Reference Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Education Department: Portsmouth Public Schools (PPS) Federal Program: Special Education Cluster (IDEA) Assistance Listing: 84.027, 84.173 Federal Award Identification Number and Year: None, 2021, 2022, 2023 Pass-Through Entity: Commonwealth of Virginia Department of Education Pass-Through Award Number and Period: H027A200107 (7/1/20-9/30/22) H027A210107 (7/1/21-9/30/23) H027X210107 (7/1/21-9/30/23) H027A220107 (4/17/23-9/30/23) H173A200107 (7/1/20-9/30/22) H173A210107 (7/1/21-9/30/23) H173X210107 (7/1/21-9/30/23) Compliance Requirement: Allowable Costs/Cost Principles (Time and Effort Certifications) Type of Finding: Material Weakness in Internal Control over Compliance, Maternal Non-Compliance Criteria or specific requirement: Compliance – Per 2 CFR section 403, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also § 200.306(b). (f) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Control – Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: PPS was unable to provide documentation supporting time and effort for employee’s salary charged to the grant. We were unable to support the allowable salary reported on the grant due to lack of time and effort certification. Context For 13 out of 40 employee’s salary selected for testing were not supported by time and effort certification. Questioned costs: $30,763, represents the employee’s salary charged to the federal program and not supported by time and effort certification. Cause: PPS did not maintain documentation supporting time and effort for employee pay charged to the grant. Effect: Failure to adhere to allowable cost requirements may result in PPS charging expenditures to the program that are not allowable. Recommendation: We recommend that PPS enhance its procedures and internal controls to ensure that it retains documentation supporting time and effort on federal grants and that this documentation is available for audit purposes. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Education Department: Portsmouth Public Schools (PPS) Federal Program: Special Education Cluster (IDEA) Assistance Listing: 84.027, 84.173 Federal Award Identification Number and Year: None, 2021 Pass-Through Entity: Commonwealth of Virginia Department of Education Pass-Through Award Number and Period: H027A200107 (7/1/20-9/30/22) 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)). Control – Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition PPS charged program costs to the grant after the period of performance period ended. We noted that an invoice for $176.05, for goods/services received in October 2022, wase charged to the federal grant ending September 2022. PPS did not obtain prior approval or an extension from the awarding agency before charging the grant. Context: One out of twenty-one samples selected for testing was charged to the grant after period of performance. Questioned costs: $176.05, represents the costs charged to the program after the period of performance. Cause: PPS did not consistently monitor the period of performance for a federal award to ensure that costs were only charged during the allowed period. Effect: PPS expensing of funds out of the period of performance may result in noncompliance and questioned costs from the grantor. Recommendation: We recommend that PPS enhance its procedures and internal controls to ensure that expenditures are not charged to federal awards during the period of performance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Education Department: Portsmouth Public Schools (PPS) Federal Program: Special Education Cluster (IDEA) Assistance Listing: 84.027, 84.173 Federal Award Identification Number and Year: None, 2021 Pass-Through Entity: Commonwealth of Virginia Department of Education Pass-Through Award Number and Period: H027A200107 (7/1/20-9/30/22) 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)). Control – Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition PPS charged program costs to the grant after the period of performance period ended. We noted that an invoice for $176.05, for goods/services received in October 2022, wase charged to the federal grant ending September 2022. PPS did not obtain prior approval or an extension from the awarding agency before charging the grant. Context: One out of twenty-one samples selected for testing was charged to the grant after period of performance. Questioned costs: $176.05, represents the costs charged to the program after the period of performance. Cause: PPS did not consistently monitor the period of performance for a federal award to ensure that costs were only charged during the allowed period. Effect: PPS expensing of funds out of the period of performance may result in noncompliance and questioned costs from the grantor. Recommendation: We recommend that PPS enhance its procedures and internal controls to ensure that expenditures are not charged to federal awards during the period of performance. Views of responsible officials: Management agrees with the finding.
Finding number: 2023-012 Federal agency: U.S. Department of Treasury Programs: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance listing #: 21.027 Award year: 2023 Compliance requirement: Allowable Costs Criteria According to 2 CFR 200.403 Factors affecting allowability of costs: Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Condition The Federal Government requires that costs must be adequately documented and must be incurred during the approved budget period. During our testing, we noted the College failed to provide a copy of check or ACH payment information for 1 expenditure, out of a sample of 5. As a result, the College was unable to provide the proof of payment to support the expenditure is an allowable cost. Our sample was not, and was not intended to be, statistically valid. Cause The College failed to have the proper internal controls in place to keep the proof of payment to support the expenditure that was reimbursed from the federal award. Effect The invoice that was reimbursed from the federal award may not be an allowable cost. Questioned Costs $1,655 Identification as a Repeat Finding, if applicable Not applicable. Recommendation The College should implement internal control procedures to verify that reimbursement requests are only submitted for invoices that have been paid. View of Responsible Officials The College agrees with the finding.
2023-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Compliance Finding and Material Weakness in Internal Controls Over Compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Tuition invoices and payroll costs were charged to a 2023 grant that were for services rendered prior to the grant start date. Cause: The School did not review manual journal entries for period of performance compliance when reclassifying grant expenditures from other accounts. Effect: The School was not compliant with period of performance requirements of the grant. Questioned Costs: $225,827.29 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to review all manual journal entries for period of performance compliance before posting to the general ledger. Views of Responsible Official: Management agrees with the finding.
2023-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Compliance Finding and Material Weakness in Internal Controls Over Compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Tuition invoices and payroll costs were charged to a 2023 grant that were for services rendered prior to the grant start date. Cause: The School did not review manual journal entries for period of performance compliance when reclassifying grant expenditures from other accounts. Effect: The School was not compliant with period of performance requirements of the grant. Questioned Costs: $225,827.29 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to review all manual journal entries for period of performance compliance before posting to the general ledger. Views of Responsible Official: Management agrees with the finding.
2023-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Compliance Finding and Material Weakness in Internal Controls Over Compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Tuition invoices and payroll costs were charged to a 2023 grant that were for services rendered prior to the grant start date. Cause: The School did not review manual journal entries for period of performance compliance when reclassifying grant expenditures from other accounts. Effect: The School was not compliant with period of performance requirements of the grant. Questioned Costs: $225,827.29 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to review all manual journal entries for period of performance compliance before posting to the general ledger. Views of Responsible Official: Management agrees with the finding.
2023-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Compliance Finding and Material Weakness in Internal Controls Over Compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Tuition invoices and payroll costs were charged to a 2023 grant that were for services rendered prior to the grant start date. Cause: The School did not review manual journal entries for period of performance compliance when reclassifying grant expenditures from other accounts. Effect: The School was not compliant with period of performance requirements of the grant. Questioned Costs: $225,827.29 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to review all manual journal entries for period of performance compliance before posting to the general ledger. Views of Responsible Official: Management agrees with the finding.
2023-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Compliance Finding and Material Weakness in Internal Controls Over Compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Tuition invoices and payroll costs were charged to a 2023 grant that were for services rendered prior to the grant start date. Cause: The School did not review manual journal entries for period of performance compliance when reclassifying grant expenditures from other accounts. Effect: The School was not compliant with period of performance requirements of the grant. Questioned Costs: $225,827.29 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to review all manual journal entries for period of performance compliance before posting to the general ledger. Views of Responsible Official: Management agrees with the finding.
2023-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Compliance Finding and Material Weakness in Internal Controls Over Compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Tuition invoices and payroll costs were charged to a 2023 grant that were for services rendered prior to the grant start date. Cause: The School did not review manual journal entries for period of performance compliance when reclassifying grant expenditures from other accounts. Effect: The School was not compliant with period of performance requirements of the grant. Questioned Costs: $225,827.29 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to review all manual journal entries for period of performance compliance before posting to the general ledger. Views of Responsible Official: Management agrees with the finding.
2023-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Compliance Finding and Material Weakness in Internal Controls Over Compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Condition: Tuition invoices and payroll costs were charged to a 2023 grant that were for services rendered prior to the grant start date. Cause: The School did not review manual journal entries for period of performance compliance when reclassifying grant expenditures from other accounts. Effect: The School was not compliant with period of performance requirements of the grant. Questioned Costs: $225,827.29 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to review all manual journal entries for period of performance compliance before posting to the general ledger. Views of Responsible Official: Management agrees with the finding.
Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Public Health Federal Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Assistance Listing Number: 10.557 Award Number and Year: 224MA702WI003 (10/1/2021 – 9/30/2022) Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Public Health (Department) charged costs to the federal grant after the end of the grant’s allowable period of performance. Context: One of forty expenditure transactions selected for testing was incurred after the end of the grant’s period of performance. The period of performance ended on September 30, 2022 and the expenditure was incurred on October 10, 2022. Funds were not encumbered prior to the end of the period of performance. Cause: The Department’s procedures and internal controls were not operating sufficiently to ensure that expenditures were charged to the correct grant year. The Department had a contract in place with the vendor but did not encumber funds for the transaction prior to September 30, 2022. Therefore, the expenditures should have been charged to the FFY2023 grant period. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended and/or obligated after the allowable period of performance. Questioned costs: None above reportable threshold. 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. The Department should ensure that it encumbers funds prior to the end of the period of performance when appropriate. Views of responsible officials: Management agrees with the finding.
Federal Agency: Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027 Award Year: 2023 Compliance Requirement: Period of Performance Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). 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 2023 IDEA special education grant. Since these costs occurred outside of the authorized period of performance, they are not eligible to be charged to that grant. Cause The School District has not established adequate procedures to ensure costs charged to the grant are within the authorized period of performance. Effect or Potential Effect Due to the weakness in internal control noted above, there are known and questioned costs reported related to salaries and contracted services incurred prior to the period of performance and charged to the grant. Questioned Costs 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 incurred for a grant prior to the authorized period of performance. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2023-005 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Invoices were charged for services performed prior to the award approval dates by the pass-through agency. Cause: Invoices were not provided in a timely manner by vendors nor were services dates properly identified by the Town. Numerous payroll entries were recorded to correct prior year findings and close out grants with some payroll being outside the period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,266.50 Repeat Finding from Prior Year: Finding 2022-002. Recommendation: The Town should implement procedures to properly monitor award approval dates to ensure that goods and services charged to federal grants occur during the period of performance. Views of Responsible Official: Management agrees with the finding.
2023-005 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Invoices were charged for services performed prior to the award approval dates by the pass-through agency. Cause: Invoices were not provided in a timely manner by vendors nor were services dates properly identified by the Town. Numerous payroll entries were recorded to correct prior year findings and close out grants with some payroll being outside the period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,266.50 Repeat Finding from Prior Year: Finding 2022-002. Recommendation: The Town should implement procedures to properly monitor award approval dates to ensure that goods and services charged to federal grants occur during the period of performance. Views of Responsible Official: Management agrees with the finding.
2023-005 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Invoices were charged for services performed prior to the award approval dates by the pass-through agency. Cause: Invoices were not provided in a timely manner by vendors nor were services dates properly identified by the Town. Numerous payroll entries were recorded to correct prior year findings and close out grants with some payroll being outside the period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,266.50 Repeat Finding from Prior Year: Finding 2022-002. Recommendation: The Town should implement procedures to properly monitor award approval dates to ensure that goods and services charged to federal grants occur during the period of performance. Views of Responsible Official: Management agrees with the finding.
2023-005 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Invoices were charged for services performed prior to the award approval dates by the pass-through agency. Cause: Invoices were not provided in a timely manner by vendors nor were services dates properly identified by the Town. Numerous payroll entries were recorded to correct prior year findings and close out grants with some payroll being outside the period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,266.50 Repeat Finding from Prior Year: Finding 2022-002. Recommendation: The Town should implement procedures to properly monitor award approval dates to ensure that goods and services charged to federal grants occur during the period of performance. Views of Responsible Official: Management agrees with the finding.
2023-005 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Invoices were charged for services performed prior to the award approval dates by the pass-through agency. Cause: Invoices were not provided in a timely manner by vendors nor were services dates properly identified by the Town. Numerous payroll entries were recorded to correct prior year findings and close out grants with some payroll being outside the period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,266.50 Repeat Finding from Prior Year: Finding 2022-002. Recommendation: The Town should implement procedures to properly monitor award approval dates to ensure that goods and services charged to federal grants occur during the period of performance. Views of Responsible Official: Management agrees with the finding.
2023-005 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Invoices were charged for services performed prior to the award approval dates by the pass-through agency. Cause: Invoices were not provided in a timely manner by vendors nor were services dates properly identified by the Town. Numerous payroll entries were recorded to correct prior year findings and close out grants with some payroll being outside the period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,266.50 Repeat Finding from Prior Year: Finding 2022-002. Recommendation: The Town should implement procedures to properly monitor award approval dates to ensure that goods and services charged to federal grants occur during the period of performance. Views of Responsible Official: Management agrees with the finding.
2023-005 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Invoices were charged for services performed prior to the award approval dates by the pass-through agency. Cause: Invoices were not provided in a timely manner by vendors nor were services dates properly identified by the Town. Numerous payroll entries were recorded to correct prior year findings and close out grants with some payroll being outside the period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,266.50 Repeat Finding from Prior Year: Finding 2022-002. Recommendation: The Town should implement procedures to properly monitor award approval dates to ensure that goods and services charged to federal grants occur during the period of performance. Views of Responsible Official: Management agrees with the finding.
2023-005 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Invoices were charged for services performed prior to the award approval dates by the pass-through agency. Cause: Invoices were not provided in a timely manner by vendors nor were services dates properly identified by the Town. Numerous payroll entries were recorded to correct prior year findings and close out grants with some payroll being outside the period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,266.50 Repeat Finding from Prior Year: Finding 2022-002. Recommendation: The Town should implement procedures to properly monitor award approval dates to ensure that goods and services charged to federal grants occur during the period of performance. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
2023-006 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster – ALN(s) 84.027 & 84.173 COVID-19 - Special Education Cluster – ALN(s) 84.027X & 84.173X Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.309 of the Uniform Guidance, a non-federal entity may charge to a Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Condition: Time and effort certifications were not maintained for grant employees’ whose salaries and wages were not supported by detailed time records. Cause: The School did not assign the preparation of federal payroll documentation to any employee. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $121,309.68 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Time and effort certifications should be obtained on a semi-annual basis for employees whose work is solely for a single grant and on a monthly basis for employees whose work involves more than one grant or activity. Views of Responsible Official: Management agrees with the finding.
Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.
Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.
Finding 2023-004 – Period of Performance Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CBB04278; 45CBB03514; 45CBB00648 Award Period: 07/01/2022 – 06/30/2023 Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $7,253 Context: Four (4) of the sixteen (16) transactions selected for testing. Cause: The Organization did not have a control in place to ensure the proper cut-off of expense charged to federal awards. Effect: The Organization allocated unallowable costs to the federal grant. Repeat Finding: No Recommendation: Management should review and revise its process for allocating costs to federal grants to include additional layers of review related to the cut-off of grant expenditures. Particular attention should be focused on the first and last month of the grant budget period. Views of responsible officials: There is no disagreement with the audit finding.
2023-006 Non-compliance with Compliance Requirements Program Name/ Assistance Listing Number: 93. 959 Block Grants for Prevention and Treatment of Substance Abuse and 93.788 Multiple Approach Response Strategies (MARS) Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: Per 2 CFR §200.305(b), non-Federal entities are responsible for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. According to 2 CFR §200.403, costs must meet the following general criteria to be allowable under Federal awards: (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award concerning types or amounts of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (g) Be adequately documented. See also 2 CFR §200.300 through 200.309 of this part. (h) Costs must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carryforward unobligated balances to subsequent budget periods pursuant to 2 CFR §200.308(e)(3). Condition: During the review of the schedule of expenditures of federal awards, the auditor noted the following conditions: 1. Non-Conforming Expenditures: An expenditure under the MARS Carry Over did not conform to the limitations set forth in the federal award budget. Specifically, $20,892 was charged for Garage Repairs, whereas the grant budget for equipment was only $1,200, designated specifically for two software purchases at $600 each. 2. Inadequate Documentation: a) The FASD Grant had a period that ended on March 14, 2023. Although the grant period was extended, this extension was not documented, b) A $26,383 FASD expenditure was reallocated to MARS 2.0 Carry Over without substantialjustification for the reclassification, and c) An adjustment of $24,044 was made from MARS 2.0 Carry Over FY 2022 without adequate supporting documentation. 3. Expenditures Outside the Approved Grant Period: a) the FASD total award of $340,000 was reported as fully expended in the 2023 fiscal year-end expenditure report (“Close-Out Report”) submitted to the Grants and Funding Management System on January 31, 2024. However, the Schedule of Federal Expenditure showed only $312,707 in expenditures. The remaining $27, 293 was indicated as a carryover for FY 2024. Of the $312,707 in expenditures, $71,277 were incurred after March 14, 2023, with only $21,395 falling within the 45-day closeout period following that date, b) $26,800 in unallowable costs were incurred under the MARS 2.0 Carry Over 45 days after the performance period ended on September 29, 2022, specifically for payroll processing, and c) $1,813 in costs were incurred before the performance period for the “Mars One-Pill Can Kill” grant dated February 1, 2023 to September 29, 2023. There was no prior grant. 4. Misclassification: $2,010 in MARS 3.0 expenditures were incorrectly classified under FASD. Cause of Condition: Insufficient understanding of program requirements. There is no formal monitoring of program expenditures on a periodic basis to ensure that the Organization’s expenditures and activities align with their grant budget and period of performance. Inconsistent adherence to record retention policies, resulting from the temporary hybrid working-from-home arrangements due to the pandemic, has led to insufficient support for all federal expenditures. The Organization lacks written policies and procedures for allocating expenditures across different programs. Effect: The current procedures for administering Federal funds are inadequately designed to ensure that costs and activities are managed in a manner consistent with the underlying agreements and the terms and conditions of the Federal award. These deficiencies could lead to misstatements in the SEFA that are not corrected promptly and could result in the charging of unallowable costs. Questioned Cost: $179,117 Recommendation: We recommend the following actions: 1. Training: Program administrators should receive adequatetraining and acquire knowledge of the compliancerequirements for each specific program to ensure adherence to these requirements. 2. Periodic Program Monitoring: The organization should establish a periodic review process for each program budget to ensure alignment with each line item in the budget. 3. Formal Procedures: The organization should document its procedures for expense allocation to ensure consistency timeliness, and accuracy. 4. Adequate Staffing: The organization should ensure that processes are staffed with knowledgeable personnel capableof reviewing and adhering to established policies and procedures. Description of the Nature and Extent of Issues Reported: We consider the following materiality for consideration of material noncompliance for the major program 93.959 at 5% of the total awards expended amounting to $51,253. View of Responsible Official: Management agrees with the finding and will implement corrective action.
Federal Agency: Department of Health and Human Services Federal Program Name: Child Care and Development Programs Assistance Listing Number: 93.575 Federal Award Identification Number and Year: 19-S225-00-2 – 2022 Pass-Through Agency: California Department of Education Pass-Through Number: 10163 Award Period: 7/1/2022-6/30/2023 Compliance Requirement Affected: H - period of availability/performance Type of Finding: Significant Deficiency Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: During test of non-payroll expenditures charged to the Child Care and Development Programs, one of the supporting documents indicated that costs in the amount of $1,625 charged to program was paid in the award period, but was incurred prior to the award period. Cause: The invoice was paid in the award year and internal controls over compliance failed to identify the ineligibility of the expense. Effect: $1,625 of ineligible expenses were charged to the federal program. Questioned Costs: $1,625 of known and likely cost. Repeat finding: Not a repeat finding. Recommendation: We recommend the Organization review its internal control processes over compliance to ensure adequate review of period of performance. Views of responsible officials and Corrective Action Plan: Background and Contributing Factors: At the time of the expenditure in question, our organization was relying on Charter Impact to manage our accounting and grant reporting. Unfortunately, Charter Impact did not fulfill its contractual obligations, including timely submission of grant reports and ensuring compliance with federal guidelines. Their failure to submit accurate and timely grant reports, contributed to the lapse in internal controls that led to the ineligible expense being charged to the federal program. 2023-002 Internal Control over Compliance (Continued) 500 Corrective Action Plan: 1. Implementation of Sage Accounting Software: We have since implemented a comprehensive financial accounting software system, Sage, which allows us to track expenditures more accurately and ensure compliance with federal grant requirements. The system includes built-in safeguards to flag non-compliant expenditures. 2. Review and Strengthening of Internal Controls: Life Source International Charter School will be implementing additional internal control systems & processes that include an additional review of back up documents before monthly reports are filed. A copy of all backup documents in support of all monthly reports will be kept at both Life Source International Charter School and the outside entities providing services and making reports on behalf of Life Source International Charter School. 3. Staff Training and Capacity Building: Our staff has received training on federal grant compliance, including the specific criteria governing the period of performance and allowable costs under federal awards. Additionally, with the Sage system in place, staff are now better equipped to manage compliance and reporting accurately. 4. Commitment to Ongoing Compliance: We are committed to continually improving our internal control processes to ensure compliance with all federal regulations. Findings and Questioned Costs – State Compliance There were no findings or questioned costs related to state awards for June 30, 2023.
DEPARTMENT OF REHABILITATION SERVICES PERIOD OF PERFORMANCE Significant Deficiency 2023-007 Strengthen Controls to Ensure Compliance with the Period of Performance for the Social Security Disability Insurance Program. ALN Number(s) 96.001 Social Security-Disability Insurance 96.006 Supplemental Security Income Federal Award No. 2104MSD100 2204MSD100 2304MSD100 Questioned Costs $13,517 Criteria Per the Code of Federal Regulations (2 CFR 200.308, 200.309, and 200.403(h)), A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. A period of performance may contain one or more budget periods. Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: “Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition Program expenditures were not charged to the grant within the period of performance. We identified the following: • Two instances in which the expenditure was charged to the grant prior to the start of the grant, • Three instances in which the expenditure was charged after the grant’s end date. Cause The Department charging the grants outside of the period of performance was due to an error that was not identified during the review process. In addition, one expenditure supported costs for an annual agreement in which the service period started in one grant period and ended in another grant period. The Department elected to charge the costs to the grant starting after to expenditure incurred date, since most of the service would occur during that grant’s period. Effect The grantor may deem the costs charged outside of the period of performance as unallowable. Recommendation We recommend that the department enhance its internal controls to ensure all costs are incurred within the period of performance specified in the notice of award. Repeat Finding No. Statistically Valid No.
Finding 2023-004 – Period of Performance Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CBB04278; 45CBB03514; 45CBB00648 Award Period: 07/01/2022 – 06/30/2023 Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $7,253 Context: Four (4) of the sixteen (16) transactions selected for testing. Cause: The Organization did not have a control in place to ensure the proper cut-off of expense charged to federal awards. Effect: The Organization allocated unallowable costs to the federal grant. Repeat Finding: No Recommendation: Management should review and revise its process for allocating costs to federal grants to include additional layers of review related to the cut-off of grant expenditures. Particular attention should be focused on the first and last month of the grant budget period. Views of responsible officials: There is no disagreement with the audit finding.
Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - Illinois Department of Public Health (38080704K and 38080714K) & Illinois Department of Healthcare and Family Services (ARPA231010 and ARPA231002) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition - The Organization's controls did not identify expenses submitted to the State of Illinois, for reimbursement, were outside of the period of performance. Questioned Costs - $3,441,315 Identification of How Questioned Costs Were Computed - PM obtained the entire list of expenses submitted to the State of Illinois to assess the amount of questioned costs. The listing submitted to the State of Illinois was filtered to show the invoices that were outside of the period of performance. Context - In our testing of 40 allowability samples, we identified 12 invoices whereby the expense was incurred outside the period of performance, i.e., July 1, 2022 - June 30, 2023. As noted above, PM filtered the complete listing of expenses charged to the grant and discovered that $3,441,315 was charged to grant and outside of the period of performance. The questioned costs are included in the approximate $13.5M reported on the SEFA for the year ended June 30, 2023 under ALN 21.027. Cause and Effect - The lack of effective period of performance controls did not identify invoices that were outside the period of performance. The lack of controls resulted in a material amount of questioned costs and an opinion modification of 21.027, COVID 19 Coronavirus State and Local Fiscal Recovery Funds. Recommendation - As the grant period as ended for the grant, we recommend that the Organization work with the funding agency to remedy the noncompliance. In addition, we recommend that the Organization reassess its period of performance controls to identify where enhancements or additional controls are needed. Views of Responsible Officials and Corrective Action Plan - Background: Sinai began the process of risk assessment in the government grants area at the end of 2022. At that time, Sinai engaged outside counsel to assist in this process. In December of 2023, Sinai created the Office of Government Grant Administration (OGGA) and developed a comprehensive grant compliance policy and procedure. The Audit and Compliance Committee of the Board was updated on this initiative. In 2024, the OGGA created a Grant Compliance Manual which sets forth processes and procedures in grant management to ensure compliance with government regulations. Unfortunately, these controls were not implemented until after the relevant time period at issue in this audit. In 2025, Sinai is continuing to improve its compliance procedures with respect to government grants, and has developed the following plan: 1. Working Group: Sinai will implement a process of convening a Working Group for each government grant, which will consist of a representative from Finance, the OGGA, and the stakeholder involved (i.e., nursing, medicine, etc.) The Working group will be responsible for, among other things, ensuring that that the reported qualifying expenditures are incurred during the period of performance of the grant. In other words, allowable costs will be discussed early in the process, so that there is fulsome understanding among the key individuals involved. 2. Record-Keeping: The OGGA will also establish shared folders to house all of the pertinent documentation relative to the grant. 3. Invoice/Supporting Documentation Review. The Grant Accounting Manager will review all invoices and other supportive documentation to ensure that allowable costs are submitted for reimbursement. This compliance check will be completed prior to submission of the documentation for reimbursement. Monthly reviews of these activities will be performed by the Grant Accountant, the Compliance Grant Manager, and other OGGA staff as needed. Proactive review to prevent or resolve issues in the upcoming month’s billings should be pursued. 4. Annual Assessment. The Chief Compliance Officer, with the assistance of the General Counsel, will meet with the OGGA team annually to assess procedures and risk controls; a report of this assessment will be made to the Audit and Compliance Committee of the Board of Directors
Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - Illinois Department of Public Health (38080704K and 38080714K) & Illinois Department of Healthcare and Family Services (ARPA231010 and ARPA231002) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition - The Organization's controls did not identify expenses submitted to the State of Illinois, for reimbursement, were outside of the period of performance. Questioned Costs - $3,441,315 Identification of How Questioned Costs Were Computed - PM obtained the entire list of expenses submitted to the State of Illinois to assess the amount of questioned costs. The listing submitted to the State of Illinois was filtered to show the invoices that were outside of the period of performance. Context - In our testing of 40 allowability samples, we identified 12 invoices whereby the expense was incurred outside the period of performance, i.e., July 1, 2022 - June 30, 2023. As noted above, PM filtered the complete listing of expenses charged to the grant and discovered that $3,441,315 was charged to grant and outside of the period of performance. The questioned costs are included in the approximate $13.5M reported on the SEFA for the year ended June 30, 2023 under ALN 21.027. Cause and Effect - The lack of effective period of performance controls did not identify invoices that were outside the period of performance. The lack of controls resulted in a material amount of questioned costs and an opinion modification of 21.027, COVID 19 Coronavirus State and Local Fiscal Recovery Funds. Recommendation - As the grant period as ended for the grant, we recommend that the Organization work with the funding agency to remedy the noncompliance. In addition, we recommend that the Organization reassess its period of performance controls to identify where enhancements or additional controls are needed. Views of Responsible Officials and Corrective Action Plan - Background: Sinai began the process of risk assessment in the government grants area at the end of 2022. At that time, Sinai engaged outside counsel to assist in this process. In December of 2023, Sinai created the Office of Government Grant Administration (OGGA) and developed a comprehensive grant compliance policy and procedure. The Audit and Compliance Committee of the Board was updated on this initiative. In 2024, the OGGA created a Grant Compliance Manual which sets forth processes and procedures in grant management to ensure compliance with government regulations. Unfortunately, these controls were not implemented until after the relevant time period at issue in this audit. In 2025, Sinai is continuing to improve its compliance procedures with respect to government grants, and has developed the following plan: 1. Working Group: Sinai will implement a process of convening a Working Group for each government grant, which will consist of a representative from Finance, the OGGA, and the stakeholder involved (i.e., nursing, medicine, etc.) The Working group will be responsible for, among other things, ensuring that that the reported qualifying expenditures are incurred during the period of performance of the grant. In other words, allowable costs will be discussed early in the process, so that there is fulsome understanding among the key individuals involved. 2. Record-Keeping: The OGGA will also establish shared folders to house all of the pertinent documentation relative to the grant. 3. Invoice/Supporting Documentation Review. The Grant Accounting Manager will review all invoices and other supportive documentation to ensure that allowable costs are submitted for reimbursement. This compliance check will be completed prior to submission of the documentation for reimbursement. Monthly reviews of these activities will be performed by the Grant Accountant, the Compliance Grant Manager, and other OGGA staff as needed. Proactive review to prevent or resolve issues in the upcoming month’s billings should be pursued. 4. Annual Assessment. The Chief Compliance Officer, with the assistance of the General Counsel, will meet with the OGGA team annually to assess procedures and risk controls; a report of this assessment will be made to the Audit and Compliance Committee of the Board of Directors
Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - Illinois Department of Public Health (38080704K and 38080714K) & Illinois Department of Healthcare and Family Services (ARPA231010 and ARPA231002) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition - The Organization's controls did not identify expenses submitted to the State of Illinois, for reimbursement, were outside of the period of performance. Questioned Costs - $3,441,315 Identification of How Questioned Costs Were Computed - PM obtained the entire list of expenses submitted to the State of Illinois to assess the amount of questioned costs. The listing submitted to the State of Illinois was filtered to show the invoices that were outside of the period of performance. Context - In our testing of 40 allowability samples, we identified 12 invoices whereby the expense was incurred outside the period of performance, i.e., July 1, 2022 - June 30, 2023. As noted above, PM filtered the complete listing of expenses charged to the grant and discovered that $3,441,315 was charged to grant and outside of the period of performance. The questioned costs are included in the approximate $13.5M reported on the SEFA for the year ended June 30, 2023 under ALN 21.027. Cause and Effect - The lack of effective period of performance controls did not identify invoices that were outside the period of performance. The lack of controls resulted in a material amount of questioned costs and an opinion modification of 21.027, COVID 19 Coronavirus State and Local Fiscal Recovery Funds. Recommendation - As the grant period as ended for the grant, we recommend that the Organization work with the funding agency to remedy the noncompliance. In addition, we recommend that the Organization reassess its period of performance controls to identify where enhancements or additional controls are needed. Views of Responsible Officials and Corrective Action Plan - Background: Sinai began the process of risk assessment in the government grants area at the end of 2022. At that time, Sinai engaged outside counsel to assist in this process. In December of 2023, Sinai created the Office of Government Grant Administration (OGGA) and developed a comprehensive grant compliance policy and procedure. The Audit and Compliance Committee of the Board was updated on this initiative. In 2024, the OGGA created a Grant Compliance Manual which sets forth processes and procedures in grant management to ensure compliance with government regulations. Unfortunately, these controls were not implemented until after the relevant time period at issue in this audit. In 2025, Sinai is continuing to improve its compliance procedures with respect to government grants, and has developed the following plan: 1. Working Group: Sinai will implement a process of convening a Working Group for each government grant, which will consist of a representative from Finance, the OGGA, and the stakeholder involved (i.e., nursing, medicine, etc.) The Working group will be responsible for, among other things, ensuring that that the reported qualifying expenditures are incurred during the period of performance of the grant. In other words, allowable costs will be discussed early in the process, so that there is fulsome understanding among the key individuals involved. 2. Record-Keeping: The OGGA will also establish shared folders to house all of the pertinent documentation relative to the grant. 3. Invoice/Supporting Documentation Review. The Grant Accounting Manager will review all invoices and other supportive documentation to ensure that allowable costs are submitted for reimbursement. This compliance check will be completed prior to submission of the documentation for reimbursement. Monthly reviews of these activities will be performed by the Grant Accountant, the Compliance Grant Manager, and other OGGA staff as needed. Proactive review to prevent or resolve issues in the upcoming month’s billings should be pursued. 4. Annual Assessment. The Chief Compliance Officer, with the assistance of the General Counsel, will meet with the OGGA team annually to assess procedures and risk controls; a report of this assessment will be made to the Audit and Compliance Committee of the Board of Directors
Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - Illinois Department of Public Health (38080704K and 38080714K) & Illinois Department of Healthcare and Family Services (ARPA231010 and ARPA231002) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition - The Organization's controls did not identify expenses submitted to the State of Illinois, for reimbursement, were outside of the period of performance. Questioned Costs - $3,441,315 Identification of How Questioned Costs Were Computed - PM obtained the entire list of expenses submitted to the State of Illinois to assess the amount of questioned costs. The listing submitted to the State of Illinois was filtered to show the invoices that were outside of the period of performance. Context - In our testing of 40 allowability samples, we identified 12 invoices whereby the expense was incurred outside the period of performance, i.e., July 1, 2022 - June 30, 2023. As noted above, PM filtered the complete listing of expenses charged to the grant and discovered that $3,441,315 was charged to grant and outside of the period of performance. The questioned costs are included in the approximate $13.5M reported on the SEFA for the year ended June 30, 2023 under ALN 21.027. Cause and Effect - The lack of effective period of performance controls did not identify invoices that were outside the period of performance. The lack of controls resulted in a material amount of questioned costs and an opinion modification of 21.027, COVID 19 Coronavirus State and Local Fiscal Recovery Funds. Recommendation - As the grant period as ended for the grant, we recommend that the Organization work with the funding agency to remedy the noncompliance. In addition, we recommend that the Organization reassess its period of performance controls to identify where enhancements or additional controls are needed. Views of Responsible Officials and Corrective Action Plan - Background: Sinai began the process of risk assessment in the government grants area at the end of 2022. At that time, Sinai engaged outside counsel to assist in this process. In December of 2023, Sinai created the Office of Government Grant Administration (OGGA) and developed a comprehensive grant compliance policy and procedure. The Audit and Compliance Committee of the Board was updated on this initiative. In 2024, the OGGA created a Grant Compliance Manual which sets forth processes and procedures in grant management to ensure compliance with government regulations. Unfortunately, these controls were not implemented until after the relevant time period at issue in this audit. In 2025, Sinai is continuing to improve its compliance procedures with respect to government grants, and has developed the following plan: 1. Working Group: Sinai will implement a process of convening a Working Group for each government grant, which will consist of a representative from Finance, the OGGA, and the stakeholder involved (i.e., nursing, medicine, etc.) The Working group will be responsible for, among other things, ensuring that that the reported qualifying expenditures are incurred during the period of performance of the grant. In other words, allowable costs will be discussed early in the process, so that there is fulsome understanding among the key individuals involved. 2. Record-Keeping: The OGGA will also establish shared folders to house all of the pertinent documentation relative to the grant. 3. Invoice/Supporting Documentation Review. The Grant Accounting Manager will review all invoices and other supportive documentation to ensure that allowable costs are submitted for reimbursement. This compliance check will be completed prior to submission of the documentation for reimbursement. Monthly reviews of these activities will be performed by the Grant Accountant, the Compliance Grant Manager, and other OGGA staff as needed. Proactive review to prevent or resolve issues in the upcoming month’s billings should be pursued. 4. Annual Assessment. The Chief Compliance Officer, with the assistance of the General Counsel, will meet with the OGGA team annually to assess procedures and risk controls; a report of this assessment will be made to the Audit and Compliance Committee of the Board of Directors
Reference Number: 2023-019 Category of Finding: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency and Instance of Noncompliance State Administering Department: California Department of Social Services (CDSS) Assistance Listing Numbers: 96.001 Federal Program Title: Disability Insurance/SSI Cluster: Social Security Disability Insurance Federal Award Number and Year: 04-2204CADI00; 2022 Criteria Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget Guidance for Grants and Agreements. Chapter II – Office of Management and Budget Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D – Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget Guidance for Grants and Agreements. Chapter II – Office of Management and Budget Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart E – Cost Principles. §200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: (g) Be adequately documented. See §200.300 through §200.309. Condition The documentation for one of forty samples selected for testing did not agree to the payment disbursed to a provider for medical evidence of record (MER) services. The provider was overpaid by $5. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause CDSS has represented that the cause was an input error in the Midas subledger when processing the vendor payment. Effect CDSS did not have appropriate oversight controls to ensure that the data entry was accurate. Accordingly, there is an increased risk for data entry directly affecting the amount reported on the schedule of expenditures of federal awards to be inaccurate. Questioned Costs Questioned costs are projected to be $54,398. Context The total MER expenditures for the fiscal year ended June 30, 2023, were $4,432,781, which represents 1.8% of the total program expenditures of the Disability Insurance/SSI Cluster of $242,946,482. The sample was not a statistically valid sample. Recommendation CDSS should strengthen its controls over the review for accuracy of the provider invoice amounts input into Midas. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,631 items totaling $1,399,666 • ALN No. 93.788 – 1,728 items totaling $2,664,710 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 47 items totaling $48,756, including projected errors over the total population totaling $582,093 • ALN No. 93.788 - 7 items totaling $30,061, including projected errors over the total population totaling $138,133 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $48,756 • ALN No. 93.788 - $30,061 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Repeat finding (2022-003). Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,631 items totaling $1,399,666 • ALN No. 93.788 – 1,728 items totaling $2,664,710 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 47 items totaling $48,756, including projected errors over the total population totaling $582,093 • ALN No. 93.788 - 7 items totaling $30,061, including projected errors over the total population totaling $138,133 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $48,756 • ALN No. 93.788 - $30,061 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Repeat finding (2022-003). Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
FINDING REFERENCE NUMBER 2023-031 (See Finding Reference Number 2023-003) FEDERAL PROGRAM (ALN – 93.558) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 2021G996117; 2022G996117; 2023996117 (Federal Award Years: 2021 through 2023) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT ALLOWABLE COSTS/COSTS PRINCIPLES TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA Uniform Guidance at 2 CFR 200 Subpart E §200.403, Factor affecting allowability of costs, establishes that: “Except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient. (d) Be accorded consistent treatment. For example, a cost must not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing requirements of any other federally-financed program in either the current or a prior period. See § 200.306(b). (g) Be adequately documented. See §§ 200.300 through 200.309.” STATEMENT OF CONDITION As part of our audit procedures over allowable costs requirements for TANF program, we selected seven (7) voucher payments related to activities of prevention. We found the following deficiencies: (a) When we obtained the vouchers related to payments of a contractor, we also requested the contract and the proposal, we noted that the Entity is a subrecipient and not a contractor. The transactions related to this contract were not identified as subrecipient in the SEFA (see Finding Reference Number 2023-058). We audited three (3) vouchers of this subrecipient, in each one, this Entity claimed reimbursement for utilities, supplies, and materials. When we observed documentation in the file, we noted that the entity administers other Federal awards; and no evidence was observed in the voucher that proper distribution of administrative costs is made among all Federal awards. In addition, the contract required a certification indicating absence of duplication of services provided, and it was not included in the invoice or supporting documentation. (b) In the other four (4) vouchers evaluated related to payments to contractors, reimbursement claimed by the contractors included the purchase of laptops and digital screens. No evidence was provided that indicated who is responsible for this equipment, where it is located, and how it is safeguarded. These suppliers were contracted to provide training and workshops for participants of TANF. In the invoices evaluated we noted that ADSEF is paying for all costs of the entity, including supplies, maintenance of vehicles, mileage for some personnel, telephone charges, internet, and other utilities. In the final draft of the SEFA submitted for audit procedures, ADSEF reported the amount of $2,411,184, which included all transactions related to preventive services. QUESTIONED COSTS None. PERSPECTIVE INFORMATION This is a systemic deficiency. Total transactions related to prevention services were one-hundred seven (107), amounting to $2,411,184. ADSEF does not have internal guidance and procedures establishing how transactions with sub-recipients will be handled and how they are accounted for. Furthermore, there are no internal controls documenting the evaluation of the operational costs of suppliers contracted to provide a service, and their operational expenses must be covered by them and not claimed directly from the program. STATEMENT OF CAUSE ADSEF does not have a work plan and internal control guidance that clearly defines permissible activities and describes the activities that will be carried out to meet program requirements through the contracting of suppliers and sub-recipients. POSSIBLE ASSERTED EFFECT ADSEF may be incurring non-allowable costs by reimbursing expenses not properly stipulated in the allowable cost regulations for program administration. Furthermore, the expenses incurred by the sub-recipient are not identified in the database in a manner that allows them to be identified for the preparation of the SEFA. IDENTIFICATION OF REPEAT FINDING No reported as prior audit finding. RECOMMENDATIONS We recommend management to establish internal control processes consistent with the requirements of 2 CFR 200. In addition, design and implement internal control processes to meet the requirements of subrecipient monitoring and procurement standards.
2023-005 – PERIOD OF PERFORMANCE Type: Significant Deficiency in Internal Control / Non-compliance Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II – Credit Recovery Criteria: As detailed by 2 CFR 200.308, 2 CFR 200.309, and 2 CFR 200 403(h), A non-federal entity may only charge allowable costs incurred 1) during the approved budget period, or 2) before the approved budget period if authorized by the federal awarding agency or pass-through entity. Condition: During testing of amounts charged to the grants, it was noted that an amount charged to the grant was incurred outside the approved budget period of performance. Cause/Effect: This condition appears to be the result of a misunderstanding of costs allowed under this grant. These costs were not in compliance with 2 CFR 200. Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of the period of performance for each grant and then establish/modify internal controls to assure that only costs incurred within the approved budget period of performance are charged to the grant. View of Responsible Official: Management is in agreement with this recommendation
Finding 2023-002: Questioned Cost – Material Weakness Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Also, costs should not be included as a cost of any other federally financed programs in either the current or prior period. Costs charged to federal grants should be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Condition: Costs for US Department of Transportation, Mobility Management Grant 20.507 Section 5307 included a $30,000 charge for use of the Data Management System (DMS). The charge is based on a contract rate charged to outside entities that varies depending on the number of users. Management stated the charge was to recoup costs for use of the DMS. Costs for the DMS consist of historical costs to get the system functioning, along with current personnel costs to operate the system and provide the contracted training. The historical costs occurred outside the period of performance and are thus unallowable. Personnel costs are already being charged to the grant through the allocated payroll and benefits of trainers and other personnel, and thus should not also be charged through the contract rate. In addition, if the contract rate includes a profit component this would also be unallowable to charge to the grant. We also noted the same $30,000 charge was included in US Department of Transportation, Enhanced Mobility of Seniors and Individuals with Disabilities, Section 5310. Cause: Paratransit’s internal controls over the determination of allowable costs were not operating effectively. Effect: The DMS costs were removed and replaced with an allowable 10% de minimus overhead charge. Recommendation: We recommend that costs charged to federal grants be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Management’s Response: See corrective action plan.
2023-001 ALLOWABLE COST, CASH MANAGEMENT, AND PERIOD OF PERFORMANCE - SIGNIFICANT DEFICIENCY Federal Program Unaccompanied Alien Children Program ALN 93.676 Criteria Part 3 of the Compliance Supplement indicates non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Part 3 of the Compliance Supplement indicates a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition/Cause In July 2022, the Home requested reimbursement and received funding to cover costs that had not yet been incurred or paid for as of June 30, 2023. Effect The Home was reimbursed for costs that were not incurred during the budget period. Additionally, the Home has held onto grant funds for twelve plus months. Questioned Costs Known questioned costs are $52,841. Context The Home budgeted to have new fire alarms installed in the cottages during the July 1, 2021 - June 30, 2022 grant budget period. Due to supply chain issues and labor shortages the alarms were not installed until the Fall of 2023 at which time the Home paid the contractor. Repeat Finding No. Recommendation We recommend the Home contact the funding agency to inquire about returning the funds and any interest earned. We also recommend that the Home revisit and strengthen internal controls over allowable activities, allowable costs, cash management, and period of availability related to grant programs. Management Response See corrective action plan included in this report package.
Department of Labor and Industry Finding 2023 – 018: ALN 84.126 – Rehabilitation Services – Vocational Rehabilitation Grants to States A Significant Deficiency and Noncompliance Exist in the Department of Labor and Industry’s Procedures Related to Period of Performance Requirements Federal Grant Number(s) and Year(s): H126A210056 (10/01/2020 – 9/30/2022) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Compliance Requirement: Period of Performance Condition: During our audit of the Rehabilitation Services – Vocational Rehabilitation Grants to States (RS-VR) program, we tested internal control over and compliance with period of performance requirements for the grant awarded by the United States Department of Education that had a period of performance date ending during the fiscal year ended June 30, 2023 audit period. • Two of 55 expenditures tested that were charged to the federal fiscal year 2021 RS-VR grant that closed during the audit period, were incurred after the allowable period of performance. These expenditures included two rental payments totaling $8,763. Both payments were for November 2022 rental charges but were charged to the grant which had a period end date of September 30, 2022. Expenditures posted in the last month of the allowable period of performance and after (including the two rental payments) totaled $36,651,862. Management was unable to provide authorization from the federal awarding agency for allowance of the expenditures occurring outside of the period of performance. Criteria: 2 CFR Section 200.303(a), Internal controls, states: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR Section 200.309, Period of performance, states: A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in §200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the award that were authorized by the Federal awarding agency or pass-through entity. Management Directive 325.12, Amended, Standards for Enterprise Risk Management in Commonwealth Agencies, adopted the internal control framework outlined in the United States Government Accountability Office’s Standards for Internal Control in the Federal Government (Green Book). The Green Book states in part: Management should establish and operate monitoring activities to monitor the internal control system and evaluate the results. Management should remediate identified internal control deficiencies on a timely basis. Finding 2023 – 018: (continued) Cause: Office of Vocational Rehabilitation (OVR), Pennsylvania Department of Labor and Industry personnel did not check service dates prior to submitting invoices for payment which were charged to the federal fiscal year 2021 grant. OVR personnel did not have adequate procedures in place to ensure that only costs incurred during the allowable period of performance were charged to the grant. Effect: Expenditures outside of the allowable period of performance were incorrectly charged to the grant without authorization by the federal awarding agency, resulting in noncompliance and questioned costs. Recommendation: We recommend that OVR personnel implement procedures to ensure that costs and adjustments being charged to a federal grant are incurred within the allowable period of performance of the grant to which they are being charged, or when necessary, obtain authorization from the federal awarding agency prior to charging costs that are outside the allowable period of performance. Agency Response: OVR agrees with this finding. Questioned Costs: Known questioned costs of $8,763 were determined, which represents the amount of transactions incurred and charged to the federal grant outside the allowable period of performance.
Reference Number: 2023-008 Prior Year Finding: 2022-017 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI393532355A50 (10/1/2022 – 12/31/2025) Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) charged costs to the federal grant prior to the allowable start of the period of performance. Payments were also issued without review and approval by supervisory staff. Context: Sixty transactions were selected for testing and the following exceptions were noted: • Five of sixty transactions were charged to the award before the allowable period of performance. The grant award start date was October 1, 2022 but costs, totaling $2,277, were incurred in June, July and September 2022. • The Department’s key control is that all payments are supported by an invoice approved by a program manager who is aware of the grant’s period of performance. Four of sixty transactions did not have evidence of supervisory approval prior to issuance of payment. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Department’s procedures and internal controls were not operating sufficiently to ensure that expenditures charged to the program were incurred within the award’s period of performance. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Questioned costs: Below the reportable limit. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Views of responsible officials: The Department acknowledges and accepts this finding.
Reference Number: 2023-008 Prior Year Finding: 2022-017 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI393532355A50 (10/1/2022 – 12/31/2025) Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) charged costs to the federal grant prior to the allowable start of the period of performance. Payments were also issued without review and approval by supervisory staff. Context: Sixty transactions were selected for testing and the following exceptions were noted: • Five of sixty transactions were charged to the award before the allowable period of performance. The grant award start date was October 1, 2022 but costs, totaling $2,277, were incurred in June, July and September 2022. • The Department’s key control is that all payments are supported by an invoice approved by a program manager who is aware of the grant’s period of performance. Four of sixty transactions did not have evidence of supervisory approval prior to issuance of payment. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Department’s procedures and internal controls were not operating sufficiently to ensure that expenditures charged to the program were incurred within the award’s period of performance. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Questioned costs: Below the reportable limit. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Views of responsible officials: The Department acknowledges and accepts this finding.