside of the period of performance. Context - In our testing of 40 allowability samples, we identified 12 invoices whereby the expense was incurred outside the period of performance, i.e., July 1, 2022 - June 30, 2023. As noted above, PM filtered the complete listing of expenses charged to the grant and discovered that $3,441,315 was charged to grant and outside of the period of performance. The questioned costs are included in the approximate $13.5M reported on the SEFA for the year ended June 30, 2023 under ALN 21.027. Cause and Effect - The lack of effective period of performance controls did not identify invoices that were outside the period of performance. The lack of controls resulted in a material amount of questioned costs and an opinion modification of 21.027, COVID 19 Coronavirus State and Local Fiscal Recovery Funds. Recommendation - As the grant period as ended for the grant, we recommend that the Organization work with the funding agency to remedy the noncompliance. In addition, we recommend that the Organization reassess its period of performance controls to identify where enhancements or additional controls are needed. Views of Responsible Officials and Corrective Action Plan - Background: Sinai began the process of risk assessment in the government grants area at the end of 2022. At that time, Sinai engaged outside counsel to assist in this process. In December of 2023, Sinai created the Office of Government Grant Administration (OGGA) and developed a comprehensive grant compliance policy and procedure. The Audit and Compliance Committee of the Board was updated on this initiative. In 2024, the OGGA created a Grant Compliance Manual which sets forth processes and procedures in grant management to ensure compliance with government regulations. Unfortunately, these controls were not implemented until after the relevant time period at issue in this audit. In 2025, Sinai is continuing to improve its compliance procedures with respect to government grants, and has developed the following plan: 1. Working Group: Sinai will implement a process of convening a Working Group for each government grant, which will consist of a representative from Finance, the OGGA, and the stakeholder involved (i.e., nursing, medicine, etc.) The Working group will be responsible for, among other things, ensuring that that the reported qualifying expenditures are incurred during the period of performance of the grant. In other words, allowable costs will be discussed early in the process, so that there is fulsome understanding among the key individuals involved. 2. Record-Keeping: The OGGA will also establish shared folders to house all of the pertinent documentation relative to the grant. 3. Invoice/Supporting Documentation Review. The Grant Accounting Manager will review all invoices and other supportive documentation to ensure that allowable costs are submitted for reimbursement. This compliance check will be completed prior to submission of the documentation for reimbursement. Monthly reviews of these activities will be performed by the Grant Accountant, the Compliance Grant Manager, and other OGGA staff as needed. Proactive review to prevent or resolve issues in the upcoming month’s billings should be pursued. 4. Annual Assessment. The Chief Compliance Officer, with the assistance of the General Counsel, will meet with the OGGA team annually to assess procedures and risk controls; a report of this assessment will be made to the Audit and Compliance Committee of the Board of Directors
Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - Illinois Department of Public Health (38080704K and 38080714K) & Illinois Department of Healthcare and Family Services (ARPA231010 and ARPA231002) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition - The Organization's controls did not identify expenses submitted to the State of Illinois, for reimbursement, were outside of the period of performance. Questioned Costs - $3,441,315 Identification of How Questioned Costs Were Computed - PM obtained the entire list of expenses submitted to the State of Illinois to assess the amount of questioned costs. The listing submitted to the State of Illinois was filtered to show the invoices that were outside of the period of performance. Context - In our testing of 40 allowability samples, we identified 12 invoices whereby the expense was incurred outside the period of performance, i.e., July 1, 2022 - June 30, 2023. As noted above, PM filtered the complete listing of expenses charged to the grant and discovered that $3,441,315 was charged to grant and outside of the period of performance. The questioned costs are included in the approximate $13.5M reported on the SEFA for the year ended June 30, 2023 under ALN 21.027. Cause and Effect - The lack of effective period of performance controls did not identify invoices that were outside the period of performance. The lack of controls resulted in a material amount of questioned costs and an opinion modification of 21.027, COVID 19 Coronavirus State and Local Fiscal Recovery Funds. Recommendation - As the grant period as ended for the grant, we recommend that the Organization work with the funding agency to remedy the noncompliance. In addition, we recommend that the Organization reassess its period of performance controls to identify where enhancements or additional controls are needed. Views of Responsible Officials and Corrective Action Plan - Background: Sinai began the process of risk assessment in the government grants area at the end of 2022. At that time, Sinai engaged outside counsel to assist in this process. In December of 2023, Sinai created the Office of Government Grant Administration (OGGA) and developed a comprehensive grant compliance policy and procedure. The Audit and Compliance Committee of the Board was updated on this initiative. In 2024, the OGGA created a Grant Compliance Manual which sets forth processes and procedures in grant management to ensure compliance with government regulations. Unfortunately, these controls were not implemented until after the relevant time period at issue in this audit. In 2025, Sinai is continuing to improve its compliance procedures with respect to government grants, and has developed the following plan: 1. Working Group: Sinai will implement a process of convening a Working Group for each government grant, which will consist of a representative from Finance, the OGGA, and the stakeholder involved (i.e., nursing, medicine, etc.) The Working group will be responsible for, among other things, ensuring that that the reported qualifying expenditures are incurred during the period of performance of the grant. In other words, allowable costs will be discussed early in the process, so that there is fulsome understanding among the key individuals involved. 2. Record-Keeping: The OGGA will also establish shared folders to house all of the pertinent documentation relative to the grant. 3. Invoice/Supporting Documentation Review. The Grant Accounting Manager will review all invoices and other supportive documentation to ensure that allowable costs are submitted for reimbursement. This compliance check will be completed prior to submission of the documentation for reimbursement. Monthly reviews of these activities will be performed by the Grant Accountant, the Compliance Grant Manager, and other OGGA staff as needed. Proactive review to prevent or resolve issues in the upcoming month’s billings should be pursued. 4. Annual Assessment. The Chief Compliance Officer, with the assistance of the General Counsel, will meet with the OGGA team annually to assess procedures and risk controls; a report of this assessment will be made to the Audit and Compliance Committee of the Board of Directors
Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - Illinois Department of Public Health (38080704K and 38080714K) & Illinois Department of Healthcare and Family Services (ARPA231010 and ARPA231002) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition - The Organization's controls did not identify expenses submitted to the State of Illinois, for reimbursement, were outside of the period of performance. Questioned Costs - $3,441,315 Identification of How Questioned Costs Were Computed - PM obtained the entire list of expenses submitted to the State of Illinois to assess the amount of questioned costs. The listing submitted to the State of Illinois was filtered to show the invoices that were outside of the period of performance. Context - In our testing of 40 allowability samples, we identified 12 invoices whereby the expense was incurred outside the period of performance, i.e., July 1, 2022 - June 30, 2023. As noted above, PM filtered the complete listing of expenses charged to the grant and discovered that $3,441,315 was charged to grant and outside of the period of performance. The questioned costs are included in the approximate $13.5M reported on the SEFA for the year ended June 30, 2023 under ALN 21.027. Cause and Effect - The lack of effective period of performance controls did not identify invoices that were outside the period of performance. The lack of controls resulted in a material amount of questioned costs and an opinion modification of 21.027, COVID 19 Coronavirus State and Local Fiscal Recovery Funds. Recommendation - As the grant period as ended for the grant, we recommend that the Organization work with the funding agency to remedy the noncompliance. In addition, we recommend that the Organization reassess its period of performance controls to identify where enhancements or additional controls are needed. Views of Responsible Officials and Corrective Action Plan - Background: Sinai began the process of risk assessment in the government grants area at the end of 2022. At that time, Sinai engaged outside counsel to assist in this process. In December of 2023, Sinai created the Office of Government Grant Administration (OGGA) and developed a comprehensive grant compliance policy and procedure. The Audit and Compliance Committee of the Board was updated on this initiative. In 2024, the OGGA created a Grant Compliance Manual which sets forth processes and procedures in grant management to ensure compliance with government regulations. Unfortunately, these controls were not implemented until after the relevant time period at issue in this audit. In 2025, Sinai is continuing to improve its compliance procedures with respect to government grants, and has developed the following plan: 1. Working Group: Sinai will implement a process of convening a Working Group for each government grant, which will consist of a representative from Finance, the OGGA, and the stakeholder involved (i.e., nursing, medicine, etc.) The Working group will be responsible for, among other things, ensuring that that the reported qualifying expenditures are incurred during the period of performance of the grant. In other words, allowable costs will be discussed early in the process, so that there is fulsome understanding among the key individuals involved. 2. Record-Keeping: The OGGA will also establish shared folders to house all of the pertinent documentation relative to the grant. 3. Invoice/Supporting Documentation Review. The Grant Accounting Manager will review all invoices and other supportive documentation to ensure that allowable costs are submitted for reimbursement. This compliance check will be completed prior to submission of the documentation for reimbursement. Monthly reviews of these activities will be performed by the Grant Accountant, the Compliance Grant Manager, and other OGGA staff as needed. Proactive review to prevent or resolve issues in the upcoming month’s billings should be pursued. 4. Annual Assessment. The Chief Compliance Officer, with the assistance of the General Counsel, will meet with the OGGA team annually to assess procedures and risk controls; a report of this assessment will be made to the Audit and Compliance Committee of the Board of Directors
Reference Number: 2023-019 Category of Finding: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency and Instance of Noncompliance State Administering Department: California Department of Social Services (CDSS) Assistance Listing Numbers: 96.001 Federal Program Title: Disability Insurance/SSI Cluster: Social Security Disability Insurance Federal Award Number and Year: 04-2204CADI00; 2022 Criteria Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget Guidance for Grants and Agreements. Chapter II – Office of Management and Budget Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D – Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget Guidance for Grants and Agreements. Chapter II – Office of Management and Budget Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart E – Cost Principles. §200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: (g) Be adequately documented. See §200.300 through §200.309. Condition The documentation for one of forty samples selected for testing did not agree to the payment disbursed to a provider for medical evidence of record (MER) services. The provider was overpaid by $5. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause CDSS has represented that the cause was an input error in the Midas subledger when processing the vendor payment. Effect CDSS did not have appropriate oversight controls to ensure that the data entry was accurate. Accordingly, there is an increased risk for data entry directly affecting the amount reported on the schedule of expenditures of federal awards to be inaccurate. Questioned Costs Questioned costs are projected to be $54,398. Context The total MER expenditures for the fiscal year ended June 30, 2023, were $4,432,781, which represents 1.8% of the total program expenditures of the Disability Insurance/SSI Cluster of $242,946,482. The sample was not a statistically valid sample. Recommendation CDSS should strengthen its controls over the review for accuracy of the provider invoice amounts input into Midas. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,631 items totaling $1,399,666 • ALN No. 93.788 – 1,728 items totaling $2,664,710 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 47 items totaling $48,756, including projected errors over the total population totaling $582,093 • ALN No. 93.788 - 7 items totaling $30,061, including projected errors over the total population totaling $138,133 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $48,756 • ALN No. 93.788 - $30,061 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Repeat finding (2022-003). Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,631 items totaling $1,399,666 • ALN No. 93.788 – 1,728 items totaling $2,664,710 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 47 items totaling $48,756, including projected errors over the total population totaling $582,093 • ALN No. 93.788 - 7 items totaling $30,061, including projected errors over the total population totaling $138,133 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $48,756 • ALN No. 93.788 - $30,061 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Repeat finding (2022-003). Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
FINDING REFERENCE NUMBER 2023-031 (See Finding Reference Number 2023-003) FEDERAL PROGRAM (ALN – 93.558) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 2021G996117; 2022G996117; 2023996117 (Federal Award Years: 2021 through 2023) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT ALLOWABLE COSTS/COSTS PRINCIPLES TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA Uniform Guidance at 2 CFR 200 Subpart E §200.403, Factor affecting allowability of costs, establishes that: “Except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient. (d) Be accorded consistent treatment. For example, a cost must not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing requirements of any other federally-financed program in either the current or a prior period. See § 200.306(b). (g) Be adequately documented. See §§ 200.300 through 200.309.” STATEMENT OF CONDITION As part of our audit procedures over allowable costs requirements for TANF program, we selected seven (7) voucher payments related to activities of prevention. We found the following deficiencies: (a) When we obtained the vouchers related to payments of a contractor, we also requested the contract and the proposal, we noted that the Entity is a subrecipient and not a contractor. The transactions related to this contract were not identified as subrecipient in the SEFA (see Finding Reference Number 2023-058). We audited three (3) vouchers of this subrecipient, in each one, this Entity claimed reimbursement for utilities, supplies, and materials. When we observed documentation in the file, we noted that the entity administers other Federal awards; and no evidence was observed in the voucher that proper distribution of administrative costs is made among all Federal awards. In addition, the contract required a certification indicating absence of duplication of services provided, and it was not included in the invoice or supporting documentation. (b) In the other four (4) vouchers evaluated related to payments to contractors, reimbursement claimed by the contractors included the purchase of laptops and digital screens. No evidence was provided that indicated who is responsible for this equipment, where it is located, and how it is safeguarded. These suppliers were contracted to provide training and workshops for participants of TANF. In the invoices evaluated we noted that ADSEF is paying for all costs of the entity, including supplies, maintenance of vehicles, mileage for some personnel, telephone charges, internet, and other utilities. In the final draft of the SEFA submitted for audit procedures, ADSEF reported the amount of $2,411,184, which included all transactions related to preventive services. QUESTIONED COSTS None. PERSPECTIVE INFORMATION This is a systemic deficiency. Total transactions related to prevention services were one-hundred seven (107), amounting to $2,411,184. ADSEF does not have internal guidance and procedures establishing how transactions with sub-recipients will be handled and how they are accounted for. Furthermore, there are no internal controls documenting the evaluation of the operational costs of suppliers contracted to provide a service, and their operational expenses must be covered by them and not claimed directly from the program. STATEMENT OF CAUSE ADSEF does not have a work plan and internal control guidance that clearly defines permissible activities and describes the activities that will be carried out to meet program requirements through the contracting of suppliers and sub-recipients. POSSIBLE ASSERTED EFFECT ADSEF may be incurring non-allowable costs by reimbursing expenses not properly stipulated in the allowable cost regulations for program administration. Furthermore, the expenses incurred by the sub-recipient are not identified in the database in a manner that allows them to be identified for the preparation of the SEFA. IDENTIFICATION OF REPEAT FINDING No reported as prior audit finding. RECOMMENDATIONS We recommend management to establish internal control processes consistent with the requirements of 2 CFR 200. In addition, design and implement internal control processes to meet the requirements of subrecipient monitoring and procurement standards.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: COVID-19 Vaccines Community-Based Education & Outreach (IVAX) Assistance Listing Number: 93.268 Pass-Through Entity: Illinois Primary Health Care Association Pass-Through Number: N/A Award Periods: July 1, 2022 – March 31, 2023 Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $4,279 Context: Four (4) of seven (7) transactions tested. Cause: Unknown Effect: Legacy may allocate unallowable costs to the federal grant. Repeat Finding: Yes. Prior Year Finding: 2022-004. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: COVID-19 Vaccines Community-Based Education & Outreach (IVAX) Assistance Listing Number: 93.268 Pass-Through Entity: Illinois Primary Health Care Association Pass-Through Number: N/A Award Periods: July 1, 2022 – March 31, 2023 Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $4,279 Context: Four (4) of seven (7) transactions tested. Cause: Unknown Effect: Legacy may allocate unallowable costs to the federal grant. Repeat Finding: Yes. Prior Year Finding: 2022-004. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
Sections 2 CFR 200.308, 200.309, and 200.403(h) state that 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. Recipients of State and Local Fiscal Recovery Funds (SLFRF) may only use funds to cover costs incurred during the period beginning on March 3, 2021 and ending on December 31, 2024 per section 602(g)(1) of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 and Treasury’s Interim Final Rule at 31 C.F.R. § 35.5(a). The County used SLFRF funds to reimburse expenditures that were incurred prior to March 3, 2021. The County identified replacement expenditures within the period of availability which were allowable. The County should implement the appropriate procedures to ensure that only allowable expenditures incurred within the period of performance are used for reimbursement with Federal funds.
Assistance Listing Number: 93.958 Name of Federal Program: Block Grants for Community Mental Health Services Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022 Criteria or Specific Requirement: 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: During our testing of reimbursement requests, we identified an invoice that included expenses outside the period of performance for a grant in the federal program. Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs included for reimbursement are within the period of performance. Effect or Potential Effect: An expense charged to the federal program could be disallowed. Questioned Costs: $48,728. Context: This appeared to be an isolated incident from one grant invoice that was tested during audit procedures performed on financial statement account balances. For testing period of performance requirements, we selected a sample of 20 expense transactions and did not identify any expenses charged to grants outside the period of performance. Repeat Finding: No Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred within the period of performance. Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure expenses submitted are within the grant performance period.
Assistance Listing Number: 93.958 Name of Federal Program: Block Grants for Community Mental Health Services Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022 Criteria or Specific Requirement: 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: During our testing of reimbursement requests, we identified an invoice that included expenses outside the period of performance for a grant in the federal program. Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs included for reimbursement are within the period of performance. Effect or Potential Effect: An expense charged to the federal program could be disallowed. Questioned Costs: $48,728. Context: This appeared to be an isolated incident from one grant invoice that was tested during audit procedures performed on financial statement account balances. For testing period of performance requirements, we selected a sample of 20 expense transactions and did not identify any expenses charged to grants outside the period of performance. Repeat Finding: No Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred within the period of performance. Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure expenses submitted are within the grant performance period.
Assistance Listing Number: 93.958 Name of Federal Program: Block Grants for Community Mental Health Services Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022 Criteria or Specific Requirement: 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: During our testing of reimbursement requests, we identified an invoice that included expenses outside the period of performance for a grant in the federal program. Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs included for reimbursement are within the period of performance. Effect or Potential Effect: An expense charged to the federal program could be disallowed. Questioned Costs: $48,728. Context: This appeared to be an isolated incident from one grant invoice that was tested during audit procedures performed on financial statement account balances. For testing period of performance requirements, we selected a sample of 20 expense transactions and did not identify any expenses charged to grants outside the period of performance. Repeat Finding: No Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred within the period of performance. Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure expenses submitted are within the grant performance period.
Finding #: 2022-003 Period of Performance – Noncompliance (not material to compliance requirement) Identification of Federal Program and Award Program title: U.S. Department of Health and Human Services (DHHS): Public Health Services Act, Title III, Section 330 (Health Center Cluster) CFDA #: 93.224/93.527 Award #: H8DCS36483 Program Year: 2022 Criteria Pursuant to 2 CFR sections 200.308, 200.309, and 200.403(h), a non-Federal entity may charge to the Federal award 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. Pursuant to 2 CFR section 200.305(b)(5), to the extent available, the non-Federal entity must disburse funds available from program income and interest earned on such funds before requesting additional cash payments. Condition During our testing of period of performance, we noted instances of noncompliance relating to the health center’s recognition of expenditures beyond the award’s period of performance. After inspection of invoices and canceled checks supporting disbursements tested, the auditor identified 3 out of 40 expenditures where costs were incurred after the period of performance end date. Upon further investigation, the auditor determined that $153,005 of the $433,455 amount reported as 2022 federal expenditures under award H8DCS36483 was incurred beyond the period of performance end date. Cause Health center personnel were not following financial expense allocation of revenue policies and procedures, which state that federal funds will be utilized according to regulations and what is established on the budget information form submitted with the grant application. Effect Possibility of interest payments due, and of draw down restriction being placed on Payment Management System (PMS) account or denial of future funding. Questioned Costs $153,005 Perspective Information We tested a statistically valid sample of 40 out of 250+ federal expenditures and determined that the audit finding represented a systemic problem. Repeat Finding This finding is not a repeated finding. Recommendation We recommend that management review financial expense allocation of revenue policies and closely monitor grant procedures in place to ensure CAMcare is in compliance with budget information stipulated in grant agreements. Views of Responsible Officials Management recognizes the noncompliance; on November 29, 2023, CAMcare’s CEO, Jillian Hudspeth, and CFO, Christopher Bernardi, agreed with this finding, and explained that the issue occurred during a time period when none of the current authorizing officials were employed by CAMcare.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: 558951 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: The Village allocated expenditures to programs during 2022 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 12 of the 60 samples selected for testing within Housing Opportunities for Persons with AIDS, did not have sufficient support for the allocation of the costs, or the costs themselves. Cause: The Village did not have policies and procedures in place to ensure that sufficient documentation was maintained to support the allocation of costs. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Known Questioned Costs Housing Opportunities for Persons with AIDS: $6,830 Likely Questioned Costs Housing Opportunities for Persons with AIDS: $234,595 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2022 were $1,173,061. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that sufficient documentation be maintained to support any allocations of costs as required by §200.403. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet and implementing new procedures to ensure accurate expenditure reporting.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: 558951 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: The Village allocated expenditures to programs during 2022 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 12 of the 60 samples selected for testing within Housing Opportunities for Persons with AIDS, did not have sufficient support for the allocation of the costs, or the costs themselves. Cause: The Village did not have policies and procedures in place to ensure that sufficient documentation was maintained to support the allocation of costs. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Known Questioned Costs Housing Opportunities for Persons with AIDS: $6,830 Likely Questioned Costs Housing Opportunities for Persons with AIDS: $234,595 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2022 were $1,173,061. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that sufficient documentation be maintained to support any allocations of costs as required by §200.403. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet and implementing new procedures to ensure accurate expenditure reporting.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. Condition: We identified two instances in which expenses charged to the grant were outside of the period of performance. Context: We selected 30 items from the entire Continuum of Care expenditure population for the year ended December 31, 2022. Of the 30 items selected for testing, two items were identified in which the underlying charge occurred prior to the period of performance. Effect: Amounts were inappropriately charged to the grant. Questioned costs: Amounts incorrectly charged to the grant totaled $32.27, less than the questioned costs threshold of $25,000. Cause: For one of the transactions that was identified that had been charged outside the period of performance, the employee responsible for entering the expense and determining whether it should be included or excluded from the grant reimbursement request was later placed on a performance improvement plan due to errors in data entry. For both transactions, as of December 31, 2022, the grant award had not been closed out, and therefore had not yet been subject to the Organization?s control to review expenses charged in detail and remove those outside of the period of performance. Repeat finding: No. Recommendation: We recommend more training be provided to employees responsible for reviewing grant expenses as well as over the various compliance requirements to ensure expenses are only charged when within the period of performance. We further recommend management tighten up the review process to ensure expenses that are outside the period of performance are noted at the time of the initial review. Views of responsible officials and planned corrective actions: Contracts charged for expenses outside of the period of performance have been credited for ineligible expenses. Share has provided additional training to accounting staff about the allowability of expenses being based on both contract criteria and the period of performance. Additionally, training was provided on key identifiers that could flag an exception in allowability based on period of performance, and how to catch this in the review of expenses. Additionally, training was provided on general ledgers transactions that require further review for period of performance allowability during monthly review of expenses prior to preparing invoices. Training included this being a specific area of focus for review during periods when a contract terms and a new contract starts. This training will be provided to all new accounting staff and will be incorporated as refresher trainings if upon review contract and grant administrator expense reviews identify this as being a continued issue by staff performing expense data entry.
2022-006: Period of Performance – Material Weakness – Originated in 2019 Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119-22-00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020-2024 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: The Organization lacked supporting documentation for certain non-payroll expenses and lacked evidence of review for certain non-payroll expenses. Due to lack of supporting documentation and evidence of approval for payment, certain transactions could not be verified. Of the sixty (60) transactions examined, eight (8) lacked supporting documentation and twenty five (25) lacked evidence of review, and approval for payment. Effect: Management possibly did not expend funds in accordance with the approved detailed line-item budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned Costs: Known questioned costs of $980 and likely questioned costs of $5,791 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
2022-006: Period of Performance – Material Weakness – Originated in 2019 Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119-22-00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2020-2024 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: The Organization lacked supporting documentation for certain non-payroll expenses and lacked evidence of review for certain non-payroll expenses. Due to lack of supporting documentation and evidence of approval for payment, certain transactions could not be verified. Of the sixty (60) transactions examined, eight (8) lacked supporting documentation and twenty five (25) lacked evidence of review, and approval for payment. Effect: Management possibly did not expend funds in accordance with the approved detailed line-item budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned Costs: Known questioned costs of $980 and likely questioned costs of $5,791 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
Formerly 2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for six items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenditures where no documentation could be provided to support that the expense was incurred during the grant period resulting in a questioned cost of $2,699 for 14.267. Cause: The Organization did not have good controls on ensuring the period of performance requirement was met due to staff turn over and being unable to locate documentation. Effect: The Organization could have grant expenditures outside the grant period. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement have not been developed to ensure the reported information is accurate. Repeat: This is a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
Formerly 2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for six items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenditures where no documentation could be provided to support that the expense was incurred during the grant period resulting in a questioned cost of $2,699 for 14.267. Cause: The Organization did not have good controls on ensuring the period of performance requirement was met due to staff turn over and being unable to locate documentation. Effect: The Organization could have grant expenditures outside the grant period. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement have not been developed to ensure the reported information is accurate. Repeat: This is a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
Formerly 2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for six items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenditures where no documentation could be provided to support that the expense was incurred during the grant period resulting in a questioned cost of $2,699 for 14.267. Cause: The Organization did not have good controls on ensuring the period of performance requirement was met due to staff turn over and being unable to locate documentation. Effect: The Organization could have grant expenditures outside the grant period. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement have not been developed to ensure the reported information is accurate. Repeat: This is a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
Formerly 2021-003: Period of Performance: Federal Program: Assistance Listing Nos.: 14.267 Continuum of Care Program Condition: The organization was unable to demonstrate controls over the period of performance for six items selected for testing. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs: There were six expenditures where no documentation could be provided to support that the expense was incurred during the grant period resulting in a questioned cost of $2,699 for 14.267. Cause: The Organization did not have good controls on ensuring the period of performance requirement was met due to staff turn over and being unable to locate documentation. Effect: The Organization could have grant expenditures outside the grant period. Recommendation: In order to prevent future occurrences of this deficiency, we recommend that management enhance a set of controls to ensure that they are able to demonstrate the period of performance. Perspective: This is a systemic issue in that controls over the requirement have not been developed to ensure the reported information is accurate. Repeat: This is a repeat finding. Responsible Official’s View: The Organization agrees with the finding. See attached corrective action plan.
Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). g) Be adequately documented. See also §200.300 through §200.309. h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: National CASA/GAL allocated expenditures to programs during 2022 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding salaries, see finding 2022-003), we noted in accordance with §200.403(g) that: For Court Appointed Special Advocates: • One of 60 transactions was partially charged in the incorrect fiscal period. • One of 60 transactions underlying supporting documentation was not retained. • 19 of 60 transactions had inconsistent allocation methods (based on an estimated metric such as estimated time on program or square feet space utilized) applied to costs. • 21 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. For the Juvenile Mentoring Program: • One of 60 transactions lacked documentation of all required reviews and approvals. • One of 60 transactions the incorrect allocation rate was utilized. • One of 60 transactions underlying supporting documentation was not retained. • 27 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. Cause: National CASA/GAL did not have procedures in place to document, and maintain the documentation of, the review and approval of the allocation methodology and the allocation of costs (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, National CASA/GAL could incorrectly charge expenditures to the federal programs. Questioned Costs Court Appointed Special Advocates: Below reporting threshold. Questioned Costs Juvenile Mentoring Program: Below reporting threshold. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Court Appointed Special Advocates in 2022 were $6,500,295. The sample tested consisted of 60 transactions totaling $165,919. Nonpayroll costs for the Juvenile Mentoring Program in 2022 were $2,401,373. The sample tested consisted of 60 transactions totaling $151,177. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. For Court Appointed Special Advocates, four transactions resulted in questioned costs of $3,139. For the Juvenile Mentoring Program, two transactions resulted in questioned costs of $456. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that policies and procedures be updated to ensure underlying support, as well as support for allocations is appropriately maintained as required by §200.403. Views of Responsible Officials: Management concurs with the finding that procedures should specify that documentation of review and approval of both the costs charged and the allocation method of costs charged to federal grants be maintained. Management put policies in place to capture the documentation and maintenance of documentation indicating supervisor review and approval.
Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). g) Be adequately documented. See also §200.300 through §200.309. h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: National CASA/GAL allocated expenditures to programs during 2022 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding salaries, see finding 2022-003), we noted in accordance with §200.403(g) that: For Court Appointed Special Advocates: • One of 60 transactions was partially charged in the incorrect fiscal period. • One of 60 transactions underlying supporting documentation was not retained. • 19 of 60 transactions had inconsistent allocation methods (based on an estimated metric such as estimated time on program or square feet space utilized) applied to costs. • 21 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. For the Juvenile Mentoring Program: • One of 60 transactions lacked documentation of all required reviews and approvals. • One of 60 transactions the incorrect allocation rate was utilized. • One of 60 transactions underlying supporting documentation was not retained. • 27 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. Cause: National CASA/GAL did not have procedures in place to document, and maintain the documentation of, the review and approval of the allocation methodology and the allocation of costs (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, National CASA/GAL could incorrectly charge expenditures to the federal programs. Questioned Costs Court Appointed Special Advocates: Below reporting threshold. Questioned Costs Juvenile Mentoring Program: Below reporting threshold. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Court Appointed Special Advocates in 2022 were $6,500,295. The sample tested consisted of 60 transactions totaling $165,919. Nonpayroll costs for the Juvenile Mentoring Program in 2022 were $2,401,373. The sample tested consisted of 60 transactions totaling $151,177. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. For Court Appointed Special Advocates, four transactions resulted in questioned costs of $3,139. For the Juvenile Mentoring Program, two transactions resulted in questioned costs of $456. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that policies and procedures be updated to ensure underlying support, as well as support for allocations is appropriately maintained as required by §200.403. Views of Responsible Officials: Management concurs with the finding that procedures should specify that documentation of review and approval of both the costs charged and the allocation method of costs charged to federal grants be maintained. Management put policies in place to capture the documentation and maintenance of documentation indicating supervisor review and approval.
Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). g) Be adequately documented. See also §200.300 through §200.309. h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: National CASA/GAL allocated expenditures to programs during 2022 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding salaries, see finding 2022-003), we noted in accordance with §200.403(g) that: For Court Appointed Special Advocates: • One of 60 transactions was partially charged in the incorrect fiscal period. • One of 60 transactions underlying supporting documentation was not retained. • 19 of 60 transactions had inconsistent allocation methods (based on an estimated metric such as estimated time on program or square feet space utilized) applied to costs. • 21 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. For the Juvenile Mentoring Program: • One of 60 transactions lacked documentation of all required reviews and approvals. • One of 60 transactions the incorrect allocation rate was utilized. • One of 60 transactions underlying supporting documentation was not retained. • 27 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. Cause: National CASA/GAL did not have procedures in place to document, and maintain the documentation of, the review and approval of the allocation methodology and the allocation of costs (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, National CASA/GAL could incorrectly charge expenditures to the federal programs. Questioned Costs Court Appointed Special Advocates: Below reporting threshold. Questioned Costs Juvenile Mentoring Program: Below reporting threshold. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Court Appointed Special Advocates in 2022 were $6,500,295. The sample tested consisted of 60 transactions totaling $165,919. Nonpayroll costs for the Juvenile Mentoring Program in 2022 were $2,401,373. The sample tested consisted of 60 transactions totaling $151,177. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. For Court Appointed Special Advocates, four transactions resulted in questioned costs of $3,139. For the Juvenile Mentoring Program, two transactions resulted in questioned costs of $456. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that policies and procedures be updated to ensure underlying support, as well as support for allocations is appropriately maintained as required by §200.403. Views of Responsible Officials: Management concurs with the finding that procedures should specify that documentation of review and approval of both the costs charged and the allocation method of costs charged to federal grants be maintained. Management put policies in place to capture the documentation and maintenance of documentation indicating supervisor review and approval.
Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). g) Be adequately documented. See also §200.300 through §200.309. h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: National CASA/GAL allocated expenditures to programs during 2022 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding salaries, see finding 2022-003), we noted in accordance with §200.403(g) that: For Court Appointed Special Advocates: • One of 60 transactions was partially charged in the incorrect fiscal period. • One of 60 transactions underlying supporting documentation was not retained. • 19 of 60 transactions had inconsistent allocation methods (based on an estimated metric such as estimated time on program or square feet space utilized) applied to costs. • 21 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. For the Juvenile Mentoring Program: • One of 60 transactions lacked documentation of all required reviews and approvals. • One of 60 transactions the incorrect allocation rate was utilized. • One of 60 transactions underlying supporting documentation was not retained. • 27 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. Cause: National CASA/GAL did not have procedures in place to document, and maintain the documentation of, the review and approval of the allocation methodology and the allocation of costs (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, National CASA/GAL could incorrectly charge expenditures to the federal programs. Questioned Costs Court Appointed Special Advocates: Below reporting threshold. Questioned Costs Juvenile Mentoring Program: Below reporting threshold. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Court Appointed Special Advocates in 2022 were $6,500,295. The sample tested consisted of 60 transactions totaling $165,919. Nonpayroll costs for the Juvenile Mentoring Program in 2022 were $2,401,373. The sample tested consisted of 60 transactions totaling $151,177. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. For Court Appointed Special Advocates, four transactions resulted in questioned costs of $3,139. For the Juvenile Mentoring Program, two transactions resulted in questioned costs of $456. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that policies and procedures be updated to ensure underlying support, as well as support for allocations is appropriately maintained as required by §200.403. Views of Responsible Officials: Management concurs with the finding that procedures should specify that documentation of review and approval of both the costs charged and the allocation method of costs charged to federal grants be maintained. Management put policies in place to capture the documentation and maintenance of documentation indicating supervisor review and approval.
Sections 2 CFR 200.308, 200.309, and 200.403(h) state that 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. Recipients of State and Local Fiscal Recovery Funds (SLFRF) may only use funds to cover costs incurred during the period beginning on March 3, 2021 and ending on December 31, 2024 per section 602(g)(1) of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 and Treasury’s Interim Final Rule at 31 C.F.R. § 35.5(a). The County used SLFRF funds to reimburse expenditures that were incurred prior to March 3, 2021. The County identified replacement expenditures within the period of availability which were allowable. The County should implement the appropriate procedures to ensure that only allowable expenditures incurred within the period of performance are used for reimbursement with Federal funds.
Assistance Listing Number: 93.958 Name of Federal Program: Block Grants for Community Mental Health Services Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022 Criteria or Specific Requirement: 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: During our testing of reimbursement requests, we identified an invoice that included expenses outside the period of performance for a grant in the federal program. Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs included for reimbursement are within the period of performance. Effect or Potential Effect: An expense charged to the federal program could be disallowed. Questioned Costs: $48,728. Context: This appeared to be an isolated incident from one grant invoice that was tested during audit procedures performed on financial statement account balances. For testing period of performance requirements, we selected a sample of 20 expense transactions and did not identify any expenses charged to grants outside the period of performance. Repeat Finding: No Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred within the period of performance. Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure expenses submitted are within the grant performance period.
Assistance Listing Number: 93.958 Name of Federal Program: Block Grants for Community Mental Health Services Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022 Criteria or Specific Requirement: 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: During our testing of reimbursement requests, we identified an invoice that included expenses outside the period of performance for a grant in the federal program. Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs included for reimbursement are within the period of performance. Effect or Potential Effect: An expense charged to the federal program could be disallowed. Questioned Costs: $48,728. Context: This appeared to be an isolated incident from one grant invoice that was tested during audit procedures performed on financial statement account balances. For testing period of performance requirements, we selected a sample of 20 expense transactions and did not identify any expenses charged to grants outside the period of performance. Repeat Finding: No Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred within the period of performance. Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure expenses submitted are within the grant performance period.
Assistance Listing Number: 93.958 Name of Federal Program: Block Grants for Community Mental Health Services Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022 Criteria or Specific Requirement: 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: During our testing of reimbursement requests, we identified an invoice that included expenses outside the period of performance for a grant in the federal program. Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs included for reimbursement are within the period of performance. Effect or Potential Effect: An expense charged to the federal program could be disallowed. Questioned Costs: $48,728. Context: This appeared to be an isolated incident from one grant invoice that was tested during audit procedures performed on financial statement account balances. For testing period of performance requirements, we selected a sample of 20 expense transactions and did not identify any expenses charged to grants outside the period of performance. Repeat Finding: No Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred within the period of performance. Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure expenses submitted are within the grant performance period.
Finding #: 2022-003 Period of Performance – Noncompliance (not material to compliance requirement) Identification of Federal Program and Award Program title: U.S. Department of Health and Human Services (DHHS): Public Health Services Act, Title III, Section 330 (Health Center Cluster) CFDA #: 93.224/93.527 Award #: H8DCS36483 Program Year: 2022 Criteria Pursuant to 2 CFR sections 200.308, 200.309, and 200.403(h), a non-Federal entity may charge to the Federal award 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. Pursuant to 2 CFR section 200.305(b)(5), to the extent available, the non-Federal entity must disburse funds available from program income and interest earned on such funds before requesting additional cash payments. Condition During our testing of period of performance, we noted instances of noncompliance relating to the health center’s recognition of expenditures beyond the award’s period of performance. After inspection of invoices and canceled checks supporting disbursements tested, the auditor identified 3 out of 40 expenditures where costs were incurred after the period of performance end date. Upon further investigation, the auditor determined that $153,005 of the $433,455 amount reported as 2022 federal expenditures under award H8DCS36483 was incurred beyond the period of performance end date. Cause Health center personnel were not following financial expense allocation of revenue policies and procedures, which state that federal funds will be utilized according to regulations and what is established on the budget information form submitted with the grant application. Effect Possibility of interest payments due, and of draw down restriction being placed on Payment Management System (PMS) account or denial of future funding. Questioned Costs $153,005 Perspective Information We tested a statistically valid sample of 40 out of 250+ federal expenditures and determined that the audit finding represented a systemic problem. Repeat Finding This finding is not a repeated finding. Recommendation We recommend that management review financial expense allocation of revenue policies and closely monitor grant procedures in place to ensure CAMcare is in compliance with budget information stipulated in grant agreements. Views of Responsible Officials Management recognizes the noncompliance; on November 29, 2023, CAMcare’s CEO, Jillian Hudspeth, and CFO, Christopher Bernardi, agreed with this finding, and explained that the issue occurred during a time period when none of the current authorizing officials were employed by CAMcare.