Finding 2023-003: Period of Performance Federal Program: ALN 19.701 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR Part 200, Uniform Guidance, §200.309 - Period of Performance, Federal awards must comply with the specified period of performance outlined in the award documentation. The period of performance defines the timeframe during which the recipient may incur costs and complete the project or program objectives. Condition: During the audit period, the Global Center had two active awards serving nearly identical purposes. The first award concluded in September 2023, at which point the follow-on award commenced. In July 2023, the Global Center incurred an expense, believing it could be charged to the follow-on award. The Global Center requested authorization from the donor to charge the cost to the award, even though it was incurred prior to the commencement of the period of performance. While awaiting confirmation from the donor, the Global Center went ahead and billed the expense to the award. The donor, however, took nearly a year to respond and ultimately ruled the cost unallowable. The Global Center subsequently reclassified the cost out of the award. Cause: Administrative delays and miscommunication with the donor. Effect or Potential Effect: As a result of initially recording an expense incurred prior to the commencement of the period of performance before it had specific authorization to do so, the Global Center inadvertently drew down funds for this unapproved cost. Questioned Costs: None noted Context: By recording the expense before receiving donor confirmation, the Global Center risks incurring and claiming costs outside of the allowable period for reimbursement. Identification as a Repeat Finding: Not applicable Recommendation: The Global Center should refrain from recording any expenses outside the period of performance until written approval is received from the donor, ensuring compliance with award guidelines.
Finding 2023-003: Period of Performance Federal Program: ALN 19.701 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR Part 200, Uniform Guidance, §200.309 - Period of Performance, Federal awards must comply with the specified period of performance outlined in the award documentation. The period of performance defines the timeframe during which the recipient may incur costs and complete the project or program objectives. Condition: During the audit period, the Global Center had two active awards serving nearly identical purposes. The first award concluded in September 2023, at which point the follow-on award commenced. In July 2023, the Global Center incurred an expense, believing it could be charged to the follow-on award. The Global Center requested authorization from the donor to charge the cost to the award, even though it was incurred prior to the commencement of the period of performance. While awaiting confirmation from the donor, the Global Center went ahead and billed the expense to the award. The donor, however, took nearly a year to respond and ultimately ruled the cost unallowable. The Global Center subsequently reclassified the cost out of the award. Cause: Administrative delays and miscommunication with the donor. Effect or Potential Effect: As a result of initially recording an expense incurred prior to the commencement of the period of performance before it had specific authorization to do so, the Global Center inadvertently drew down funds for this unapproved cost. Questioned Costs: None noted Context: By recording the expense before receiving donor confirmation, the Global Center risks incurring and claiming costs outside of the allowable period for reimbursement. Identification as a Repeat Finding: Not applicable Recommendation: The Global Center should refrain from recording any expenses outside the period of performance until written approval is received from the donor, ensuring compliance with award guidelines.
Finding 2023-003: Period of Performance Federal Program: ALN 19.701 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR Part 200, Uniform Guidance, §200.309 - Period of Performance, Federal awards must comply with the specified period of performance outlined in the award documentation. The period of performance defines the timeframe during which the recipient may incur costs and complete the project or program objectives. Condition: During the audit period, the Global Center had two active awards serving nearly identical purposes. The first award concluded in September 2023, at which point the follow-on award commenced. In July 2023, the Global Center incurred an expense, believing it could be charged to the follow-on award. The Global Center requested authorization from the donor to charge the cost to the award, even though it was incurred prior to the commencement of the period of performance. While awaiting confirmation from the donor, the Global Center went ahead and billed the expense to the award. The donor, however, took nearly a year to respond and ultimately ruled the cost unallowable. The Global Center subsequently reclassified the cost out of the award. Cause: Administrative delays and miscommunication with the donor. Effect or Potential Effect: As a result of initially recording an expense incurred prior to the commencement of the period of performance before it had specific authorization to do so, the Global Center inadvertently drew down funds for this unapproved cost. Questioned Costs: None noted Context: By recording the expense before receiving donor confirmation, the Global Center risks incurring and claiming costs outside of the allowable period for reimbursement. Identification as a Repeat Finding: Not applicable Recommendation: The Global Center should refrain from recording any expenses outside the period of performance until written approval is received from the donor, ensuring compliance with award guidelines.
Finding 2023-003: Period of Performance Federal Program: ALN 19.701 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR Part 200, Uniform Guidance, §200.309 - Period of Performance, Federal awards must comply with the specified period of performance outlined in the award documentation. The period of performance defines the timeframe during which the recipient may incur costs and complete the project or program objectives. Condition: During the audit period, the Global Center had two active awards serving nearly identical purposes. The first award concluded in September 2023, at which point the follow-on award commenced. In July 2023, the Global Center incurred an expense, believing it could be charged to the follow-on award. The Global Center requested authorization from the donor to charge the cost to the award, even though it was incurred prior to the commencement of the period of performance. While awaiting confirmation from the donor, the Global Center went ahead and billed the expense to the award. The donor, however, took nearly a year to respond and ultimately ruled the cost unallowable. The Global Center subsequently reclassified the cost out of the award. Cause: Administrative delays and miscommunication with the donor. Effect or Potential Effect: As a result of initially recording an expense incurred prior to the commencement of the period of performance before it had specific authorization to do so, the Global Center inadvertently drew down funds for this unapproved cost. Questioned Costs: None noted Context: By recording the expense before receiving donor confirmation, the Global Center risks incurring and claiming costs outside of the allowable period for reimbursement. Identification as a Repeat Finding: Not applicable Recommendation: The Global Center should refrain from recording any expenses outside the period of performance until written approval is received from the donor, ensuring compliance with award guidelines.
Finding 2023-002 Significant deficiency in internal controls over compliance related to period of performance. Federal Agency: Department of Health and Human Services Program Title: Unaccompanied Alien Children Program Assistance Listing Number: 93.676 Award Numbers: 90ZU0339/03 and 90ZU0587/01 Project Period: February 1, 2022 - October 31, 2023 and November 1, 2023 - October 31, 2024 Criteria A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. Any costs incurred before the federal awarding agency or pass-through entity made the federal award, must be authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition/Context for Evaluation During the audit for the year ending December 31, 2023, we noted four instances out of 40 where the Organization charged costs to the grant that were outside of the period of performance for the related award. Questioned Costs 90ZU0339/03 - $995 90ZU0587/01 - $408 Cause The Organization’s internal controls were not sufficient to ensure proper cutoff of grant expenditures and the allocation to the related award. Effect or Potential Effect Unallowable costs were charged to the grant. Repeat Finding Not Applicable. Recommendation We recommend that management develop internal controls for appropriate cutoff of grant expenditures and review to ensure the appropriate costs were charged to the budgeted period to the grant. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.
Finding 2023-002 Significant deficiency in internal controls over compliance related to period of performance. Federal Agency: Department of Health and Human Services Program Title: Unaccompanied Alien Children Program Assistance Listing Number: 93.676 Award Numbers: 90ZU0339/03 and 90ZU0587/01 Project Period: February 1, 2022 - October 31, 2023 and November 1, 2023 - October 31, 2024 Criteria A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. Any costs incurred before the federal awarding agency or pass-through entity made the federal award, must be authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition/Context for Evaluation During the audit for the year ending December 31, 2023, we noted four instances out of 40 where the Organization charged costs to the grant that were outside of the period of performance for the related award. Questioned Costs 90ZU0339/03 - $995 90ZU0587/01 - $408 Cause The Organization’s internal controls were not sufficient to ensure proper cutoff of grant expenditures and the allocation to the related award. Effect or Potential Effect Unallowable costs were charged to the grant. Repeat Finding Not Applicable. Recommendation We recommend that management develop internal controls for appropriate cutoff of grant expenditures and review to ensure the appropriate costs were charged to the budgeted period to the grant. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.
2 CFR § 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR § 200.303(a) which requires that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR § 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR § 200.403 which states except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). State ex rel. McClure v. Hagerman, 155 Ohio St. 320 (1951) provides that expenditures made by a governmental unit should serve a public purpose. Typically, the determination of what constitutes a “proper public purpose” rests with the judgment of the governmental entity, unless such determination is arbitrary or unreasonable. Even if a purchase is reasonable, Ohio Attorney General Opinion 82-006 indicates that it must be memorialized by a duly enacted ordinance or resolution and may have a prospective effect only. Auditor of State Bulletin 2003-005 Expenditure of Public Funds/Proper “Public Purpose” states, in part, the Auditor of State’s Office will only question expenditures where the legislative determination of a public purpose is manifestly arbitrary and incorrect. The Lima-Allen County Regional Planning Commission, administrator of the Community Housing Impact and Preservation Program - CHIP (#B-C-21-1AB-1) for Allen County, incurred a charge of $4,386 for Admin January 2023 charges on invoice #106558 dated February 7, 2023 from the Great Lakes Community Action Partnership. On July 6, 2023, check number 7330652 was issued by Allen County which included payment of $4,386 on invoice number 106558. On August 3, 2023, check number 7332670 was issued by Allen County which included payment of $4,386 on invoice number 106558 which was approved by Tara Bales, Executive Director of the Lima-Allen County Regional Planning Commission. As a result, possibly due to the failure of an existing control or procedure, invoice number 106558 was paid twice resulting an overpayment of $4,386. On October 2, 2024, the Great Lakes Community Action Partnership refunded the overpayment with check number 20765 in the amount of $4,386. This refund was recorded in the Community Development Grant Fund (2414). The Lima-Allen County Regional Planning Commission should implement an additional control(s) and/or procedure(s) to prevent the duplicate payment of invoices.
2023-014 Period of Performance Assistance Listing No.: 14.267 Continuum of Care Program Condition: The Organization was unable to demonstrate consistent controls over the period of performance requirement. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs There are no questioned costs. Cause: The Organization did not have good controls on ensuring the period of performance requirement was met due to staff turn over. Effect: The Organization could have grant expenditures outside the grant period. Perspective: Thirty-one of forty items selected for testing did not have documentation of the control over compliance with the period of performance requirement. Repeat Finding: This is a repeat finding. See finding 2022-017. Recommendation: In order to prevent future occurences of this deficiency, we recommend that management expand controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Auditee's Response: The Organization agrees with the finding. See attached corrective action plan.
2023-014 Period of Performance Assistance Listing No.: 14.267 Continuum of Care Program Condition: The Organization was unable to demonstrate consistent controls over the period of performance requirement. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs There are no questioned costs. Cause: The Organization did not have good controls on ensuring the period of performance requirement was met due to staff turn over. Effect: The Organization could have grant expenditures outside the grant period. Perspective: Thirty-one of forty items selected for testing did not have documentation of the control over compliance with the period of performance requirement. Repeat Finding: This is a repeat finding. See finding 2022-017. Recommendation: In order to prevent future occurences of this deficiency, we recommend that management expand controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Auditee's Response: The Organization agrees with the finding. See attached corrective action plan.
2023-014 Period of Performance Assistance Listing No.: 14.267 Continuum of Care Program Condition: The Organization was unable to demonstrate consistent controls over the period of performance requirement. Criteria: The requirements for the period of performance are contained in 2 CFR section 200.1 Definitions for “budget period,” “financial obligations,” “period of performance,” 2 CFR section 200.308 (revision of budget and program plans), 2 CFR section 200.309 (modifications to period of performance), 2 CFR section 200.344 (closeout), program legislation, federal awarding agency regulations; and the terms and conditions of the award. Questioned Costs There are no questioned costs. Cause: The Organization did not have good controls on ensuring the period of performance requirement was met due to staff turn over. Effect: The Organization could have grant expenditures outside the grant period. Perspective: Thirty-one of forty items selected for testing did not have documentation of the control over compliance with the period of performance requirement. Repeat Finding: This is a repeat finding. See finding 2022-017. Recommendation: In order to prevent future occurences of this deficiency, we recommend that management expand controls to ensure that they are able to demonstrate that all expenses meet their procurement policy. Auditee's Response: The Organization agrees with the finding. See attached corrective action plan.
2023 – 005 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2302ILLIEA 10/1/2022; G-2202ILLIEA 10/1/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 22-224038 Award Period: June 1, 2023 through September 30, 2024 and October 1, 2021 through June 30, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires non-federal entities charge only allowable costs incurred during the approved budget period of a general award’s period of performance. Effective internal controls should include procedures to ensure transactions for costs recorded for the beginning of the period of performance were not incurred prior to the start of the period of performance and transactions for cost recorded for the end of the period of performance were not incurred after the end of the period of performance for Federal awards. Condition: The County allocated costs to federal awards prior to the beginning of the period of performance and after the end of the period of performance. Questioned costs: $31,837 Context: 9 of 10 transactions tested were incurred prior to the period of performance and 1 of 15 transactions tested were incurred after the period of performance end date. Cause: Costs were inadvertently claimed that fell outside the period of performance. Effect: May result in unallowable costs being charged to the Federal program. Repeat Finding: This finding is a partial repeat of a finding in the prior year. The prior year finding number was 2022-005. Recommendation: We recommend the County review its procedures relative to allocating costs to Federal programs, and ensure only cost within the grant period are included. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 005 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2302ILLIEA 10/1/2022; G-2202ILLIEA 10/1/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 22-224038 Award Period: June 1, 2023 through September 30, 2024 and October 1, 2021 through June 30, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires non-federal entities charge only allowable costs incurred during the approved budget period of a general award’s period of performance. Effective internal controls should include procedures to ensure transactions for costs recorded for the beginning of the period of performance were not incurred prior to the start of the period of performance and transactions for cost recorded for the end of the period of performance were not incurred after the end of the period of performance for Federal awards. Condition: The County allocated costs to federal awards prior to the beginning of the period of performance and after the end of the period of performance. Questioned costs: $31,837 Context: 9 of 10 transactions tested were incurred prior to the period of performance and 1 of 15 transactions tested were incurred after the period of performance end date. Cause: Costs were inadvertently claimed that fell outside the period of performance. Effect: May result in unallowable costs being charged to the Federal program. Repeat Finding: This finding is a partial repeat of a finding in the prior year. The prior year finding number was 2022-005. Recommendation: We recommend the County review its procedures relative to allocating costs to Federal programs, and ensure only cost within the grant period are included. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 005 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2302ILLIEA 10/1/2022; G-2202ILLIEA 10/1/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 22-224038 Award Period: June 1, 2023 through September 30, 2024 and October 1, 2021 through June 30, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires non-federal entities charge only allowable costs incurred during the approved budget period of a general award’s period of performance. Effective internal controls should include procedures to ensure transactions for costs recorded for the beginning of the period of performance were not incurred prior to the start of the period of performance and transactions for cost recorded for the end of the period of performance were not incurred after the end of the period of performance for Federal awards. Condition: The County allocated costs to federal awards prior to the beginning of the period of performance and after the end of the period of performance. Questioned costs: $31,837 Context: 9 of 10 transactions tested were incurred prior to the period of performance and 1 of 15 transactions tested were incurred after the period of performance end date. Cause: Costs were inadvertently claimed that fell outside the period of performance. Effect: May result in unallowable costs being charged to the Federal program. Repeat Finding: This finding is a partial repeat of a finding in the prior year. The prior year finding number was 2022-005. Recommendation: We recommend the County review its procedures relative to allocating costs to Federal programs, and ensure only cost within the grant period are included. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 005 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2302ILLIEA 10/1/2022; G-2202ILLIEA 10/1/2021 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 23-221038; 22-224038 Award Period: June 1, 2023 through September 30, 2024 and October 1, 2021 through June 30, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Uniform Grant Guidance (2 CFR 200.308, 200.309, and 200.403(h)) requires non-federal entities charge only allowable costs incurred during the approved budget period of a general award’s period of performance. Effective internal controls should include procedures to ensure transactions for costs recorded for the beginning of the period of performance were not incurred prior to the start of the period of performance and transactions for cost recorded for the end of the period of performance were not incurred after the end of the period of performance for Federal awards. Condition: The County allocated costs to federal awards prior to the beginning of the period of performance and after the end of the period of performance. Questioned costs: $31,837 Context: 9 of 10 transactions tested were incurred prior to the period of performance and 1 of 15 transactions tested were incurred after the period of performance end date. Cause: Costs were inadvertently claimed that fell outside the period of performance. Effect: May result in unallowable costs being charged to the Federal program. Repeat Finding: This finding is a partial repeat of a finding in the prior year. The prior year finding number was 2022-005. Recommendation: We recommend the County review its procedures relative to allocating costs to Federal programs, and ensure only cost within the grant period are included. Views of responsible officials: There is no disagreement with the audit finding.
2023-001: OVERCHARGE OF FICA EXPENSES (repeat comment) Type: Considered a significant deficiency in internal control over compliance/immaterial noncompliance Program: ALN 93.958 Block Grants for Community Mental Health Services (Intensive Crisis Stabilization Services Expansion Grant) ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (SUD Block Grant) Criteria: As detailed by 2 CFR 200.309, “A non-Federal CMHSP may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through CMHSP made the Federal award that were authorized by the Federal awarding agency or pass-through CMHSP.”. Condition: During testing, it was noted that FICA costs were overcharged for ALN 93.958 by $6,663 and for ALN 93.959 by $458. Cause/Effect: This condition appears to be the result of an incorrect allocation for fringe for one employee. Questioned Cost: Immaterial Recommendation: We recommend that the CMHSP review its methods for determining allocations of fringe benefits to the grants. Management’s Resp: Management is in agreement with this recommendation.
2023-001: OVERCHARGE OF FICA EXPENSES (repeat comment) Type: Considered a significant deficiency in internal control over compliance/immaterial noncompliance Program: ALN 93.958 Block Grants for Community Mental Health Services (Intensive Crisis Stabilization Services Expansion Grant) ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (SUD Block Grant) Criteria: As detailed by 2 CFR 200.309, “A non-Federal CMHSP may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through CMHSP made the Federal award that were authorized by the Federal awarding agency or pass-through CMHSP.”. Condition: During testing, it was noted that FICA costs were overcharged for ALN 93.958 by $6,663 and for ALN 93.959 by $458. Cause/Effect: This condition appears to be the result of an incorrect allocation for fringe for one employee. Questioned Cost: Immaterial Recommendation: We recommend that the CMHSP review its methods for determining allocations of fringe benefits to the grants. Management’s Resp: Management is in agreement with this recommendation.
2023-002 OVERCHARGE OF INDIRECT COSTS Type: Considered a significant deficiency in internal control over compliance/immaterial noncompliance Program: ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (SUD Block Grant) Criteria: As detailed by 2 CFR 200.309, “A non-Federal CMHSP may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through CMHSP made the Federal award that were authorized by the Federal awarding agency or pass-through CMHSP.”. Condition: During testing, it was noted that indirect costs were overcharged for ALN 93.959 by an immaterial amount. Cause/Effect: This condition was the result of requesting indirect costs based on 1/12th of the budgeted indirect costs each month instead of requesting a percentage of direct costs each month. Questioned Cost: Immaterial Recommendation: We recommend that the CMHSP review its methods for applying indirect costs to grants. Management’s Resp: Management is in agreement with this recommendation.
2023-001: OVERCHARGE OF FICA EXPENSES (repeat comment) Type: Considered a significant deficiency in internal control over compliance/immaterial noncompliance Program: ALN 93.958 Block Grants for Community Mental Health Services (Intensive Crisis Stabilization Services Expansion Grant) ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (SUD Block Grant) Criteria: As detailed by 2 CFR 200.309, “A non-Federal CMHSP may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through CMHSP made the Federal award that were authorized by the Federal awarding agency or pass-through CMHSP.”. Condition: During testing, it was noted that FICA costs were overcharged for ALN 93.958 by $6,663 and for ALN 93.959 by $458. Cause/Effect: This condition appears to be the result of an incorrect allocation for fringe for one employee. Questioned Cost: Immaterial Recommendation: We recommend that the CMHSP review its methods for determining allocations of fringe benefits to the grants. Management’s Resp: Management is in agreement with this recommendation.
2023-001: OVERCHARGE OF FICA EXPENSES (repeat comment) Type: Considered a significant deficiency in internal control over compliance/immaterial noncompliance Program: ALN 93.958 Block Grants for Community Mental Health Services (Intensive Crisis Stabilization Services Expansion Grant) ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (SUD Block Grant) Criteria: As detailed by 2 CFR 200.309, “A non-Federal CMHSP may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through CMHSP made the Federal award that were authorized by the Federal awarding agency or pass-through CMHSP.”. Condition: During testing, it was noted that FICA costs were overcharged for ALN 93.958 by $6,663 and for ALN 93.959 by $458. Cause/Effect: This condition appears to be the result of an incorrect allocation for fringe for one employee. Questioned Cost: Immaterial Recommendation: We recommend that the CMHSP review its methods for determining allocations of fringe benefits to the grants. Management’s Resp: Management is in agreement with this recommendation.
2023-002 OVERCHARGE OF INDIRECT COSTS Type: Considered a significant deficiency in internal control over compliance/immaterial noncompliance Program: ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (SUD Block Grant) Criteria: As detailed by 2 CFR 200.309, “A non-Federal CMHSP may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through CMHSP made the Federal award that were authorized by the Federal awarding agency or pass-through CMHSP.”. Condition: During testing, it was noted that indirect costs were overcharged for ALN 93.959 by an immaterial amount. Cause/Effect: This condition was the result of requesting indirect costs based on 1/12th of the budgeted indirect costs each month instead of requesting a percentage of direct costs each month. Questioned Cost: Immaterial Recommendation: We recommend that the CMHSP review its methods for applying indirect costs to grants. Management’s Resp: Management is in agreement with this recommendation.
2023-005 – PERIOD OF PERFORMANCE Type: Significant Deficiency in Internal Control / Non-compliance Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II – Credit Recovery Criteria: As detailed by 2 CFR 200.308, 2 CFR 200.309, and 2 CFR 200 403(h), A non-federal entity may only charge allowable costs incurred 1) during the approved budget period, or 2) before the approved budget period if authorized by the federal awarding agency or pass-through entity. Condition: During testing of amounts charged to the grants, it was noted that an amount charged to the grant was incurred outside the approved budget period of performance. Cause/Effect: This condition appears to be the result of a misunderstanding of costs allowed under this grant. These costs were not in compliance with 2 CFR 200. Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of the period of performance for each grant and then establish/modify internal controls to assure that only costs incurred within the approved budget period of performance are charged to the grant. View of Responsible Official: Management is in agreement with this recommendation
Finding 2023-002: Questioned Cost – Material Weakness 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)). Also, costs should not be included as a cost of any other federally financed programs in either the current or prior period. Costs charged to federal grants should be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Condition: Costs for US Department of Transportation, Mobility Management Grant 20.507 Section 5307 included a $30,000 charge for use of the Data Management System (DMS). The charge is based on a contract rate charged to outside entities that varies depending on the number of users. Management stated the charge was to recoup costs for use of the DMS. Costs for the DMS consist of historical costs to get the system functioning, along with current personnel costs to operate the system and provide the contracted training. The historical costs occurred outside the period of performance and are thus unallowable. Personnel costs are already being charged to the grant through the allocated payroll and benefits of trainers and other personnel, and thus should not also be charged through the contract rate. In addition, if the contract rate includes a profit component this would also be unallowable to charge to the grant. We also noted the same $30,000 charge was included in US Department of Transportation, Enhanced Mobility of Seniors and Individuals with Disabilities, Section 5310. Cause: Paratransit’s internal controls over the determination of allowable costs were not operating effectively. Effect: The DMS costs were removed and replaced with an allowable 10% de minimus overhead charge. Recommendation: We recommend that costs charged to federal grants be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Management’s Response: See corrective action plan.
2023-001 ALLOWABLE COST, CASH MANAGEMENT, AND PERIOD OF PERFORMANCE - SIGNIFICANT DEFICIENCY Federal Program Unaccompanied Alien Children Program ALN 93.676 Criteria Part 3 of the Compliance Supplement indicates non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Part 3 of the Compliance Supplement indicates 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/Cause In July 2022, the Home requested reimbursement and received funding to cover costs that had not yet been incurred or paid for as of June 30, 2023. Effect The Home was reimbursed for costs that were not incurred during the budget period. Additionally, the Home has held onto grant funds for twelve plus months. Questioned Costs Known questioned costs are $52,841. Context The Home budgeted to have new fire alarms installed in the cottages during the July 1, 2021 - June 30, 2022 grant budget period. Due to supply chain issues and labor shortages the alarms were not installed until the Fall of 2023 at which time the Home paid the contractor. Repeat Finding No. Recommendation We recommend the Home contact the funding agency to inquire about returning the funds and any interest earned. We also recommend that the Home revisit and strengthen internal controls over allowable activities, allowable costs, cash management, and period of availability related to grant programs. Management Response See corrective action plan included in this report package.
Department of Labor and Industry Finding 2023 – 018: ALN 84.126 – Rehabilitation Services – Vocational Rehabilitation Grants to States A Significant Deficiency and Noncompliance Exist in the Department of Labor and Industry’s Procedures Related to Period of Performance Requirements Federal Grant Number(s) and Year(s): H126A210056 (10/01/2020 – 9/30/2022) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Compliance Requirement: Period of Performance Condition: During our audit of the Rehabilitation Services – Vocational Rehabilitation Grants to States (RS-VR) program, we tested internal control over and compliance with period of performance requirements for the grant awarded by the United States Department of Education that had a period of performance date ending during the fiscal year ended June 30, 2023 audit period. • Two of 55 expenditures tested that were charged to the federal fiscal year 2021 RS-VR grant that closed during the audit period, were incurred after the allowable period of performance. These expenditures included two rental payments totaling $8,763. Both payments were for November 2022 rental charges but were charged to the grant which had a period end date of September 30, 2022. Expenditures posted in the last month of the allowable period of performance and after (including the two rental payments) totaled $36,651,862. Management was unable to provide authorization from the federal awarding agency for allowance of the expenditures occurring outside of the period of performance. Criteria: 2 CFR Section 200.303(a), Internal controls, states: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR Section 200.309, Period of performance, states: A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in §200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the award that were authorized by the Federal awarding agency or pass-through entity. Management Directive 325.12, Amended, Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office’s Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Finding 2023 – 018: (continued) Cause: Office of Vocational Rehabilitation (OVR), Pennsylvania Department of Labor and Industry personnel did not check service dates prior to submitting invoices for payment which were charged to the federal fiscal year 2021 grant. OVR personnel did not have adequate procedures in place to ensure that only costs incurred during the allowable period of performance were charged to the grant. Effect: Expenditures outside of the allowable period of performance were incorrectly charged to the grant without authorization by the federal awarding agency, resulting in noncompliance and questioned costs. Recommendation: We recommend that OVR personnel implement procedures to ensure that costs and adjustments being charged to a federal grant are incurred within the allowable period of performance of the grant to which they are being charged, or when necessary, obtain authorization from the federal awarding agency prior to charging costs that are outside the allowable period of performance. Agency Response: OVR agrees with this finding. Questioned Costs: Known questioned costs of $8,763 were determined, which represents the amount of transactions incurred and charged to the federal grant outside the allowable period of performance.
Reference Number: 2023-008 Prior Year Finding: 2022-017 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI393532355A50 (10/1/2022 – 12/31/2025) Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) charged costs to the federal grant prior to the allowable start of the period of performance. Payments were also issued without review and approval by supervisory staff. Context: Sixty transactions were selected for testing and the following exceptions were noted: • Five of sixty transactions were charged to the award before the allowable period of performance. The grant award start date was October 1, 2022 but costs, totaling $2,277, were incurred in June, July and September 2022. • The Department’s key control is that all payments are supported by an invoice approved by a program manager who is aware of the grant’s period of performance. Four of sixty transactions did not have evidence of supervisory approval prior to issuance of payment. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Department’s procedures and internal controls were not operating sufficiently to ensure that expenditures charged to the program were incurred within the award’s period of performance. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Questioned costs: Below the reportable limit. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Views of responsible officials: The Department acknowledges and accepts this finding.
Reference Number: 2023-008 Prior Year Finding: 2022-017 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI393532355A50 (10/1/2022 – 12/31/2025) Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) charged costs to the federal grant prior to the allowable start of the period of performance. Payments were also issued without review and approval by supervisory staff. Context: Sixty transactions were selected for testing and the following exceptions were noted: • Five of sixty transactions were charged to the award before the allowable period of performance. The grant award start date was October 1, 2022 but costs, totaling $2,277, were incurred in June, July and September 2022. • The Department’s key control is that all payments are supported by an invoice approved by a program manager who is aware of the grant’s period of performance. Four of sixty transactions did not have evidence of supervisory approval prior to issuance of payment. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Department’s procedures and internal controls were not operating sufficiently to ensure that expenditures charged to the program were incurred within the award’s period of performance. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Questioned costs: Below the reportable limit. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Views of responsible officials: The Department acknowledges and accepts this finding.
Finding Number: 2023-001 – Period of Performance Information on Federal Program: National Endowment for the Humanities ALN: 45.309 ALN Name: Museum Grants for African American History and Culture Context: During testing we identified a 2024 expense in the amount of $24,323 which was inaccurately recorded in fiscal year 2023. Criteria: An entity may charge to the Federal award only allowable costs incurred during the approved budget period of a Federal award’s period of performance (2 CFR sections 200.308, 200.309, and 200.403(h)). Condition: A fiscal year 2024 expense in the amount of $24,323 was inaccurately recorded in fiscal year 2023. Cause: Policies and procedures were not adhered to ensure expenses are recorded in the correct period. Effect or Potential Effect: Expenses of $24,323 were improperly recorded in fiscal year 2023. Questioned Costs: N/A Recommendation: We recommend that the Library ensure its policies and procedures are followed on a consistent basis to ensure the proper recording of expenses in the correct period. Views of Responsible Officials: The Library agrees with the finding. The Library continues to take steps to improve this process. See the Library’s further response to this finding as described in the accompanying management's planned corrective actions, Appendix A.
Finding 2023-002: Period of Performance Information on the Federal Program: 93.368 Criteria: 2 CFR §200.309 non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in §200.461 Publication and printing costs) 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: In testing the Foundation's compliance with the period of performance availability for Federal awards, we noted one instance in which an invoice for an expense incurred outside of both the award's period of performance and the Foundation's fiscal year-end was recorded and charged to the Federal award. Cause: The Foundation's controls are not adequately designed to detect an expense recorded outside of the award's period of performance or outside of the Foundation's fiscal year-end. Effect: Costs that are not incurred and recorded within the period of performance may be determined and considered an unallowable charge against a Federally funded program. Questioned Costs: $55,000 Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards that ended within the 2023 fiscal year-end. The report in which samples were selected was generated directly from the Foundation's general ledger (accounting system). We consider our sample to be representative of the population. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that all invoices be reviewed to ensure that expenses are appropriately recorded in the period for which they are incurred.
2023-005: Indirect Costs Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Value-Based Medical Student Education Training Program Assistance Listing Number: 93.680 Award Number and Year: T99HP39200 (July 1, 2020 – June 30, 2024) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Applicable Institution: University of Mississippi Medical Center (UMMC) Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance – Per 2 CFR § 200.403, except where otherwise authorized by statute, costs must meet the following general criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award to be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award regarding types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also §200.306 Cost sharing or matching paragraph (b). (g) Be adequately documented. See also §§200.300 Statutory and national policy requirements through 200.309 Period of performance of this part. Condition: Indirect cost expense was improperly calculated. Questioned Costs: None Context: This condition occurred for the one award in our population. Cause: A transition to a new ERP system resulted in issues with calculating F&A according to our negotiated rate agreement. As a result, we recalculate F&A on each project when invoicing or reporting. This F&A entry was identified; however, it was not made timely. Effect: Indirect costs may be incorrectly charged to the program. Repeat Finding: No Recommendation: We recommend the institution strengthen its internal controls to ensure that calculations are reviewed and adjusted for, if necessary, in a timely manner. Views of Responsible Officials: There is no disagreement with the audit finding.
FINDING: 2023-004 – Internal Control and Compliance over Period of Performance Federal Agency: Department of Health and Human Services Pass-through Agency: Pennsylvania Department of Community and Economic Development Program: 93.569 Community Services Block Grant and 93.569 COVID-19: Community Services Block Grant Statement of Condition: The Partnership drew federal CSBG funds in December 2022 in the amount of $36,853 to be used for an equipment purchase. The funds were not yet obligated for the purchase, as no contract was in place and Board approval was not yet obtained. In accordance with compliance requirements for CSBG funds, funds granted by the state to subgrantees are available to the subgrantee for obligation during the federal fiscal year that the grant was made and in the following federal fiscal year. Funds were not obligated within the appropriate time period (as of December 31, 2023). Criteria: In accordance with Uniform Guidance period of performance requirements found in 2 CFR section 200.1, 200.308, 200.309, and 200.344, the Partnership is required to ensure that funds are obligated with the required time frame of the period of performance. Effect: The Partnership was not in compliance with the period of performance requirements of the Uniform Guidance. Cause: Procedures in place to ensure that funds were utilized in the proper period of performance were not adequate. Questioned Costs: Unknown Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Partnership establish procedures to ensure the funds are obligated and utilized in the proper period of performance. Views of responsible officials and planned corrective action: Management agrees with the finding. See attached corrective action plan.
FINDING: 2023-004 – Internal Control and Compliance over Period of Performance Federal Agency: Department of Health and Human Services Pass-through Agency: Pennsylvania Department of Community and Economic Development Program: 93.569 Community Services Block Grant and 93.569 COVID-19: Community Services Block Grant Statement of Condition: The Partnership drew federal CSBG funds in December 2022 in the amount of $36,853 to be used for an equipment purchase. The funds were not yet obligated for the purchase, as no contract was in place and Board approval was not yet obtained. In accordance with compliance requirements for CSBG funds, funds granted by the state to subgrantees are available to the subgrantee for obligation during the federal fiscal year that the grant was made and in the following federal fiscal year. Funds were not obligated within the appropriate time period (as of December 31, 2023). Criteria: In accordance with Uniform Guidance period of performance requirements found in 2 CFR section 200.1, 200.308, 200.309, and 200.344, the Partnership is required to ensure that funds are obligated with the required time frame of the period of performance. Effect: The Partnership was not in compliance with the period of performance requirements of the Uniform Guidance. Cause: Procedures in place to ensure that funds were utilized in the proper period of performance were not adequate. Questioned Costs: Unknown Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Partnership establish procedures to ensure the funds are obligated and utilized in the proper period of performance. Views of responsible officials and planned corrective action: Management agrees with the finding. See attached corrective action plan.
Federal Agency: U.S. Department of Homeland Security Federal Program Name: Staffing for Adequate Fire and Emergency Response ALN: 97.083 Award Period: March 14, 2023 – March 13, 2026 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Prior Year Finding: No Criteria or specific requirement: Compliance – A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Social Services Block Grant funds must be expended by the state in the fiscal year allotted or in the succeeding fiscal year. Control – Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Homeland Security charged costs to the program that were incurred outside of the grant award’s period of performance. Context: One of the six pay-periods selected for testing, had expenditures totaling $19,871, that were incurred on March 13, 2023, which is prior to the award’s period of performance start date of March 14, 2023. Questioned costs: Known costs of $19,871. Cause: Personnel Costs for March 13, 2023 embedded in the pay period report of March 13, 2023 through March 26, 2023 were submitted as expenditures before the period of performance start date of March 14, 2023. This was caused by an oversight of removing the first day of employment March 13, 2023 from the expenditures when the first reimbursement was submitted for payment to FEMA. Effect: The Department was not compliant with the grant’s period of performance which could result in the grantor’s disallowance of the costs. Recommendation: We recommend that the Department review and enhance its procedures and controls to ensure that expenditures charged to the program are incurred within the grant’s period of performance. Views of responsible officials: We concur with your finding and have taken the following corrective action: 1. The error has been reported to FEMA and the transaction for correcting this error will be submitted with the next reimbursement request as a negative adjustment. 2. We are continuously monitoring the expenditure consistency with the grant award timeline. 3. We are working with our Grant Coordinator to ensure that all of our grants are consistent with the requirements of the award.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states 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. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. 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: Opioid Response Grants Assistance Listing Number: 93.788 Federal Award Identification Number: H79TI083278 Pass-Through Entity: Illinois Department of Human Services Pass-Through Number: 43CBC03525 Award Periods: July 1, 2022 – June 30, 2023 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 incurred outside of the period of performance were charged to the grant. Questioned Costs: $26,230 Context: Six of eighteen transactions selected for testing. Cause: Unknown. Effect: The Organization may allocate unallowable costs to the grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which 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.
2023-003 – Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Condition: During our audit, we noted that three (3) out of forty (40) samples summed up to $39,055.50 had no proper source documents to support the transactions charged to the grant brought by lost official receipts, hence, identified as not adequately documented. Alternatively, the City created a memo to document the loss of receipts signed by the department head. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable cost $39,056 and the estimated questionable cost is projected to be $69,269. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding.
Federal Agency: Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027 Award Year: 2023 Compliance Requirement: Period of Performance Type of Finding Compliance Internal Control over Compliance – Material Weakness 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)). Management of the School District is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal pro¬gram. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of per¬forming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There were several invoices for costs that occurred prior to the start of the School District’s fiscal year 2023 IDEA special education grant. Since these costs occurred outside of the authorized period of performance, they are not eligible to be charged to that grant. Cause The School District has not established adequate procedures to ensure costs charged to the grant are within the authorized period of performance. Effect or Potential Effect Due to the weakness in internal control noted above, there are known and questioned costs reported related to salaries and contracted services incurred prior to the period of performance and charged to the grant. Questioned Costs Known questioned costs reported are $49,883. Recommendation The School District should implement controls to ensure that no costs are incurred for a grant prior to the authorized period of performance. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Federal Agency: Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027 Award Year: 2023 Compliance Requirement: Period of Performance Type of Finding Compliance Internal Control over Compliance – Material Weakness 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)). Management of the School District is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal pro¬gram. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of per¬forming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There were several invoices for costs that occurred prior to the start of the School District’s fiscal year 2023 IDEA special education grant. Since these costs occurred outside of the authorized period of performance, they are not eligible to be charged to that grant. Cause The School District has not established adequate procedures to ensure costs charged to the grant are within the authorized period of performance. Effect or Potential Effect Due to the weakness in internal control noted above, there are known and questioned costs reported related to salaries and contracted services incurred prior to the period of performance and charged to the grant. Questioned Costs Known questioned costs reported are $49,883. Recommendation The School District should implement controls to ensure that no costs are incurred for a grant prior to the authorized period of performance. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Federal Agency: Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027 Award Year: 2023 Compliance Requirement: Period of Performance Type of Finding Compliance Internal Control over Compliance – Material Weakness 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)). Management of the School District is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal pro¬gram. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of per¬forming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There were several invoices for costs that occurred prior to the start of the School District’s fiscal year 2023 IDEA special education grant. Since these costs occurred outside of the authorized period of performance, they are not eligible to be charged to that grant. Cause The School District has not established adequate procedures to ensure costs charged to the grant are within the authorized period of performance. Effect or Potential Effect Due to the weakness in internal control noted above, there are known and questioned costs reported related to salaries and contracted services incurred prior to the period of performance and charged to the grant. Questioned Costs Known questioned costs reported are $49,883. Recommendation The School District should implement controls to ensure that no costs are incurred for a grant prior to the authorized period of performance. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Federal Agency: Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027 Award Year: 2023 Compliance Requirement: Period of Performance Type of Finding Compliance Internal Control over Compliance – Material Weakness 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)). Management of the School District is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal pro¬gram. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of per¬forming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There were several invoices for costs that occurred prior to the start of the School District’s fiscal year 2023 IDEA special education grant. Since these costs occurred outside of the authorized period of performance, they are not eligible to be charged to that grant. Cause The School District has not established adequate procedures to ensure costs charged to the grant are within the authorized period of performance. Effect or Potential Effect Due to the weakness in internal control noted above, there are known and questioned costs reported related to salaries and contracted services incurred prior to the period of performance and charged to the grant. Questioned Costs Known questioned costs reported are $49,883. Recommendation The School District should implement controls to ensure that no costs are incurred for a grant prior to the authorized period of performance. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Federal Agency: Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027 Award Year: 2023 Compliance Requirement: Period of Performance Type of Finding Compliance Internal Control over Compliance – Material Weakness 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)). Management of the School District is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal pro¬gram. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of per¬forming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There were several invoices for costs that occurred prior to the start of the School District’s fiscal year 2023 IDEA special education grant. Since these costs occurred outside of the authorized period of performance, they are not eligible to be charged to that grant. Cause The School District has not established adequate procedures to ensure costs charged to the grant are within the authorized period of performance. Effect or Potential Effect Due to the weakness in internal control noted above, there are known and questioned costs reported related to salaries and contracted services incurred prior to the period of performance and charged to the grant. Questioned Costs Known questioned costs reported are $49,883. Recommendation The School District should implement controls to ensure that no costs are incurred for a grant prior to the authorized period of performance. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Education Department: Portsmouth Public Schools (PPS) Federal Program: Special Education Cluster (IDEA) Assistance Listing: 84.027, 84.173 Federal Award Identification Number and Year: None, 2021, 2022, 2023 Pass-Through Entity: Commonwealth of Virginia Department of Education Pass-Through Award Number and Period: H027A200107 (7/1/20-9/30/22) H027A210107 (7/1/21-9/30/23) H027X210107 (7/1/21-9/30/23) H027A220107 (4/17/23-9/30/23) H173A200107 (7/1/20-9/30/22) H173A210107 (7/1/21-9/30/23) H173X210107 (7/1/21-9/30/23) Compliance Requirement: Allowable Costs/Cost Principles (Time and Effort Certifications) Type of Finding: Material Weakness in Internal Control over Compliance, Maternal Non-Compliance Criteria or specific requirement: Compliance – Per 2 CFR section 403, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also § 200.306(b). (f) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Control – Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: PPS was unable to provide documentation supporting time and effort for employee’s salary charged to the grant. We were unable to support the allowable salary reported on the grant due to lack of time and effort certification. Context For 13 out of 40 employee’s salary selected for testing were not supported by time and effort certification. Questioned costs: $30,763, represents the employee’s salary charged to the federal program and not supported by time and effort certification. Cause: PPS did not maintain documentation supporting time and effort for employee pay charged to the grant. Effect: Failure to adhere to allowable cost requirements may result in PPS charging expenditures to the program that are not allowable. Recommendation: We recommend that PPS enhance its procedures and internal controls to ensure that it retains documentation supporting time and effort on federal grants and that this documentation is available for audit purposes. Views of responsible officials: Management agrees with the finding.