Criteria: Per 2 CFR §200.309 and §200.403(g), only costs incurred during the period of performance specified in the federal award are allowable. Costs incurred outside this period are unallowable unless specifically authorized by the awarding agency. Condition: The County lacked sufficient documentation to demonstrate that all payroll costs charged to the grant were incurred within the grant’s period of performance. Questioned costs: Known questioned costs of $33,314. Context: Grant 20-CDBG-CV1-00122 had a period of performance ending February 28, 2024. The County charged $31,314 in payroll costs to this grant using the same allocation method described in Finding 2024-013. However, the allocation was based on hours worked throughout FY24, and the County could not provide a detailed transaction listing to isolate costs incurred within the grant’s performance period. While $25,755 in nonpayroll costs were confirmed to be within the allowable period, the payroll costs could not be verified. Cause: The County did not maintain detailed records of expenditures by grant and relied on an allocation method that did not align with the grant’s performance period. Effect: Payroll costs totaling $33,314 may have been charged outside the allowable period, resulting in questioned costs and a material weakness in internal controls. Repeat Finding: This is not a repeat finding. Recommendation: The County should implement procedures to ensure that all expenditures are tracked by grant and incurred within the specified period of performance. Detailed transaction listings should be maintained to support compliance testing. Views of responsible officials: There is no disagreement with the audit finding.
Criteria: Per 2 CFR §200.309 and §200.403(g), only costs incurred during the period of performance specified in the federal award are allowable. Costs incurred outside this period are unallowable unless specifically authorized by the awarding agency. Condition: The County lacked sufficient documentation to demonstrate that all payroll costs charged to the grant were incurred within the grant’s period of performance. Questioned costs: Known questioned costs of $33,314. Context: Grant 20-CDBG-CV1-00122 had a period of performance ending February 28, 2024. The County charged $31,314 in payroll costs to this grant using the same allocation method described in Finding 2024-013. However, the allocation was based on hours worked throughout FY24, and the County could not provide a detailed transaction listing to isolate costs incurred within the grant’s performance period. While $25,755 in nonpayroll costs were confirmed to be within the allowable period, the payroll costs could not be verified. Cause: The County did not maintain detailed records of expenditures by grant and relied on an allocation method that did not align with the grant’s performance period. Effect: Payroll costs totaling $33,314 may have been charged outside the allowable period, resulting in questioned costs and a material weakness in internal controls. Repeat Finding: This is not a repeat finding. Recommendation: The County should implement procedures to ensure that all expenditures are tracked by grant and incurred within the specified period of performance. Detailed transaction listings should be maintained to support compliance testing. Views of responsible officials: There is no disagreement with the audit finding.
Criteria: Per 2 CFR §200.309 and §200.403(g), only costs incurred during the period of performance specified in the federal award are allowable. Costs incurred outside this period are unallowable unless specifically authorized by the awarding agency. Condition: The County lacked sufficient documentation to demonstrate that all payroll costs charged to the grant were incurred within the grant’s period of performance. Questioned costs: Known questioned costs of $33,314. Context: Grant 20-CDBG-CV1-00122 had a period of performance ending February 28, 2024. The County charged $31,314 in payroll costs to this grant using the same allocation method described in Finding 2024-013. However, the allocation was based on hours worked throughout FY24, and the County could not provide a detailed transaction listing to isolate costs incurred within the grant’s performance period. While $25,755 in nonpayroll costs were confirmed to be within the allowable period, the payroll costs could not be verified. Cause: The County did not maintain detailed records of expenditures by grant and relied on an allocation method that did not align with the grant’s performance period. Effect: Payroll costs totaling $33,314 may have been charged outside the allowable period, resulting in questioned costs and a material weakness in internal controls. Repeat Finding: This is not a repeat finding. Recommendation: The County should implement procedures to ensure that all expenditures are tracked by grant and incurred within the specified period of performance. Detailed transaction listings should be maintained to support compliance testing. Views of responsible officials: There is no disagreement with the audit finding.
Criteria: Per 2 CFR §200.309 and §200.403(g), only costs incurred during the period of performance specified in the federal award are allowable. Costs incurred outside this period are unallowable unless specifically authorized by the awarding agency. Condition: The County lacked sufficient documentation to demonstrate that all payroll costs charged to the grant were incurred within the grant’s period of performance. Questioned costs: Known questioned costs of $33,314. Context: Grant 20-CDBG-CV1-00122 had a period of performance ending February 28, 2024. The County charged $31,314 in payroll costs to this grant using the same allocation method described in Finding 2024-013. However, the allocation was based on hours worked throughout FY24, and the County could not provide a detailed transaction listing to isolate costs incurred within the grant’s performance period. While $25,755 in nonpayroll costs were confirmed to be within the allowable period, the payroll costs could not be verified. Cause: The County did not maintain detailed records of expenditures by grant and relied on an allocation method that did not align with the grant’s performance period. Effect: Payroll costs totaling $33,314 may have been charged outside the allowable period, resulting in questioned costs and a material weakness in internal controls. Repeat Finding: This is not a repeat finding. Recommendation: The County should implement procedures to ensure that all expenditures are tracked by grant and incurred within the specified period of performance. Detailed transaction listings should be maintained to support compliance testing. Views of responsible officials: There is no disagreement with the audit finding.
Improve Controls Over Period of Performance Over Federal Awards (Significant Deficiency) Federal Agency: Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027 Award Year: 2024 Compliance Requirement: Period of Performance Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Previously reported as 2023-001 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 payroll charges and invoices for costs that occurred prior to the start of the School District’s fiscal year 2024 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, which could impact future grant funding. Questioned Costs The payroll charges and invoices for costs in question are below $25,000. Recommendation The School District should implement controls to ensure that no costs are charged to 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.
MW-2024-002 Improve Controls Over Period of Performance Over Federal Awards Federal Program(s) Information Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027/84.173 Award Year: 2022 Compliance Requirement: Period of Performance Type of Finding Material Noncompliance 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 Department 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 program. 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 invoices for costs incurred after the end of the School Department’s fiscal year 2022 ARP SPED IDEA/Preschool grant. Since these costs occurred outside the authorized period of performance, they are not eligible to be charged to the grant. Cause The School Department 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 for expenditures incurred outside the period of performance and charged to the grant. Questioned Costs Questioned costs related to these invoices outside of the period of performance were approximately $60,000. Recommendation The School Department should implement controls to ensure that no costs are charged to a grant outside the authorized period of performance. Views of Responsible Officials Management’s corrective action plan is included at the end of this report after the schedule of prior year findings.
FINDING REFERENCE NUMBER 2024-008 FEDERAL PROGRAMS (ALN – 84.002) ADULT EDUCATION–BASIC GRANTS TO STATES (ALN – 84.027) SPECIAL EDUCATION–GRANTS TO STATES (IDEA, PART B) (ALN – 84.048A) CAREER AND TECHNICAL EDUCATION–BASIC GRANTS TO STATES (PERKINS V) U.S. DEPARTMENT OF EDUCATION AWARD NUMBERS V002A210005 (07/01/2021 – 09/30/2023); H027A210003 (07/01/2021 – 09/30/2023); V048A210052 (07/01/2021 – 09/30/2023) COMPLIANCE REQUIREMENT PERIOD OF PERFORMANCE TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA According to the 2 CFR §200 Appendix XI, 84.000-Cross-Cutting Section, all ESEA and other programs as identified in the program documents except subrecipients under Career Technical Education (CTE) – Funds must be obligated during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15-month period of initial availability plus a 12-month period for carryover. STATEMENT OF CONDITION For the ALN 84.002, 84.027, and 84.048A, we obtained all the disbursements made during the fiscal year 2023-2024 for the grant awards V002A210005, H027A210003, and V048A210052 which had an ending date by September 30, 2023. For these disbursements we verified that they had purchase orders issued with an effective date on or before September 30, 2023. However, for the population of each program we noted and identified purchases order were issued with an effective date for the month of October 2023, clearly indicating these transactions were been obligated after the Grant Award ending date September 30, 2023. For the ALN 84.002 we noted one (1) purchase order, for the ALN 84.027 we found two (2) purchase orders, and for the ALN 84.048A we noted five (5) purchase orders. QUESTIONED COSTS None. PERSPECTIVE INFORMATION This is a systemic deficiency. The PRDE does not have in place proper documented internal control procedures which could prevent to create and approving a purchase order after the period of performance of an award. STATEMENT OF CAUSE The PRDE lacks a standardized and documented monitoring process in the Budget Area to avoid the registration of any purchase order after September 30, of each year, for any closing grant awards. We corroborated with PRDE that this process is manually performed by one of the accountants in the Budget Department who closes access in SIFDE to create a new purchase order after the period of performance due date. POSSIBLE ASSERTED EFFECT Programs did not comply with this requirement, which could lead to unallowable costs. In addition, an over-expenditure could occur and not properly prevented by PRDE. IDENTIFICATION OF REPEAT FINDING Not previously reported. RECOMMENDATIONS We recommend that the PRDE create and document internal control procedures for reviewing purchase order recorded in the grant award that will end during the current fiscal year in order to ensure that there are not any obligations incorrectly recorded in a closed grant award. In addition, proper procedures should be in place and properly documented in the Budget Division, that prevents a grant continuation open and allows the creation of purchase orders after the period of performance. VIEWS OF RESPONSIBLE OFFICIALS The PRDE acknowledges and accepts the finding. Management recognizes the importance of ensuring that all obligations and expenditures are properly incurred within the authorized period of performance established for each grant in compliance with federal regulations under 2 CFR §200.77 and §200.309. The PRDE has initiated a comprehensive review of the purchase orders (POs) identified in the finding that were obligated after the grant award end date of September 30, 2023. Each program—Adult Education (84.002), Special Education (IDEA, 84.027), and Career and Technical Education (Perkins V, 84.048A)—will evaluate these transactions to determine whether they correspond to allowable and valid obligations incurred during the active grant period. Where applicable and supported by documentation, PRDE will adjust or reclassify the expenses to the appropriate and current grant period. In instances where reassignment to an active grant is not possible, PRDE will identify available state funds to absorb these costs and will process the corresponding reimbursements or journal entries to ensure full compliance with federal requirements. Furthermore, PRDE’s Budget Office, in coordination with the Federal Affairs Office and Finance Office, is in the process of strengthening internal control procedures to prevent the creation of POs after the period of performance. This includes: (i)Automating system controls within the SIFDE accounting system to restrict the creation of POs for grants whose period of performance has expired; (ii)Implement an internal monitoring checklist at the program and budget level to validate the effective date of POs prior to approval; (iii)Establishing a communication between the Budget Office and program offices to ensure that any pending obligations are reviewed and processed before the closeout of the grant period. These corrective actions aim to ensure compliance with federal regulations, strengthen accountability, and enhance the overall effectiveness of the internal control environment related to the management of federal funds. IMPLEMENTATION DATE December 30, 2025 RESPONSIBLE PERSON María de los A. Lizardí Valdés Director Office of Federal Affairs Evelyn Rodríguez Cardé Director of Finance Dr. Jorge L. Acosta Irizarry Auxiliary Secretary of Occupational and Technical Education Dr. Yarilis Santiago Ramos Auxiliary Secretary of Adult Education Enid Díaz Nieves Associate Secretary of Special Education Executive Director
Criteria: Workforce Innovation and Opportunity Act (WIOA) Adult and Dislocated Worker funds must be used at the local level to pay for career and training services through the AJC system for program participants. Other activities allowed include basic career services, individualized career services, and training services. Activities allowed under Youth Activities include tutoring, alternative secondary school services, paid and unpaid work experiences, occupational skill training, leadership development, adult mentoring, follow-up services, financial literacy education, and entrepreneurial skills training. 2 CFR 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (g) Be adequately documented. See §§ 200.300 through 200.309. 2 CFR 200.303 Internal Controls (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control- Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Workforce Innovation and Opportunity Act (WIOA) Funds were expended for costs that are not explicitly allowable under the compliance requirements for activities allowed or unallowed including charges for conferences and travel. • Travel and conference expense reimbursements did not establish a clear business purpose or provide other evidence of attendance. Receipts lacked a detailed breakdown of costs charged to the federal award. • Employee reimbursements did not include itemized breakdowns and were not reported on the entity’s Expense Form. • The entity’s policy does not outline the approval requirements for Executive Director expense reimbursements. Cause: Employee expenditures were not reviewed and approved prior to being charged to the federal award program. • The necessary approvals were not obtained prior to incurring costs charged to the federal award program. • The entity’s policy does not explicitly state approvals required for Executive Director expense reimbursements. • Expense Forms were not utilized for employee reimbursements per the entity’s written policy. Effect: Lack of proper approvals and documentation could result in unallowable costs being charged to the federal award, possibly resulting in the entity having to return funds to the federal agency or pass-through entity. This may also lead to reduction of future federal funding due to noncompliance. This also creates an opportunity for fraud to occur. • Unnecessary or unreasonable costs charged to the federal award program. • Possible reduction of future funding or requirement to return funding used for unallowable costs to awarding agency. Questioned Costs: $14,548 Repeat Finding: No Recommendation: We recommend that management review policies over employee travel expenses, conferences, and reimbursements to ensure they align with federal award requirements, are communicated to all employees, and provide necessary training. In addition, we recommend the WIB ensure that all employee reimbursement expenses are reviewed and approved prior to being incurred, approvals are obtained by an appropriate level of management or those charged with governance and are sufficiently documented.
Reference Number: 2024-011 Prior Year Finding: No Federal Agency: U.S. Department of Defense State Agency: Military Department Federal Program: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing Number: 12.401 Award Number and Year: W912K6-24-2 (10/1/2023 – 9/30/2024) 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. 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 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 Military Department (Department) charged costs to the federal grant prior to the allowable start of the period of performance. The expenditures were incurred from six to twenty-three days prior to the start of the award period. Context: Two of forty transactions selected for testing were incurred prior to the allowable start of the period of performance. Cause: The Department’s procedures were not operating sufficiently to ensure that expenditures charged to the program were incurred within the awards’ period of performance. Internal controls did not prevent or detect the errors. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Questioned costs: $ 4,699, which represents the total of the expenditures incurred prior to the awards’ period of performance. 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: Management agrees with the finding.
Reference Number: 2024-020 Prior Year Finding: 2023-012 Federal Agency: U.S. Department of Education State Agency Name: Bowie State University (BSU) Federal Program: Higher Education Institutional Aid Assistance Listing Number: 84.031B, 84.031E, 84.031K Award Number and Year: P031B220039(10/1/2022-9/30/2024), P031E200007 (10/1/2022-9/30/2024), P031K190021 (10/1/2022-9/30/2024) Compliance Requirement: Allowable Activities/Costs Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Compliance: Per 2 CFR § 200.403, except where otherwise authorized by statute, costs must meet the following general criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award 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. 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). Condition: Time and Effort documentation was not documented and reviewed timely. Questioned costs: None. Context: For all seventeen samples selected for testing, Time and Effort was not documented in a timely manner or reviewed appropriately. Cause: The Institution’s internal controls were not operating effectively to ensure that time and effort reporting was performed and documented in a timely manner in accordance with federal requirements. Effect: Expenditures may be incorrectly charged to the program. Recommendation: We recommend that the Institution strengthen its internal controls to ensure that Time and Effort is documented, and expenditures are reviewed and adjusted for, if necessary, in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.
Reference Number: 2024-021 Prior Year Finding: 2023-013 Federal Agency: U.S. Department of Education State Agency Name: Coppin State University (CSU) Federal Program: Higher Education Institutional Aid Assistance Listing Number: 84.031B, 84.031E Award Number and Year: P031B170054(10/1/2021-9/30/2024), P031B220065(10/1/2022-9/30/2024), P031E200078 (10/1/2022-9/30/2024) Compliance Requirement: Allowable Activities/Costs Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Compliance: Per 2 CFR § 200.403, except where otherwise authorized by statute, costs must meet the following general criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award 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. 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). Condition: Coppin State University (Institution) did not adjust the employee’s payroll costs to reflect the reported effort. We noted that the actual time and effort charged to the grant did not agree to the time and effort report. Questioned costs: $45 Context: For one out of ten samples selected for testing, the payroll calculation did not agree to the employee's time and effort report. Cause: The Institution’s internal controls were not operating effectively to ensure that time and effort reporting was accurate and agreed with supporting documentation. Effect: Expenditures may be incorrectly charged to the program. Recommendation: We recommend that the Institution strengthen its internal controls to ensure that Time and Effort is documented, expenditures are reviewed and adjusted for, if necessary, in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.
Reference Number: 2024-023 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Department of Education Federal Program: Special Education Cluster (IDEA) Assistance Listing Number: 84.027, 84.173 Award Number and Year: H027A230035 (7/1/2023 – 9/30/2024) H173A230089 (7/1/2023 – 9/30/2024) Compliance Requirement: Period of Performance Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance 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. 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 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 Education (Department) charged costs to the federal grant prior to the allowable start of the period of performance. We noted that five of the seven exceptions were incurred from 213 to 92 days prior to the beginning of the period of performance. Context: Seven of eleven transactions selected for testing were incurred prior to the allowable start of the period of performance. Cause: The Department’s procedures were not operating sufficiently to ensure that expenditures charged to the program were incurred within the awards’ period of performance. Internal controls did not prevent or detect the errors. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Questioned costs: $4,411, which represents the total of the expenditures incurred prior to the awards’ period of performance. 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: Management agrees with the finding.
Reference Number: 2024-025 Prior Year Finding: No Federal Agency: Department of Health and Human Services State Agency: Department of Human Services Federal Program: Low-Income Home Energy Assistance Program Assistance Listing Number: 93.568 Award Number and Year: 2401MDLIEA (10/1/2023-9/30/2025) Compliance Requirement: Period of Performance Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance 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. 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 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 Human Services (Department) charged costs to the federal grant prior to the allowable start of the period of performance. The expenditures were incurred from one to twenty-six days prior to the start of the award period. Context: Seventeen of forty transactions selected for testing were incurred prior to the allowable start of the period of performance. Cause: The Department’s procedures were not operating sufficiently to ensure that expenditures charged to the program were incurred within the awards’ period of performance. Internal controls did not prevent or detect the errors. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Questioned costs: $778,473, which represents the total of the expenditures incurred prior to the awards’ period of performance. 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: Management agrees with the finding.
Federal agency: All agencies in the SEFA Assistance Listing Number: See SEFA Award Period: 01/01/2023 to 12/31/2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: The compliance requirements for Federal Assistance Number 93.558 – Temporary Assistance for Needy Families (TANF) State Programs includes a Period of Performance element. The compliance requirement related to period of performance is that a non-federal entity may charge only allowable costs incurred during the approved budget period (also identified as the grant period) of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Allocations of indirect costs are performed once during the year-end closing process based on time study data for the entire year, and when program attendance data for programs that are ran for various increments throughout the year is available. The TANF grant period that was tested as a major program was December 2022 – August 2023. As the grant period ended in September, no costs incurred after that date should be considered major program expenditures. Questioned Costs: Indeterminable. The questioned costs could be considered those indirect costs considered TANF expenditures that were incurred after August 2023. In addition, because the program attendance is used to allocate costs between programs, program attendance after August 2023 may be inappropriate to be considered when allocating those indirect costs to specific programs. Context: Indirect cost allocations are performed once during the year-end closing process by the auditee. Time studies are performed to allocate indirect costs between supporting and program functions. The indirect costs allocated to the program functions are then allocated between individual programs, including federally funded programs, based on the number of participant hours in each program. The time study and program hours used to allocate indirect costs are based on the entire year and not just the major program grant period. In addition, indirect costs that are allocated are incurred during the entire year and not just the major program grant period. Cause: Time and program participation data used to allocate costs are not consistent with the grant period. In addition, the costs that are allocated are not consistent with the grant period. Effect: The single annual allocation of costs means that costs incurred outside the major program grant/budget period are being allocated to the major program. In addition, allocation base data from outside the grant/budget period is being used as a base for the indirect cost allocation. Repeat Finding: No Auditor’s Recommendation: We recommend the auditee perform indirect cost allocations so that the costs and allocation base align with the grant/budget period. Performing the allocation of indirect costs annually may not create an equitable allocation at the individual program level. Views of Responsible Officials and Planned Corrective Actions: We agree that the allocation being performed once annually does not create the most equitable allocation of costs between our individual programs. We will perform our indirect cost allocations more periodically during the course of the fiscal year to ensure that more appropriate times studies and applicable participant hours are being utilized to limit the potential of allocating unrelated indirect costs from the year to individual programs, including the federally funded programs.
Federal agency: All agencies in the SEFA Assistance Listing Number: See SEFA Award Period: 01/01/2023 to 12/31/2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: The compliance requirements for Federal Assistance Number 93.558 – Temporary Assistance for Needy Families (TANF) State Programs includes a Period of Performance element. The compliance requirement related to period of performance is that a non-federal entity may charge only allowable costs incurred during the approved budget period (also identified as the grant period) of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Allocations of indirect costs are performed once during the year-end closing process based on time study data for the entire year, and when program attendance data for programs that are ran for various increments throughout the year is available. The TANF grant period that was tested as a major program was December 2022 – August 2023. As the grant period ended in September, no costs incurred after that date should be considered major program expenditures. Questioned Costs: Indeterminable. The questioned costs could be considered those indirect costs considered TANF expenditures that were incurred after August 2023. In addition, because the program attendance is used to allocate costs between programs, program attendance after August 2023 may be inappropriate to be considered when allocating those indirect costs to specific programs. Context: Indirect cost allocations are performed once during the year-end closing process by the auditee. Time studies are performed to allocate indirect costs between supporting and program functions. The indirect costs allocated to the program functions are then allocated between individual programs, including federally funded programs, based on the number of participant hours in each program. The time study and program hours used to allocate indirect costs are based on the entire year and not just the major program grant period. In addition, indirect costs that are allocated are incurred during the entire year and not just the major program grant period. Cause: Time and program participation data used to allocate costs are not consistent with the grant period. In addition, the costs that are allocated are not consistent with the grant period. Effect: The single annual allocation of costs means that costs incurred outside the major program grant/budget period are being allocated to the major program. In addition, allocation base data from outside the grant/budget period is being used as a base for the indirect cost allocation. Repeat Finding: No Auditor’s Recommendation: We recommend the auditee perform indirect cost allocations so that the costs and allocation base align with the grant/budget period. Performing the allocation of indirect costs annually may not create an equitable allocation at the individual program level. Views of Responsible Officials and Planned Corrective Actions: We agree that the allocation being performed once annually does not create the most equitable allocation of costs between our individual programs. We will perform our indirect cost allocations more periodically during the course of the fiscal year to ensure that more appropriate times studies and applicable participant hours are being utilized to limit the potential of allocating unrelated indirect costs from the year to individual programs, including the federally funded programs.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass‐through entity made the federal award that were authorized by the federal awarding agency or pass‐through entity. Condition: The Organization lacked supporting documentation for non‐payroll expenses. Due to lack of supporting documentation, period of performance could not be verified. Of the sixty (60) nonpayroll transactions examined, ten (10) lacked supporting documentation for review, and 1 expense was for services performed in a prior period. Effect: Management possibly did not expend funds in accordance with the approved detailed lineitem budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: Known questioned costs of $7,674 and likely questioned costs of $34,117 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass‐through entity made the federal award that were authorized by the federal awarding agency or pass‐through entity. Condition: The Organization lacked supporting documentation for non‐payroll expenses. Due to lack of supporting documentation, period of performance could not be verified. Of the sixty (60) nonpayroll transactions examined, ten (10) lacked supporting documentation for review, and 1 expense was for services performed in a prior period. Effect: Management possibly did not expend funds in accordance with the approved detailed lineitem budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: Known questioned costs of $7,674 and likely questioned costs of $34,117 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
Federal Agency: Department of Justice Federal Assistance Listing Number: 16.756 Program: Court Appointed Special Advocates Award Number: 15JDP-21-GK-02762-CASA Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). g) Be adequately documented. See also §200.300 through §200.309. h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: National CASA/GAL allocated expenditures to programs during 2023 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding salaries), we noted in accordance with §200.403(g) that: • 4 of 60 transactions was partially charged in the incorrect fiscal period, though within the period of performance. The cost of these 4 transactions were $5,246. • 2 of 60 transactions had an error in the allocation rate utilized. The cost of these 8 transactions were $33. • 4 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. Cause: National CASA/GAL did not have procedures in place to document, and maintain the documentation of, the review and approval of the allocation methodology and the allocation of costs (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, National CASA/GAL could incorrectly charge expenditures to the federal programs. Known Questioned Costs: $5,279 Likely Questioned Costs: $131,271 Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs in 2023 were $3,612,154. The sample tested consisted of 60 transactions totaling $145,247. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: 2022-004 and 2022-008. Recommendation: We recommend that policies and procedures be updated to ensure underlying support, as well as support for allocations, is appropriately maintained as required by §200.403. Views of Responsible Officials: Management concurs with the finding that documentation of support and allocation of costs should be maintained. Policies and procedures were enhanced in 2023 and through 2024 to ensure compliance.
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.
Federal agency: All agencies in the SEFA Assistance Listing Number: See SEFA Award Period: 01/01/2023 to 12/31/2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: The compliance requirements for Federal Assistance Number 93.558 – Temporary Assistance for Needy Families (TANF) State Programs includes a Period of Performance element. The compliance requirement related to period of performance is that a non-federal entity may charge only allowable costs incurred during the approved budget period (also identified as the grant period) of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Allocations of indirect costs are performed once during the year-end closing process based on time study data for the entire year, and when program attendance data for programs that are ran for various increments throughout the year is available. The TANF grant period that was tested as a major program was December 2022 – August 2023. As the grant period ended in September, no costs incurred after that date should be considered major program expenditures. Questioned Costs: Indeterminable. The questioned costs could be considered those indirect costs considered TANF expenditures that were incurred after August 2023. In addition, because the program attendance is used to allocate costs between programs, program attendance after August 2023 may be inappropriate to be considered when allocating those indirect costs to specific programs. Context: Indirect cost allocations are performed once during the year-end closing process by the auditee. Time studies are performed to allocate indirect costs between supporting and program functions. The indirect costs allocated to the program functions are then allocated between individual programs, including federally funded programs, based on the number of participant hours in each program. The time study and program hours used to allocate indirect costs are based on the entire year and not just the major program grant period. In addition, indirect costs that are allocated are incurred during the entire year and not just the major program grant period. Cause: Time and program participation data used to allocate costs are not consistent with the grant period. In addition, the costs that are allocated are not consistent with the grant period. Effect: The single annual allocation of costs means that costs incurred outside the major program grant/budget period are being allocated to the major program. In addition, allocation base data from outside the grant/budget period is being used as a base for the indirect cost allocation. Repeat Finding: No Auditor’s Recommendation: We recommend the auditee perform indirect cost allocations so that the costs and allocation base align with the grant/budget period. Performing the allocation of indirect costs annually may not create an equitable allocation at the individual program level. Views of Responsible Officials and Planned Corrective Actions: We agree that the allocation being performed once annually does not create the most equitable allocation of costs between our individual programs. We will perform our indirect cost allocations more periodically during the course of the fiscal year to ensure that more appropriate times studies and applicable participant hours are being utilized to limit the potential of allocating unrelated indirect costs from the year to individual programs, including the federally funded programs.
Federal agency: All agencies in the SEFA Assistance Listing Number: See SEFA Award Period: 01/01/2023 to 12/31/2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: The compliance requirements for Federal Assistance Number 93.558 – Temporary Assistance for Needy Families (TANF) State Programs includes a Period of Performance element. The compliance requirement related to period of performance is that a non-federal entity may charge only allowable costs incurred during the approved budget period (also identified as the grant period) of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Allocations of indirect costs are performed once during the year-end closing process based on time study data for the entire year, and when program attendance data for programs that are ran for various increments throughout the year is available. The TANF grant period that was tested as a major program was December 2022 – August 2023. As the grant period ended in September, no costs incurred after that date should be considered major program expenditures. Questioned Costs: Indeterminable. The questioned costs could be considered those indirect costs considered TANF expenditures that were incurred after August 2023. In addition, because the program attendance is used to allocate costs between programs, program attendance after August 2023 may be inappropriate to be considered when allocating those indirect costs to specific programs. Context: Indirect cost allocations are performed once during the year-end closing process by the auditee. Time studies are performed to allocate indirect costs between supporting and program functions. The indirect costs allocated to the program functions are then allocated between individual programs, including federally funded programs, based on the number of participant hours in each program. The time study and program hours used to allocate indirect costs are based on the entire year and not just the major program grant period. In addition, indirect costs that are allocated are incurred during the entire year and not just the major program grant period. Cause: Time and program participation data used to allocate costs are not consistent with the grant period. In addition, the costs that are allocated are not consistent with the grant period. Effect: The single annual allocation of costs means that costs incurred outside the major program grant/budget period are being allocated to the major program. In addition, allocation base data from outside the grant/budget period is being used as a base for the indirect cost allocation. Repeat Finding: No Auditor’s Recommendation: We recommend the auditee perform indirect cost allocations so that the costs and allocation base align with the grant/budget period. Performing the allocation of indirect costs annually may not create an equitable allocation at the individual program level. Views of Responsible Officials and Planned Corrective Actions: We agree that the allocation being performed once annually does not create the most equitable allocation of costs between our individual programs. We will perform our indirect cost allocations more periodically during the course of the fiscal year to ensure that more appropriate times studies and applicable participant hours are being utilized to limit the potential of allocating unrelated indirect costs from the year to individual programs, including the federally funded programs.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass‐through entity made the federal award that were authorized by the federal awarding agency or pass‐through entity. Condition: The Organization lacked supporting documentation for non‐payroll expenses. Due to lack of supporting documentation, period of performance could not be verified. Of the sixty (60) nonpayroll transactions examined, ten (10) lacked supporting documentation for review, and 1 expense was for services performed in a prior period. Effect: Management possibly did not expend funds in accordance with the approved detailed lineitem budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: Known questioned costs of $7,674 and likely questioned costs of $34,117 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR sections 200.308 200.309 and 200.403(h)), the Organization may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass‐through entity made the federal award that were authorized by the federal awarding agency or pass‐through entity. Condition: The Organization lacked supporting documentation for non‐payroll expenses. Due to lack of supporting documentation, period of performance could not be verified. Of the sixty (60) nonpayroll transactions examined, ten (10) lacked supporting documentation for review, and 1 expense was for services performed in a prior period. Effect: Management possibly did not expend funds in accordance with the approved detailed lineitem budget and grant agreement and possibly expended funds in the incorrect period of performance. Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: Known questioned costs of $7,674 and likely questioned costs of $34,117 for Healthy Start. Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating period of performance.
Federal Agency: Department of Justice Federal Assistance Listing Number: 16.756 Program: Court Appointed Special Advocates Award Number: 15JDP-21-GK-02762-CASA Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: a) Be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). g) Be adequately documented. See also §200.300 through §200.309. h) Cost must be incurred during the approved budget period. The federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: National CASA/GAL allocated expenditures to programs during 2023 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding salaries), we noted in accordance with §200.403(g) that: • 4 of 60 transactions was partially charged in the incorrect fiscal period, though within the period of performance. The cost of these 4 transactions were $5,246. • 2 of 60 transactions had an error in the allocation rate utilized. The cost of these 8 transactions were $33. • 4 of 60 transactions lacked documentation of review and approval of the allocation of costs made through journal entries. Cause: National CASA/GAL did not have procedures in place to document, and maintain the documentation of, the review and approval of the allocation methodology and the allocation of costs (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, National CASA/GAL could incorrectly charge expenditures to the federal programs. Known Questioned Costs: $5,279 Likely Questioned Costs: $131,271 Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs in 2023 were $3,612,154. The sample tested consisted of 60 transactions totaling $145,247. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: 2022-004 and 2022-008. Recommendation: We recommend that policies and procedures be updated to ensure underlying support, as well as support for allocations, is appropriately maintained as required by §200.403. Views of Responsible Officials: Management concurs with the finding that documentation of support and allocation of costs should be maintained. Policies and procedures were enhanced in 2023 and through 2024 to ensure compliance.
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.