Finding Type: Significant deficiency and noncompliance Federal Program: Coronavirus State and Local Fiscal Recovery Funds- ALN 21.027 Criteria: Per 2 CFR 200.328 (Financial Reporting) and the grant agreement, the auditee is required to submit financial status reports on a quarterly basis within 30 days of the end of the quarter. Condition: During our testing of the reporting requirement, we noted instances in which the SLFRF compliance quarterly reports for the periods ending March 31, 2025 and September 30, 2025 were not submitted on time to the federal awarding agency. Cause: For one reporting period, submission of the quarterly compliance report was delayed due to management identifying the need to make an adjustment prior to submission to ensure the accuracy of the reported information. For the second reporting period, submission was delayed due to a system outage that prevented management from submitting the report through the reporting portal by the required deadline. Effect: Failure to submit timely reports prevents the awarding agency from properly monitoring the grant program, leading to potential restrictions on future funding. Questioned Costs: None Recommendation: We recommend that the County implement procedures to help ensure required reports are submitted timely. View of responsible Officials: Management agrees with finding and will take appropriate steps to remedy noted finding.
Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year: 2025 Assistance Listing Number (ALN): 21.027 Federal Awarding Agency: U.S. Department of Treasury Compliance Requirement: Reporting – Quarterly Program Reports Pass-through Entity: Ohio Department of Development Repeat Finding: Yes Prior Audit Finding Number: 2024-001 Significant Deficiency and Noncompliance – Timely Submission of Quarterly Program Reports Criteria: 2 C.F.R. § 200.328 Financial Reporting states, in part, the Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. The recipient must submit quarterly program reports as required by the Federal award. In the Ohio Department of Development Water and Wastewater Infrastructure Program Grant Agreement, Statement of Agreement, Section 6 Reporting Requirements, Exhibit II Reporting, Section 2, Program Reports, all grant award recipients are required to submit program reports on a quarterly basis. Quarterly program reports must be submitted by close of business, on the second Friday, at the end of each quarter. Condition: The City did not submit the quarter ending December 31, 2025 Quarterly Program Report until January 13, 2026, after the deadline of January 9, 2026. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Auditor reviewed the Quarterly Program Report for period ending December 31, 2025 via email submission to Ohio Department of Development, and noted the City did not submit the report until January 13, 2026, which was after the deadline of January 9, 2026. These requirements are outlined in the federal award agreement and applicable UG provisions. Cause and Effect: The issue results of lack of monitoring control related to grant reporting requirements. Failure to submit reports as required, could result in non-compliance with grant requirements. Recommendation: We recommend that the City implement procedures and internal deadlines for reviewing and timely submitting all reports under federal awards.
2025-002 Program: Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Passed-Through: Douglas County Award No. and Year: Multiple Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, requires non-Federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance the entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the federal award (§200.303). In addition, 2 CFR §200.328 and §200.329 require non‑Federal entities and subrecipients to submit financial and performance reports in accordance with the terms and conditions of the federal award and pass‑through entity requirements. Condition: The Town did not have documented or consistently applied internal controls to ensure compliance with the County’s subrecipient guidance requiring the submission of formal special reports for ALN 21.027. Specifically, the Town did not maintain written procedures or standardized documentation evidencing the preparation, review, approval, and submission of required special reports in the format prescribed by the pass‑through entity. Cause: Management relied on email correspondence and progress meetings rather than a formally designed and implemented reporting control process. Effect: As a result, there is a reasonable possibility that required special reporting information submitted to the County could be incomplete, inconsistent, untimely, or not retained in accordance with federal and pass‑through entity record retention requirements, without detection by management. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used as the population was too small to sample. Program reporting requirements were expenditures and amounts passed through to subrecipients were reconciled to the supporting records. Repeat Findings from Prior Years: No. Recommendation: The Town should establish and document internal controls over compliance with special reporting requirements for federal awards, including: • Formal procedures for preparing special reports in the format required by the pass‑through entity; • Management review and approval of reports prior to submission; and • Retention of complete and accurate reporting documentation in accordance with federal and pass‑through entity requirements. Views of Responsible Officials: See separately issued Corrective Action Plan.
Finding 2025-001 – Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program: Head Start Cluster AL Number: 93.600 Pass-through: Not applicable Award Number: 05CH012552-01 & 05CH012552-02 Award Year: 2024/2025 & 2025/2026 Type of Finding: Significant Deficiency and Noncompliance Criteria: 2 CFR 200.328(c) requires a recipient of a Federal award to submit financial reports as required by the Federal award. Reports submitted annually by the recipient must be due no later than 90 calendar days after the reporting period. Reports submitted semiannually must be due no later than 30 calendar days after the reporting period. As a recipient of Federal funding, the Association is responsible for ensuring financial reports are complete, accurate, and submitted timely in accordance with these requirements. Management is also responsible for establishing and maintaining internal controls to ensure compliance with applicable laws and regulations. Condition: During the audit period, one annual and one semiannual financial report were due as required under the Federal awards referenced above. Neither reports were submitted within the required time period as stated in the Criteria. Cause: The Association lacked adequate internal controls over the preparation, review, and submission of the Federal financial reports, resulting in untimely submissions. Effect: Failure to adhere to the reporting requirements could result in disciplinary action from the Federal agency. Questioned costs: None Identification of how questioned costs were computed: Not applicable Repeat finding: Not applicable Recommendation: We recommend the Association establish, implement, and consistently follow an internal control policy to ensure financial reports are submitted timely and accurately. Views of responsible officials: See Corrective Action Plan.
Information on the Federal Program: Hazard Mitigation Grant, Assistance Listing Number 97.039, U.S. Department of Homeland Security, passed through Georgia Emergency Management & Homeland Security Agency. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Section 200.303 requires non-Federal entities to establish and maintain effective internal control over Federal awards, providing reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. Furthermore, the specific grant agreement and 2 CFR 200.328 require the timely and accurate submission of periodic financial and performance reports. Condition: During our testing of the County's reporting compliance for the Hazard Mitigation Grant in fiscal year 2025, we noted the following exceptions: • Late Submission: The 3rd Quarter report was submitted 8 days after the required grant deadline for the ALN #HMGP-440-006. • Inaccurate Interim Reporting: Project costs were not accurately reported in the quarter they were incurred. Instead of reporting costs in the appropriate quarters, the County aggregated and reported the total project costs entirely within the 4th Quarter report. Further, projects costs for November and December 2025 totaling approximately $185,000 were not included in the 4th Quarter progress report. Context/Cause: The County lacked formally documented internal procedures and adequate inter-departmental communication workflows. Consequently, the individual responsible for grant reporting did not receive the necessary invoices and financial data in a timely manner. Additionally, there was no documented secondary review process in place prior to the submission of the reports. Effects: The lack of adequate internal controls resulted in noncompliance with federal reporting requirements, specifically the late submission of a required report and the submission of inaccurate interim quarterly reports. This limits the federal granting agency's ability to accurately monitor interim project progress, financial pacing, and expenditures throughout the year. Recommendation: We recommend the County develop and implement formal, written policies and procedures to ensure all relevant financial data and invoices are routed to the reporting personnel well in advance of reporting deadlines. Management should establish a secondary review and approval process by a supervisor or separate qualified individual before any grant reports are submitted to ensure accuracy and timeliness. Finally, training should be provided to all relevant staff regarding this reporting workflow. Auditee’s Response: We concur with the finding. The County has implemented additional internal controls, including a workflow for sharing invoices during 2025 when it was discovered that the grant reporting was not done properly. The County also adopted a new grant policy in March 2026 to provide additional levels of review from the grant application process through closeout of a grant. This further ensures accurate and timely reporting going forward.
The EPA assistance agreement, in accordance with 2 CFR 200.328, required the recipient to submit semi-annual progress reports and an annual financial report by the dates specified in the award. Recipients must use the standard financial reporting forms or such other forms as may be authorized by OMB (approval is indicated by an OMB paperwork control number on the form) when reporting to the Federal awarding agency. Each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the Federal awarding agency. If the Federal awarding agency requires reporting of accrual information and the recipient’s accounting records are not normally maintained on the accrual basis, the recipient is not required to convert its accounting system to an accrual basis but may develop such accrual information through analysis of available documentation. The Federal awarding agency may accept identical information from the recipient in machine-readable format, computer printouts, or electronic outputs in lieu of closed formats or on paper. The standard financial reporting forms for grants and cooperative agreements are as follows: - Federal Financial Report (FFR) (SF-425/SF-425A) (OMB No. 0348-0061)). Recipients use the FFR as a standardized format to report expenditures under Federal awards, as well as, when applicable, cash status (lines 10.a, 10.b, and 10c). References to this report include its applicability as both an expenditure and a cash status report unless otherwise indicated. The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period (2 CFR 200.328(c). Performance and Special Reporting Non-Federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR 200.329(c)(1)). They also may be required to submit special reports as required by the terms and conditions of the Federal award. Per the conditions of the award, the City was required to submit semi-annual progress reports and an annual financial report. During the audit period, the City did not submit the first progress report on time and the second report was not submitted. We also found that the financial report was submitted outside of the 90 day time period in which it should have been submitted. The City should implement additional procedures to ensure compliance with federal reporting requirements.
Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Passed-Through: Douglas County Award No. and Year: Multiple Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, requires non-Federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance the entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the federal award (§200.303). In addition, 2 CFR §200.328 and §200.329 require non‑Federal entities and subrecipients to submit financial and performancereports in accordance with the terms and conditions of the federal award and pass‑through entityrequirements. Condition: The Town did not have documented or consistently applied internal controls to ensure compliance with the County’s subrecipient guidance requiring the submission of formal special reports for ALN 21.027. Specifically, the Town did not maintain written procedures or standardized documentation evidencing the preparation, review, approval, and submission of required special reports in the format prescribed by the pass‑through entity. Cause: Management relied on email correspondence and progress meetings rather than a formally designed and implemented reporting control process. Effect: As a result, there is a reasonable possibility that required special reporting information submitted to the County could be incomplete, inconsistent, untimely, or not retained in accordance with federal and pass‑through entity record retention requirements, without detection by management. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used as the population was too small to sample. Program reporting requirements were expenditures and amounts passed through to subrecipients were reconciled to the supporting records. Repeat Findings from Prior Years: No. Recommendation: The Town should establish and document internal controls over compliance with special reporting requirements for federal awards, including: •Formal procedures for preparing special reports in the format required by thepass‑through entity; •Management review and approval of reports prior to submission; and •Retention of complete and accurate reporting documentation in accordance with federaland pass‑through entity requirements. Views of Responsible Officials: See separately issued Corrective Action Plan.
Federal Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ARPA) - ARPA Water and Wastewater Infrastructure Program Federal Award Identification Number and Year: DEV-2021-181052 Assistance Listing Number (ALN): 21.027 Federal Awarding Agency: Department of the Treasury Pass-through Entity: Ohio Department of Development Repeat Finding: Yes, 2024-002 Significant Deficiency and Noncompliance – Reporting Criteria: 2 C.F.R. § 200.328 Financial Reporting states, in part, the Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. The recipient must submit quarterly program reports as required by the Federal award. In the Ohio Department of Development Water and Wastewater Infrastructure Program Grant Agreement, Statement of Agreement, Section 6 Reporting Requirements, Exhibit II Reporting, Section 2, Program Reports, all grant award recipients are required to submit program reports on a quarterly basis. Quarterly program reports must be submitted by close of business, on the second Friday, at the end of each quarter. Condition: The City did not submit the required Program Report for the first quarter of 2025 by the due date. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Through testing of required reporting under terms and conditions of the federal award, we observed the City did not meet the required timeliness requirements for performance reporting. The required performance report for the first quarter of 2025 was due April 11, 2025 and the report was submitted on April 17, 2025. These requirements are outlined in the federal award agreement and applicable Uniform Guidance provisions. Cause and Effect: The issue results from a lack of monitoring controls related to grant reporting requirements. Failure to submit reports timely as required could result in noncompliance with grant requirements. Recommendation: We recommend management implement procedures and processes to ensure that all required reports are submitted on time. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Reporting ALN 10:854: Rural Economic Development Loan and Grant Criteria: The Rural Economic Development Loan Agreement outlines that the Cooperative shall submit a project performance report to Rural Development on an annual basis. The recipient or subrecipient must submit financial reports as required by the federal award (2 CFR 200.328). Condition: The Cooperative submitted a project performance report (Form RD 4280-1) but did not have support for the reported number of actual jobs created or the number of jobs retained/saved as a result of this project. The Cooperative also submitted a financial report (SF-425) and did not have support for the reported total recipient share required and the recipient share of expenditures. Context: The RD 4280-1 report is required annually. Both the SF-425 and RD 4280-1 reports were signed by Cooperative management. Effect: The Cooperative did not retain support for the reported information. Questioned Costs: None. Cause: This is the first year the Cooperative received these loan funds. The information in these reports was provided by the subrecipient, and Cooperative personnel did not retain support for this information in their records. Auditor Recommendation: We recommend the Cooperative retain support for all reported information to ensure accuracy of reporting. Fergus Electric Cooperative Response: Fergus worked in conjunction and regularly communicated with the local Montana USDA REDL/G office to understand program requirements, provide requested information, and meet federal guidelines. Loan agreement RD 4280-5, (Dated 10/31/2024) refers to 7 CFR part 4280, Subpart A, as (“Regulations”). Fergus was unaware that 2 CFR 200 regulations are associated with 7 CFR part 4280, Subpart A. Fergus regretfully acknowledges that we were not informed or aware of obligations to meet the regulatory requirements within 2 CFR 200. Fergus has adopted and implemented a policy, Federal Funding Compliance, to establish formal procedures and ensure ongoing compliance with applicable federal regulations, including 7 CFR 4280, Subpart A and 2 CFR 200.
Federal Award Identification: 2023-70417-39322 Federal Program: American Rescue Plan Technical Assistance Investment Program Assistance Listing: 10.234 Federal Agency: U.S. Department of Agriculture Pass-through Entity: Not applicable - direct award Award Period Audited: Fiscal year ended December 31, 2025 Criteria: The Uniform Guidance and the terms and conditions of the American Rescue Plan Technical Assistance Investment Program require non Federal entities to submit required financial reports, including the SF 425 Federal Financial Report, within prescribed timeframes. Annual financial reports are generally due within 90 calendar days after the end of the reporting period, unless otherwise specified by the federal awarding agency. Condition: Ecotrust and its Subsidiaries (collectively, the Organization) did not submit the required annual SF 425 Federal Financial Report for the fiscal year ended December 31, 2025, within the prescribed timeframe. The report was submitted after the applicable due date but prior to the issuance of the auditor’s reports. Context: This condition was identified during testing of the Reporting compliance requirement. As part of audit procedures, we inquired of management regarding the status and timing of submission of the SF-425 Federal Financial Report. In connection with these procedures, we also noted that the SF 425 for the fiscal year ended December 31, 2024 had not been submitted within the prescribed timeframe. Cause: The condition resulted from a misunderstanding of applicable federal reporting requirements and unclear assignment of responsibility for federal financial reporting, including inadequate procedures to ensure reporting requirements were monitored during staff absences. Effect: As a result, the Organization did not ensure timely submission of required SF 425 Federal Financial Reports, resulting in noncompliance with federal reporting requirements. This condition indicates that internal controls over federal reporting were not operating effectively with respect to the timely submission of required reports, potentially limiting the federal awarding agency’s ability to perform timely oversight and monitoring. Known Questioned Costs: None. Repeat Finding Status: This is a new finding for the year ended December 31, 2025. Recommendation: The Organization should strengthen controls over federal financial reporting to ensure required SF 425 Federal Financial Reports are submitted timely in accordance with 2 CFR 200.328 and applicable award terms. Such controls should include clearly defined responsibility for federal reporting, procedures to ensure continuity of reporting during staff absences, and periodic training to reinforce awareness of federal reporting requirements. Views of Responsible Officials: Management agrees with the finding. Management acknowledges that the SF 425 Federal Financial Report was not submitted within the prescribed timeframe and has indicated that corrective actions will be taken to strengthen controls over the timely submission of required federal financial reports.
U.S. Department of Commerce Federal Financial Assistance Listing 11.307 Economic Adjustment Assistance Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.328 and 200.329 require that the auditee submit financial and performance reports for federal awards that provide accurate, current, and complete information regarding the use of federal funds. Condition: During our testing, we noted that the amounts reported on the SF-425 and SF-271 reports did not accurately reflect qualified expenditures for the year ended December 31, 2025. Cause: The entity did not have sufficient internal controls over grant reporting to ensure that reported amounts were accurate for the year ended December 31, 2025. This resulted in inaccuracies that were not identified prior to submission. Effect: The financial reports submitted to the federal agency were materially misstated and did not comply with Uniform Guidance reporting requirements. The lack of effective internal controls over grant reporting allowed these material misstatements to occur and not be detected prior to submission, which could adversely affect federal oversight, monitoring, and funding decisions. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of one SF-425 report, three SF-271 reports, and two quarterly progress reports out of a population of twelve total reports was selected for testing. Errors were noted on the SF-425 report and one of the SF-271 reports. Repeat Finding from Prior Year(s): No Recommendation: We recommend that the entity strengthen internal controls over reporting to ensure that reported amounts accurately reflect qualified expenditures for the period and comply with federal program requirements. Views of Responsible Officials: Management agrees with the finding.
Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Programs Assistance Listing No. 20.106 U.S. Department of Transportation Criteria: Reporting (2 CFR 200.328) Entities are required to submit accurate and timely financial reports, including the Federal Financial Report (SF-425), to the U.S. Department of Transportation Federal Aviation Administration (FAA) on an annual basis. Condition: The City did not submit the required annual Federal Financial Report (SF-425) to the FAA for the period under audit. Cause: The City does not have formalized procedures in place to ensure that required Federal reports are identified, prepared, reviewed, and submitted in accordance with grant requirements. Effect or Potential Effect: Failure to submit the required Federal Financial Report (SF-425) could result in the City not providing necessary financial information to the FAA to monitor grant activity and the use of Federal funds. Noncompliance with reporting requirements may result in delayed reimbursements, suspension of funding, or other engorcement actions by the awarding agency. Context: We selected a sample of four out of four reports required to be submitted during the year for detailed testing. For all reports tested, we noted a 100% error rate in submittal of the reports. The sampling methodology used is not, and is not intended to be, statistically valid. Repeat Finding: No Questioned Costs: No unknown or questioned costs. Recommendation: We recommend management implement procedures ensuring that all performance reporting requirements are identified in grant awards, and prepared, reviewed, and submitted accurately and timely in accordance with the grant requirements. Views of Responsible Officials: We agree with the finding. See separate report for planned corrective actions.
Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number 14.251 U.S. Department of Health and Human Services Other Noncompliance Criteria or Specific Requirement: Reporting Reporting (2 CFR § 200.328; Program-specific reporting requirements; grant agreement terms and conditions). Condition: Semi-annual reports were not submitted in a timely manner in accordance with grant reporting requirements. Cause:. The untimely submission was the result of an administrative oversight in the tracking of reporting deadlines. Effect or potential effect: Failure to submit required reports in a timely manner may result in noncompliance with grant requirements and could impact the Organization’s ability to receive future funding or result in increased oversight from the grantor agency. Questioned cost: None Context: All semi-annual reports for the year ended December 31, 2025 were tested. One of the two reports tested was submitted after the required due date, 6 days late. Identification as a repeat finding: Not a repeat finding Recommendation: It is recommended that management reinforce existing processes by enhancing the tracking of reporting deadlines, such as maintaining an updated reporting calendar and assigning responsibility for periodic monitoring, to help ensure timely submission of required reports. Views of responsible officials: DKP agrees with this finding.
Reportable Finding Considered a Significant Deficiency – Reporting Matching Agency: Department of Housing and Urban Development Program: Rural Capacity Building for Community Development and Affordable Housing Grants ALN# 14.265 Program Year: 2025 Criteria: 2 CFR §200.328 requires that recipients submit financial reports using OMB approved data elements, specifically the Federal Financial Report (SF-425), and such reports must be submitted as required by the Federal award and include all required financial information. The SF-425 is designed to report the cumulative federal share and recipient (matching) share of program expenditures. Condition: During testing of financial reporting for ALN 14.265, we noted that SF-425 reports submitted during the audit period did not include the required matching (non-federal) component. Specifically, the recipient share (matching contributions) was not reported. Cause: The condition appears to be due to inadequate understanding of SF-425 reporting requirements and lack of internal controls to ensure that matching contributions are properly included in required federal financial reports. Effect: Failure to report matching contributions on the SF-425 results in incomplete and inaccurate financial reporting to the federal awarding agency. This may impair the federal agency’s ability to monitor compliance with matching requirements and increase the risk of questioned costs or funding disallowances if matching requirements are not properly reported. Questioned costs: None Perspective: Statistical sampling was not used but sampling methodology followed AICPA guidelines. Repeat finding: This is not a repeat finding. Recommendation: We recommend management implement procedures to ensure all SF-425 reports include complete and accurate reporting of both federal and matching components. Controls should be established to track and reconcile matching contributions to supporting documentation and a supervisor should review to ensure completeness and compliance with reporting requirements prior to submission. Management’s response (unaudited): See Corrective Action Plan
Finding 2025-001: Untimely Submission of Required Quarterly Report Noncompliance and Significant Deficiency ARPA, AL 21.027 Criteria: In accordance with 2 CFR §200.328(b)(1) and the specific terms and conditions of the federal award agreement, recipients are required to submit performance and/or financial reports quarterly, no later than the 21st day of the following month after the end of each calendar quarter. Timely submission of these reports is essential for the federal awarding agency to monitor progress and compliance with program objectives. Condition: During our audit of the entity’s compliance with federal program requirements, we noted that the entity did not submit one required quarterly report by the date established in the grant agreement. Cause: The entity had the understanding that a fourth quarterly report was not necessary because construction on the projects funded by the program had been completed in the prior quarter, although billing for one project had not. The entity sought written clarification on reporting requirements from the grant administrator and was informed that a final report was necessary, but this was not requested until the due date. Effect: Failure to submit required reports on time constitutes noncompliance with federal grant requirements. Late submissions may impede the federal agency’s ability to monitor the project’s progress and may affect future funding decisions or lead to additional oversight. Identification as a Repeat Finding: This is a repeat finding, listed as 2024-001 in the prior year single audit report. Recommendation: We recommend that the entity enhance its procedures for identifying and monitoring all grant reporting requirements to ensure that required reports are submitted by the deadlines established in grant agreements. Views of Responsible Officials: See the attached Corrective Action Plan.
Finding 2025-002: Inaccurate Expense Reporting on Quarterly Report Significant Deficiency ARPA, AL 21.027 Criteria: In accordance with 2 CFR §200.328(b)(1), non-Federal entities are required to submit performance and/or financial reports on a regular basis as specified in the terms and conditions of the award. Effective internal controls, as outlined in 2 CFR §200.303, require that entities establish and maintain processes to ensure reliable reporting and compliance with federal requirements. Condition: During our review of the entity’s reporting procedures, we noted that one quarterly report submitted by the entity included incorrect expense information. Cause: The entity’s review process identified notes to correct on the quarterly report, however the report was submitted without corrections made. Effect: The submission of inaccurate expense information may result in reliance on incorrect financial data by the granting agency, and may affect future funding decisions or lead to additional oversight. Identification as a Repeat Finding: This is a new finding for fiscal year 2025. Recommendation: We recommend that the entity strengthen its controls over grant reporting to ensure that reviewed reports are reconciled to supporting records and that all identified discrepancies are resolved prior to submission. Views of Responsible Officials: See the attached Corrective Action Plan.
Noncompliance/Material Weakness Finding Number: 2025-002 Assistance Listing Number and Title: AL #14.228 Community Development Block Grants / State’s Program Federal Award Identification Number / Year: 2025 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Development Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2024-003 2 CFR § 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 C.F.R. § 200.328 which states, unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information. 2 CFR § 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR § 200.208 which states, in part, that Federal awarding agencies are responsible for ensuring that specific Federal award conditions are consistent with the program design reflected in § 200.202 and include clear performance expectations of recipients as required in § 200.301. The Federal awarding agency or pass- through entity may adjust specific Federal award conditions as needed, in accordance with this section, based on an analysis of specified factors. Additional Federal award conditions may be added provided the applicant or non-Federal entity has been notified, and any additional requirements must be promptly removed once the conditions that prompted them have been satisfied. Additional Federal award conditions may include items such as additional, more detailed financial reports. The various grant agreements for the program state that the grantee shall submit the required reports in an adequate and timely fashion. The Grantor shall provide a format for these reports and shall instruct the Grantee on the proper completion of said reports. All report forms and requirements listed herein shall be provided by the Grantor but shall not be construed to limit the Grantor in making additional and/or further requests, nor in the change or addition of detail to the items listed. The Grantee shall submit to the Grantor a Status Report within 30 days of the request by the Grantor. The County submitted Status Reports; however, possibly due to the failure of existing controls, all Status Reports tested for 2025 were submitted late and five Status Reports due in 2025 were not yet filed as of the date of this report. Reporting errors could adversely affect future grant awards. Additional controls and/or procedures should be implemented to help ensure required reports are accurately prepared and submitted in a timely manner.
Department of Agriculture, Federal Financial Assistance Listing 10.720, 24-DG-11010013-052, 2025 Infrastructure Investment and Jobs Act Community Wildfire Defense Grant Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.328 requires the auditee to submit financial reports as required by the federal award. SF-425 instructions note for reports prepared on an accrual basis, expenditures reported are the sum of cash disbursements for direct charges for property and services; the amount of indirect expense incurred; and the net increase or decrease in the amounts owed by the recipient. Condition: Amounts reported on the federal share of expenditures line (Line 10e) did not agree to the cooperative’s records for the applicable reporting period. Cause: The Cooperative prepared the report as instructed by the Forest Service grants manager. Effect: Federal expenditures for the reporting period were understated by a material amount. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 2 out of 4 quarterly reports were selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend that management review the federal grant reporting requirements to ensure amounts reported are in compliance with reporting instructions and agree to the underlying accounting records. Views of Responsible Officials: Management disagrees with the finding, see corrective action plan.
Reporting – Financial and Performance Assistance Listing Number 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants U.S. Department of Housing and Urban Development (HUD) Federal Award Identification Number(s): B-22-CP-CO-0165 and B-23-CP-CO-0280 Award Year – 2022 and 2023 Criteria or specific requirement: 2 CFR §§200.328 and 200.329 require recipients to submit timely financial and performance reports that are supported by underlying records and accurately reflect financial activity and program accomplishments. In addition, the grant agreement requires the grantee to submit a combined semiannual performance and financial report in the Disaster Recovery Grant Reporting (DRGR) system. The report must include a narrative describing accomplishments during the reporting period and must be submitted within 30 calendar days after the end of each six-month reporting period. Condition: During testing, we noted that the semiannual performance reports required to be submitted during calendar year 2025 were not submitted by the required deadlines. The reports, which were due in January 2025 and July 2025, were not submitted until September 2025. As a result, the Grantee did not submit required financial and performance reports within the timeframe prescribed by the grant agreement and 2 CFR §§ 200.328 and 200.329. Additionally, management could not provide evidence of review for one of the reports. Cause: Management was not aware of the semiannual reporting deadlines established by the grant agreement and did not maintain a process to track reporting due dates. As a result, required reports were not submitted within the prescribed timeframes. In addition, the documentation pertaining to the evidence of reviews and the evidence of report submission was not retained. Effect: Failure to submit required financial and performance reports timely reduced the ability of the federal awarding agency to monitor grant activities, evaluate program progress, and ensure compliance with award requirements. In addition, because the federal grant system does not permit drawdowns when required reports are overdue, the delayed submissions prevented the City from requesting reimbursement of eligible grant expenditures on a timely basis, which could adversely affect cash flow and delay project activities funded by the grant. The lack of retained review documentation prevents management from demonstrating that required reviews were performed and increases the risk that errors, omissions, or noncompliance may not be identified and corrected timely. Questioned Costs: None Context: We tested 2 of 4 required semiannual reports and found both were submitted late. A non-statistical sampling methodology was used to select the sample. Identification of a repeat finding, if applicable: N/A Recommendation: We recommend management establish and maintain a formal grant compliance tracking process that identifies all required financial and performance reports, their due dates, and responsible personnel. Management should monitor the tracking schedule throughout the year and implement reminder and review procedures to help ensure all required reports are submitted accurately and timely in accordance with federal requirements and the terms and conditions of the grant award. Additionally, management should retain documentation evidencing the review of reports and supporting records, including the reviewer and date of review, to demonstrate compliance with established review procedures. Views of responsible officials and planned corrective actions: Agree. See separate corrective action plan.
Finding 2025-001 – Reporting – Late Submission of SF-425 Identification of Federal Program: Name of Program: Personal Responsibility Education Program Innovative Strategies (PREIS) Assistance Listing Number: 93.092 Award Identification Number: 90AP2700-05-00 & 90AP2700-04-00 Federal Award Year: 2024-25 and 2025-26 Name of the Federal Agency: US Department of Health and Human Services Criteria: In accordance with 2 CFR §§ 200.302 and 200.328 and the terms and conditions of Notices of Award 90AP2700-04-00 and 90AP2700-05-00, the Organization is required to submit financial reports as required by the terms and conditions of the Federal award. Federal Financial Reports (SF-425) must be submitted within the prescribed due dates established by the awarding agency as follows: • Reporting Period 1 (Sep 30 – Mar 31): Due April 30 • Reporting Period 2 (Apr 1 – Sep 29): Due October 30 • Annual report: Due December 30 Condition: The Organization did not submit the required SF-425 Federal Financial Reports within the required due dates for multiple reporting periods. Supporting documentation reviewed (HHS SF-425 submissions) indicated reporting dates extending beyond required deadlines. Reporting Period End Date March 31, 2025 September 29, 2025 September 29, 2025 Report Type Semi-Annual Semi-Annual Annual Due Date April 30, 2025 Date Submitted May 5, 2025 October 30, 2025 December 4, 2025 December 30, 2025 January 23, 2026 Days Late 5 days 35 days 24 days Cause: The condition resulted from insufficient awareness of the specific reporting deadlines and the absence of formalized internal controls and tracking procedures over federal reporting requirements. Effect: Late submission of SF-425 reports results in noncompliance with federal award requirements and may expose the Organization to additional oversight, delayed reimbursements, or other administrative actions by the awarding agency. Questioned Costs: None Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement a formal federal grant reporting calendar to track all SF-425 due dates and assign responsibility for monitoring compliance to designated grants compliance personnel to ensure timely submissions. View of responsible officials and planned corrective actions: Management agrees with the finding. The late submissions of the required SF-425 Federal Financial Reports resulted from insufficient awareness of the specific reporting deadlines and the absence of formalized internal controls and tracking procedures over federal reporting requirements. Management will implement a formal federal grant reporting calendar and assign monitoring responsibility to designated grants compliance personnel. The corrective actions will be fully implemented by the Organization and will be monitored on an ongoing basis. (See Corrective Action Plan.)
Section III – Major Federal Awards Programs – Findings and Questioned Costs (Cont.) Finding 2025-010: Reporting - Insufficient Policies to Ensure Completeness and Accuracy of Reports (Material Weakness) Federal Program : Grants for Transportation of Veterans in Highly Rural Areas Assistance Listing Number : 64.035 Criteria: Under 2 CFR 200.328 and 200.302(b)(2), entities must maintain internal controls to ensure that financial and performance reports are accurate, complete, and supported by appropriate documentation. Condition: Reports submitted for Federal awards were not consistently reviewed for accuracy, and review procedures were not documented. Cause: The Center lacks a formal reporting policy and does not have a documented review process in place. Effect: There is an increased risk of inaccurate reporting to Federal awarding agencies, which may impact funding decisions and compliance status. Recommendation: Management should establish a formal reporting policy requiring documented supervisory reviews prior to the submission of financial and performance reports. Repeat Finding: This is a repeat finding.
Finding 2025-001 – Reporting FEDERAL PROGRAM INFORMATION: - Workforce Innovation and Opportunity Act (WIOA) – A.L.N.# 17.258/259/278 - Temporary Assistance for Needy Families (TANF) – A.L.N.# 93.558 CRITERIA: 2 CFR 200.327 and 200.328 require that performance and financial reports be accurate, current, and complete. Reports must be supported by the accounting records from which they are prepared. CONDITION: We noted that the monthly financial reports for WIOA and TANF submitted during FY 2025 did not reconcile to the County’s underlying accounting records. CONTEXT: We selected twelve monthly reports for the WIOA program, and twelve monthly reports for the TANF program, and we noted for the reports selected, amounts reported did not agree to the supporting documentation. CAUSE: The County identified additional grant expenses or disqualified certain grant expenses and revised existing expenses charged to the grants after the reports were submitted, but the reports had already been filed and could not be amended. EFFECT: Submitting reports that do not agree to the accounting records may result in inaccurate reporting to the federal awarding agency. This increases the risk of misstating program expenditures, potential questioned costs, and reduced confidence in the accuracy of reported data used for program oversight. QUESTIONED COSTS: None RECOMMENDATION: We recommend the County identify all eligible expenses and revisions prior to reporting submissions.
Airport Improvement Program – Assistance Listing Number 20.106 U.S. Department of Transportation, Federal Aviation Administration Award No. 3-05-0089-012-2023 Award No. 3-05-0089-013-2024 Award No. 3-05-0089-014-2025 Criteria or Specific Requirement – Uniform Guidance at 2 CFR § 200.328(c) requires recipients to submit financial reports as required by the terms and conditions of the federal award. When quarterly financial reports are required, they must be submitted no later than 30 calendar days after the end of the reporting period. The City's FAA grant agreements require quarterly SF-425, Federal Financial Reports, for each grant that remains open. Condition – The City did not submit the required quarterly SF-425 reports for Grant Nos. 3-05-0089-012-2023 and 3-05-0089-014-2025. Cause – The City did not independently monitor quarterly reporting deadlines or verify report submission. Effect or Potential Effect – The City did not comply with the reporting requirements of its FAA awards or the Uniform Guidance requirement to submit financial reports as required by the Federal award. Questioned Costs – None. Context – Auditors reviewed the quarterly SF-425 reporting requirements for FAA grants open during fiscal year 2025 and identified that the required quarterly reports had not been submitted for Grant Nos. 3-05-0089-012-2023 and 3-05-0089-014-2025. Accordingly, the City's control over federal award reporting did not operate effectively. Identification as a repeat finding, if applicable – No. Recommendation – The City should implement procedures to identify and track all reporting requirements for active federal awards, including quarterly SF-425 due dates, and require management to independently review and verify that each report is complete and submitted within the timeframe required by the award and Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement a centralized grant reporting tracker that identifies reporting deadlines, assigns responsibility for preparation and review, and documents management's verification that required reports are submitted timely.
Statement of Condition The results of the procedures performed in the financial and performance reporting requirements showed the following instances of noncompliance: • The interim financial report for the grant awards H80CS33662 and C16CS50421 were submitted to the federal government after due date. • The final financial report for the grant award H8NCS53829 was submitted to the federal government after due date. No waiver or extension for later submission was noted. Criteria In accordance with 2 CFR 200.328, unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved government wide data elements for collection of financial information at the time of publication the Federal Financial Report or such future, OMB-approved, government wide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances. The Federal awarding agency must use OMB- approved common information collections, as applicable, when providing financial and performance reporting information. According to the terms and conditions of the federal awards of the Health Center Program Cluster, the recipient must submit on annually budget period the Federal Financial Report. The interim FFR is due 90 days after the end of each annually budget period. Final FFR is due 120 days after the end of the project period. Cause of Condition As explained by management, the authorized certifying official responsible for the submission of the reports, was not an active employee of the Foundation at the time of the submission due date. No other personal was assigned to perform this task before this date. Effect of Condition As stated by the federal agency, failure to comply with the reporting requirements may delay processing any pending requests or applications. Recommendation Management must verify that all required reports are prepared, reviewed and submitted on a timely manner. Questioned Costs None. Views of Responsible Officials and Planned Corrective Actions The Foundation agrees with the finding and the recommended procedures will be or have been implemented.
2025-001 – Internal Control over Federal Financial Reporting Significant Deficiency and Noncompliance Federal Award Information Assistance Listing Number: 93.676 Program Title: Unaccompanied Alien Children Program Federal Award Identification Numbers (FAIN): 90ZU0440-03-00 Federal Award Year: 2025 Name of Federal Agency: U.S. Department of Health and Human Services Criteria: The grant agreement associated with Federal Award Identification Number (FAIN) 90ZU0440-03-00 and 90ZU0664-01-00 requires quarterly SF-425 Federal Financial Reports to be submitted within 30 calendar days after the end of each reporting period. In addition, 2 CFR § 200.328 requires recipients to submit financial and performance reports as required by the terms and conditions of the federal award. Timely submission of required reports enables the federal awarding agency to effectively monitor program activities and expenditures. Condition: During testing of internal controls over the reporting compliance requirement, we obtained and reviewed the complete population of 10 reports required during the audit period, consisting of quarterly SF-425 Federal Financial Reports and annual reporting requirements. Based on this review, we noted that 2 of the 10 required reports for FAIN 90ZU0440-03-00 were submitted after the due dates established by the grant agreement. The exceptions consisted of two quarterly SF-425 Federal Financial Reports that were not submitted within the required 30-day reporting period. Cause: The Organization's controls over monitoring and tracking federal reporting deadlines were not operating effectively to ensure all required quarterly reports were submitted timely. Established procedures did not consistently identify upcoming due dates or provide sufficient oversight to ensure reports were submitted within required timeframes. Effect or potential effect: Untimely submission of required federal reports may hinder the federal awarding agency's ability to monitor program activities and expenditures and may increase the risk of noncompliance with federal award requirements. While the reports were ultimately submitted and no questioned costs were identified, the control deficiency increases the likelihood that required reporting deadlines may not be met in the future. Questioned costs: No questioned costs identified. Context: The population consisted of 10 required reports during the audit period. As part of control testing, we evaluated the timeliness of all 10 reports and identified two late SF-425 submissions, representing a 20 percent exception rate within the population. Separately, for compliance testing, we selected a sample of three reports and noted no exceptions. HANNA’S HOUSE Schedule of Findings and Questioned Costs For the Year Ended December 31, 2025 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Recommendation: We recommend the Organization enhance its monitoring controls over federal reporting requirements by implementing formal procedures to track reporting deadlines, document supervisory review of required reports, and verify timely submission. Consideration should also be given to establishing a documented reporting calendar and assigning responsibility for monitoring and following up on upcoming reporting requirements. Management Response: Hanna's House acknowledges the finding regarding the untimely submission of two quarterly SF-425 Federal Financial Reports. The reporting deficiencies identified in the 2025 audit occurred prior to the implementation of the corrective actions established in response to the 2024 audit finding (2024-001). As of September 23, 2025, Hanna's House implemented the following measures to strengthen its federal reporting procedures: • Established a comprehensive reporting calendar with automated reminders to track all required federal reporting deadlines. • Assigned multiple staff members responsibility for report preparation and submission to ensure continuity and accountability. • Implemented quarterly compliance reviews by finance and executive leadership to verify timely completion and submission of required reports. These corrective actions remain in place and have addressed the reporting deficiencies identified in both the 2024 and 2025 audit findings. Since their implementation, Hanna's House has maintained timely submission of its required federal reports. Management considers the corrective actions associated with this finding fully implemented and will continue monitoring compliance with federal reporting requirements to ensure their ongoing effectiveness. HANNA’S HOUSE Summary Schedule of Prior Year Findings and Questioned Costs For the Year Ended December 31, 2024 SECTION I - FINANCIAL STATEMENT FINDINGS No matters were reported. SECTION II - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Reference Number 2024-001 – Untimely Submissions of Standard Form Performance Progress Report (SF PPR) and Standard Form Federal Financial Report (SF 425). Current Status: 2024-001 is a repeat finding in the current fiscal year.
2 CFR 1000.10 gives regulatory effect to the Department of Treasury for 2 CFR part 200.302. 2 CFR 200.302(a) states, in part, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.302(b)(2) further states, in part, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosures of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Additionally, the U.S. Department of the Treasury Coronavirus Local Fiscal Recovery Fund (SLFRF) Award Terms and Conditions provides that "Recipient agrees to comply with any reporting obligations established by Treasury as they relate to this award." The U.S. Department of the Treasury requires non0entitlement unit’s (NEU’s) that are allocated less than $10 million in SLRF Funding to submit an annual Project and Expenditure Report. This report is required to include project descriptions, obligations and expenditures including current period obligation, cumulative obligation, current period expenditure, and cumulative expenditure, and other information. Due to deficiencies in the Township's internal controls over SLFRF reporting, the Township understated current period obligations, current period expenditures, and cumulative expenditures by $304,200, $786,589, and $786,589, respectively, in the annual project and expenditure report for the period of April 1, 2024 to March 31, 2025. Additionally, the Township overstated current period obligations and current period expenditures by $2,606,935 and $1,204,345, respectively, in the annual project and expenditure report for the period of April 1, 2025 to March 31, 2026. Failure to report accurate obligation and expenditure amounts could result in the Department of Treasury taking action against the Township for failure to comply with programmatic requirements. This noncompliance also resulted in the opinion over this major federal program being qualified. The Township should implement policies and procedures to review the reports prior to submission to help ensure the reports are complete and accurate.
FINDING 2025-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2025 Compliance Requirements: Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-003. Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 21 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to the receipt of direct COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the City was responsible for the effective administration of the federal award, as well as the application of the sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use the SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act, as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet the local needs within four separate eligible use categories. Recipients may use the SLFRF funds to: Respond to the COVID-19 public health emergency and its negative economic impacts. Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work. Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient. Make necessary investments in water, sewer, or broadband infrastructure. The City elected to receive the standard revenue loss allowance, allowing it to claim its total SLFRF funds allocation of $3,821,386 as revenue loss to use for government services. The allocated funds may only be used to cover costs incurred from the period beginning on March 3, 2021, and ending on December 31, 2024. Obligations for costs incurred are required to be liquidated no later than December 31, 2026. During the audit period, the City identified that it had not properly obligated its remaining unspent SLFRF funds by the required deadline. Based on guidance from its financial consultant, the City reevaluated activity recorded in its Coronavirus State and Local Fi fund and adjusted the fund to include health insurance payments that had previously been made from another City fund. These payments related to a contractual agreement executed in July 2024 for coverage from August 2024 through July 2025. Health insurance costs incurred and paid between January and July 2025 totaled $591,563. Of the total SLFRF funds balance, the City had $77,706 in funds that were properly obligated by December 31, 2024, but remained unspent. These obligated funds were reclassified to cover $77,706 of the $591,563 in health insurance costs incurred between January and July 2025, leaving $513,857 of those costs without a corresponding obligation as of the December 31, 2024 deadline. In addition, the City incurred and paid health insurance costs totaling $619,875 for the period August through December 2025, which occurred after the contractual coverage period ended. These costs also were not obligated by December 31, 2024. As a result, a total of $1,133,732 in SLFRF funds expenditures were not obligated within the required timeframe and were not paid within the period of performance. Accordingly, these costs do not meet program requirements and are considered unallowable. The City also did not have written procedures for determining the allowability of costs in accordance with subpart E of C CFR 200. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "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). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "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. (g) Be adequately documented. . . ." 31 CFR 35.5 states in part: "(a) . . . A recipient may only use funds for the purposes enumerated in § 35.6 (b) through (f) to cover costs incurred during the period beginning March 3, 2021, and ending December 31, 2024 . . . (c) . . . A recipient must return any funds that have not been obligated by December 31, 2024, pursuant to orders placed for property and services or entry into contracts, subawards, and similar transactions that require payment other than funds in the amount reported to Treasury by April 30, 2024, as the estimate of funds that the recipient will expend to comply with a requirement under federal law or regulation or provision of the award terms and conditions to which a recipient becomes subject as a result of receiving or expending funds. A recipient must return funds obligated for a use . . . by December 31, 2024, but not expended by December 31, 2026. . . ." Cause A proper system of internal controls over the SLFRF funds expenditures was not designed by management of the City to ensure the SLFRF funds were being used appropriately. The City did not have policies and procedures in place to ensure that its SLFRF funds were properly obligated by the December 31, 2024 deadline. Effect The lack of an effective internal control system enabled material noncompliance with the Allowable Costs/Cost Principles and Period of Performance compliance requirements to occur and remain undetected. Payments made from the SLFRF funds which were not obligated as of December 31, 2024, as required by the federal grant funding resulted in payments not made in compliance with the period of performance, and, therefore, were not allowable costs. Questioned Costs We identified $1,133,732 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the City establish a proper system of internal controls and develop policies and procedures to ensure that expenditures of federal awards are allowable costs and occur within the period of performance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2025 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-005. INDIANA STATE BOARD OF ACCOUNTS 26 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Recipients are required to submit an initial interim report and quarterly or annually submit Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates are based upon the type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The City was classified as a city with a population below 250,000 residents that was allocated less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, an annual P&E report, covering one calendar year from April 1, 2024 to March 31, 2025, was prepared and submitted by the Clerk-Treasurer to the Treasury by April 30, 2025. The P&E report data to be submitted included, but was not limited to, current period and total cumulative obligations and current period and total cumulative expenditures. We were unable to trace the annual P&E report to the City's records. The errors identified were as follows: Total cumulative obligations were overstated by $1,133,732. Current period obligations were understated by $97,891. Current period expenditures were understated by $41,094. Total cumulative expenditures were understated by $2,696. In addition, the P&E report required obligations and expenditures to be reported by project. The City completed the report utilizing total amounts for all projects. There were 11 projects appropriated using the SLFRF funds award. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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). . . ." INDIANA STATE BOARD OF ACCOUNTS 27 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." Cause The City officials appropriated the entire SLFRF award funds in May 2022 and reported the entire award amount as obligated in the P&E reports completed in 2023, 2024, and 2025. City officials were not aware that appropriating the funds alone does not constitute obligations of the award. Additionally, correcting adjustments made after the report was submitted partially contributed to the differences noted in expenditures. City officials were also not aware that obligations and expenditures could not be reported in total but should be reported by project. Effect Without a proper system of internal controls in place that operated effectively, the City did not file an accurate annual P&E report as required under the federal award. As such, the City did not accurately report current period obligations, current period expenditures, cumulative obligations, and cumulative expenditures when filing the P&E report for the period April 1, 2024 to March 31, 2025. As a result, material noncompliance occurred and remained undetected. Noncompliance with the provisions of federal statues, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls and develop and implement reporting policies and procedures to ensure that all required reports are completed and accurate when submitted. INDIANA STATE BOARD OF ACCOUNTS 28 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 29
1. Reporting-Electronic Absentee Systems for Elections (EASE 3.0) Finding Number: 2025-002 Assistance Listing (AL) Number and Title: AL #12.219, Electronic Absentee Systems for Elections (EASE 3.0) Federal Award Identification Number and Year: H98210-23-BAA-0000, 2023 Federal Agency: Department of Defense Compliance Requirement: Reporting Requirement Pass-Through Entity: None Repeat Finding from Prior Audit? No Prior Audit Finding Number: None Noncompliance and Material Weakness 2 CFR § 1104.1 gives regulatory effect to the Department of Defense for 2 CFR § 200.328-329 which states: 2 CFR § 200.328(b) states the Federal entity agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. Page 4 Noncompliance and Material Weakness – (Continued) 2 CFR 200.328(c) stipulates that the recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. From the EASE 3.0 Grant Agreement the recipient shall report the following: Quarterly Progress Reports. The recipient shall provide a quarterly progress report associated with the EASE 3.0 Program no later than thirty (30) calendar days after the end of the quarter. Special Report(s): In the event that activities occur between the scheduled reporting dates, which have significant impact upon the cooperative agreement, the recipient shall inform both the Grants Office, Administrative Grants Officer and FVAP Program Officer immediately when the following types of conditions become know: (a) Problems, delays, or adverse conditions, which will materially impair the ability to meet the objective of the award. This disclosure must include a statement of the action taken, or contemplated, and any assistance needed to resolve the situation. (b) Favorable developments that enable meeting time schedules and objectives sooner or at less cost than anticipated or producing more beneficial results than originally planned. Data Collection Plan All data requirements to be completed and delivered to FVAP within 60 days of each federal general election. Schedule of Data Reporting Requirements Training with FVAP within 30 days of receiving EASE grant funds. Specify the system(s) that were built/improved using EASE grant funds (system for electronic transmission of ballots; system for tracking mailed ballots; system for the use of digital signature verification; other. State the date of deployment for these system(s). Collect the data fields as described on the Data Fields document and record the data on the EASE Grants Data Collection Instrument under their respective columns. Page 5 Noncompliance and Material Weakness – (Continued) Provide any data from previous election cycles (if already collected). This data will be used for comparison purposes and is acceptable in its original format. Collecting and recording non-UOCAVA data to be used for comparison purposes is optional. Quarterly Federal Financial Reports The recipient shall prepare a quarterly financial report (Standard Form 425) in accordance with the Uniform Guidance at 2 CFR 200 and 32 CFR32.52, to the DLNSEO Program Officer, Grants Officer and Administrative Grants Officer. These reports shall also include information on repayment of grants and disbursement of these funds in its quarterly financial reports, associated with the EASE 3.0 Programs. Quarterly Disbursement Schedules The recipient shall provide quarterly disbursement schedules to justify its invoice requests, delivered in coordination with requests for payments. During our testing of the reporting requirements the County did not submit or provide Quarterly Progress Reports, Data Collection Plan, Quarterly Federal Financial Reports or Quarterly Disbursement Schedules. As a result, we have qualified the opinion over this grant. Failure to have the proper controls in place to ensure the completion and submission of the required reports could result in the Department of Defense taking action against the County for failure to comply with programmatic requirements. Failure to monitor the reporting function of a federal program and submit financial reports timely could jeopardize future funding. To help ensure compliance with federal grand guidelines, the Board of Elections should be aware of when reports need to be submitted and ensure reports are being submitted within the specified timeframe.
2025-005 Department of Treasury Federal Financial Assistance Listing 21.027 2022G-ARP-100, 2021 Coronavirus State and Local Fiscal Recovery Funds Reporting Material Weakness in Internal Controls over Compliance Criteria: 2 CFR 200.328 provides the authoritative requirements for reporting grant program performance and the Department of Treasury has published compliance and reporting guidance for the program available online. Controls should be in place for the review of the information required to be reported under the requirements of federal regulations and the specific program to ensure that information is accurate and complete prior before submission to ensure compliance with all applicable requirements. Condition: There was no review performed of the required annual report prior to its submission to ensure the accuracy and completeness of the reported information. Cause: A properly designed control procedure was not established and in place to ensure a review of the required report prior to submission for accuracy and completeness. Effect: While no material errors were noted in the accuracy and completeness of the information ultimately submitted and reported, the lack of a review control procedure by an individual separate from the preparer of the required report increases the risk that incomplete or inaccurate information is reported. Questioned Costs: None reported. Context/Sampling: No sampling was used. Repeat Finding from Prior Year(s): No. Recommendation: We recommend management design and implement a review control to ensure an individual separate from the preparer of the report, with sufficient knowledge and expertise, reviews the report for accuracy and completeness prior to submission. Views of Responsible Officials: Management agrees with the finding.
2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR part 200. 2 CFR 200.302(b)(2) further states, in part, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosures of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 31 CFR § 35.4(c) requires, in part, that during the period of performance, recipients shall provide periodic reports providing detailed accounting of the uses of funds. Additionally, the U.S. Department of the Treasury Coronavirus Local Fiscal Recovery Fund (SLFRF) Award Terms and Conditions, Section 3, provides that "Recipient agrees to comply with any reporting obligations established by Treasury as they relate to this award." The U.S. Department of the Treasury requires non-entitlement unit’s (NEU’s) that are allocated less than $10 million in SLRF Funding to submit an annual Project and Expenditure Report. This report is required to include project descriptions, obligations and expenditures including current period obligation, cumulative obligation, current period expenditure, and cumulative expenditure, and other information. Due to deficiencies in the City's internal controls over SLFRF reporting, the City understated current period obligations by $82,787 in the annual project and expenditure report for the period of April 1, 2024 to March 31, 2025. Additionally, the City overstated current period obligations by $1,399,323 and understated current period expenditures by $1,389,245 in the annual project and expenditure report for the period of April 1, 2025 to March 31, 2026. Failure to prepare and submit accurate reports for all required data elements, including obligation and expenditure amounts, could result in the Department of Treasury taking action against the City for failure to comply with programmatic requirements, such as eliminating or reducing future grant funding or imposing penalties. This noncompliance also resulted in the opinion over this major federal program being qualified. The City should establish and implement policies and procedures to review the reports prior to submission to ensure the reports are accurate, current and complete.
Statement of Condition The results of the procedures performed in the financial and performance reporting requirements showed the following instances of noncompliance: (1) One of the two Federal Financial Report (SF-425) selected on our sample was submitted 5 days after due date to the federal government. Criteria In accordance with 2 CFR 200.328, unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved government wide data elements for collection of financial information at the time of publication the Federal Financial Report or such future, OMB-approved, government wide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances. The Federal awarding agency must use OMB- approved common information collections, as applicable, when providing financial and performance reporting information. According to the terms and conditions of the federal awards of the Teenage Pregnancy Prevention Program, the recipient must submit on a quarterly basis the Federal Financial Report. The FFR is due 30 days after the end of each quarter in the federal fiscal year. Specific due date for the FFR submissions under the Teenage Pregnancy Prevention Program are as follows: • Quarter ending September 30, the FFR is due on October 30 • Quarter ending December 31, the FFR is due on January 30 • Quarter ending March 30, the FFR is due on April 30 • Quarter ending June 30, the FFR is due on July 30 Cause of Condition Lack of follow-up and monitoring procedures by personnel and management to submit required financial reports in a timely basis. Effect of Condition As stated by the federal agency, failure to comply with the reporting requirements may delay processing any pending requests or applications. Recommendation Management must verify that all required reports are prepared, reviewed and submitted on a timely manner. Questioned Costs None. Views of Responsible Officials and Planned Corrective Actions The Organization agrees with the finding and the recommended procedures will be or have been implemented.
Finding 2025-002: Reporting – Significant Deficiency Assistance Listing Number: 12.632 Criteria: 2 CFR Section 200.328 requires that the non-federal entity submit financial reports as required by the Federal award. Condition: During testing of the Institute’s controls over reporting and compliance with reporting requirements, we identified instances where the Institute did not submit all the required financial reports. Cause: Controls and processes were not effectively designed to ensure the timely submission of required reports. Effect: The Institute was not fully compliant with the reporting requirements of the Uniform Guidance. Questioned costs: None Repeat Finding: No. Recommendation: We recommend the Institute review its current processes and controls over reporting to ensure all required reports are submitted timely. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
2 C.F.R. Subpart E § 200.302(b)(2) requires that entities must present accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. 31 CFR § 35.4(c) further states in part that during the period of performance, recipients shall provide periodic reports providing detailed accounting of the uses of funds. The State and Local Fiscal Recovery Funds (SLFRF) annual Project and Expenditure Report requires quantifiable objective criteria containing reported obligations and expenditures for the following Key Line Items: a. Current period obligation b. Cumulative obligation c. Current period expenditure d. Cumulative expenditure The Current Period Expenditures for the Health Department / Records Center / Coroner / GIG Loan on the County's submitted SLFRF Project and Expenditure Report for the grant period ending December 31, 2025 were overstated by $1,059,739. This was due to expenditures paid for using interest revenue were improperly reported as SLFRF grant expenditures in quarter 4. All other amounts were properly reported. Failure to complete and submit accurate reports for required data elements could result in the loss or reduction of future grant funding or penalties imposed by the federal agency. The County should establish and implement procedures to review reports submitted to the federal grantor before submission to ensure that all amounts are reported correctly.
Finding SA 2025-002: Reporting – Federal Financial Report Federal Program Information Assistance Listing Number: 93.918 Federal Program Name: Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Federal Agency: U.S. Department of Health and Human Services Pass-through Entities: Health Resources and Services Administration (HRSA) Contract Number and Name: H7646006, H7646007, H7646008, H7624724 - Ryan White Part C Outpatient EIS Program Compliance Requirement: Reporting Criteria or Specific Requirements Under 2 CFR Part 200.328, a recipient or subrecipient must submit the financial reports required by the federal award. For the Ryan White Part C Outpatient EIS Program, the Notice of Award requires program income to be accounted for using the addition method. In addition, the OMB 2025 Compliance Supplement, Part 6 – Internal Control, requires federal program recipients to maintain effective internal controls over federal award reporting. These controls should ensure that: Data presented is accurate, complete, and in accordance with the award terms Reports reconcile to accounting records and underlying support Review and approval processes are in place before submission Condition In performing reporting testwork over the Foundation’s submitted Federal Financial Report (FFR) for the grant year ending June 30, 2025, we noted that the program income was incorrectly classified and reported under the deduction method, instead of the addition method as required by the Notice of Award. Questioned Costs None. Cause and Effect Per inquiry with the Associate Director of Contract Accounting, the grantor required program income reporting on the FFR for the first time this period, and the guidance provided by the grantor for completing the related data fields was limited. As a result, certain fields were not completed as the grantor intended. The Foundation has requested additional clarification from the grantor to ensure accurate reporting going forward. Recommendation We recommend that management strengthen its controls and implement additional procedures over reporting compliance. These procedures should require management to: • Maintain a central reference and database of program income requirements by ALN, including whether the addition or deduction method applies; • Perform a formal review of FFR preparation to verify that each FFR report aligns with its award-specific requirements; • Provide targeted training regarding grants and Uniform Guidance reporting requirements (2 CFR 200.328) program income rules (2 CFR 200.307); • Perform a formal supervisory review and approval of FFRS before submission; and • Consult with granting agencies on whether a revised FFR is required to be submitted in accordance with grantor reporting requirements.
Material Weakness 2025-003 - Reporting Identification of Federal Programs: U. S. Department of Commerce 11.307 – Economic Development Cluster U. S. Department of the Interior 15.021 - Consolidated Tribal Government Program Criteria: Title 2 CFR 200.328 requires programs to submit financial information to the funding agency using standard financial information to the funding agency using standard financial forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. Condition: During audit procedures the Mi’Kmaq Nation was unable to provide any documentation on the grant reports. Cause: The Mi’Kmaq Nation does not have the necessary internal controls over reporting. Effect: Failure to comply with the reporting requirements could impact the ability to receive continued and future funding for federal programs. Identification of Questioned Costs: None identified. Context: Out of a population of 8 quarterly reports for 2 programs, the Mi’Kmaq Nation was unable to provide required program reporting documents for any of them. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures are established to add controls over reporting to ensure the Mi’Kmaq Nation is compliant with grant reporting requirements including timely submission of reports and maintaining historical files. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Mi’Kmaq Nation.
Significant Deficiency in Internal Control over Compliance Federal Agency: U.S. Department of Justice Federal Program: Crime Victim Assistance Assistance Listing Number: 16.575 Direct Award Number: Not applicable Pass-Through Entity: California Governor's Office of Emergency Services (CalOES) Grant Identifying Numbers: XD-23-02-1199, AT-23-04-1199, XL-23-03-1199 Compliance Requirements: Cash Management and Reporting Criteria: Pursuant to 2 CFR §200.303, the Organization is required to establish and maintain effective internal control over the federal award that provides reasonable assurance that the Organization is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Under 2 CFR §200.328 (financial reporting) and §200.329 (performance reporting) recipients are responsible for monitoring activities under federal awards and must submit required performance and financial reports at the intervals required by the federal award, which may be no more frequent than quarterly and no less frequent than annually. Condition and Context: The pass-through entity changed requirements in January 2025 to require only one signature/certification when they moved to electronic submission of monthly cost reimbursement claims and financial reports from paper submission that required two reviewer signatures. This caused the organization to not have proof of review by way of second signature on file for the submitted financial claims and financial reports although procedurally there was evidence of internal review within the accounting department. Cause: Management did not design and implement documented internal controls requiring supervisory review and approval of cash management activities and federal financial reporting. Effect: The lack of documented internal controls increased the risk that errors, omissions, or noncompliance related cash management and reporting could occur and not be detected in a timely manner. Questioned Costs: Not applicable. Repeat Finding: No Recommendation: We recommend management design and implement documented review and approval controls over the applicable compliance requirements. This should include regular monitoring to ensure controls are consistently applied, and periodic internal audits to assess the effectiveness of compliance systems.Views of Responsible Officials: In January 2025, CalOES moved to an electronic submission of the monthly cost reimbursement claims form and financial reports which only allowed one signature/certification on the form. Prior to 2025, the manual submission required two signatures. Under the new electronic system, the Organization did not have proof of a supervisor review on the electronic form or internally. Since the internal policy and Federal requirements ask for supervisory approval, the Organization will amend internal processes to document supervisory approval beginning in January 2027.
Significant Deficiency in Internal Control over Compliance Federal Agency: U.S. Department of Justice Federal Program: Grants to Encourage Arrest Policies and Enforcement of Protection Orders Assistance Listing Number: 16.590 Direct Award Number: Not applicable Pass-Through Entity: Contra Costa County Employment and Human Services Grant Identifying Number: 15JOVW-22-GG-01810-ICJR Compliance Requirement: Reporting Criteria: Pursuant to 2 CFR §200.303, the Organization is required to establish and maintain effective internal control over the federal award that provides reasonable assurance that the Organization is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Under 2 CFR §200.328 (financial reporting) and §200.329 (performance reporting) recipients are responsible for monitoring activities under federal awards and must submit required performance and financial reports at the intervals required by the federal award, which may be no more frequent than quarterly and no less frequent than annually. Condition and Context: The pass-through entity (Contra Costa County) required use of their form D-15 for the sub awardee organization. That form required only one signature for preparation and submission. As such, a second signature was not on the form as proof of review. Cause: Management did not design and implement documented internal controls requiring supervisory review and approval of federal financial reporting. Effect: The lack of documented internal controls increased the risk that errors, omissions, or noncompliance related to reporting could occur and not be detected in a timely manner. Questioned Costs: Not applicable. Repeat Finding: No Recommendation: We recommend management design and implement documented review and approval controls over the applicable compliance requirements. This should include regular monitoring to ensure controls are consistently applied, and periodic internal audits to assess the effectiveness of compliance systems.Views of Responsible Officials: The Organization is a subrecipient of this grant administered by Contra Costa County. We used one signature during 2025 for preparer and submitter of the financial reporting as has been acceptable to the Contra Costa County for acceptance and processing. Although there was evidence of internal review within the accounting department, the Organization understands the need for second review documentation. A process will be implemented beginning in January 2027 to document the second review signature.
Criteria: In accordance with 2 CFR 200.328, AEA is required to submit performance reports as required by the terms and conditions of the Federal award. These reporting requirements are further described by the pass-through funder to AEA. Condition: During our testing of AEA’s financial and performance reporting requirements, AEA was unable to demonstrate full timely submission of required financial reports and performance reports. Timely compliance submission is required for financial reports and performance reports. For the grants tested, reporting requirements ranged from monthly to quarterly financial and/or performance reports. We noted 18 instances where the financial report was not submitted within the required time frame and 10 instances where the performance report was not filed within the required timeframe. Cause: AEA did not maintain sufficient procedures to ensure required reports were submitted timely and that documentation evidencing submission and review was retained. Effect: Failure to maintain support demonstrating submission of required reports increases the risk that federal awarding agency and pass-through entities may not receive complete, accurate, and timely information necessary to monitor program performance, expenditures, and compliance with Federal award requirements. Questioned Costs: None reported. Context: We tested a sample of financial reports and performance report submitted during the fiscal year and identified 10 out of 20 reports that was submitted after the required due date. Repeat Finding: Not applicable. Recommendation: We recommend that AEA strengthen its reporting controls to ensure all required financial and performance reports are prepared, reviewed, submitted, and retained in accordance with Federal award requirements. Procedures should include maintaining evidence of submission, management review, and monitoring of reporting deadlines. View of Responsible Officials: Refer to management’s corrective action plan.
Finding 2025-002: Untimely Submission of Federal Financial Reports (SF 425) – Reporting – Assistance Listing Numbers: 93.224 and 93.527 Consolidated Health Center Cluster Type of Finding: Significant Deficiency in Internal Control over Compliance (Repeat Finding) Condition: Federal Financial Reports (SF-425) were submitted after the required 90 day reporting deadline, indicating that controls over the timely submission of required federal reports were not operating effectively. Criteria: Title 2 CFR §200.328 requires non-federal entities to submit required financial reports no later than 90 calendar days after the end of the reporting period, unless otherwise specified in the terms and conditions of the federal award. Effect: Failure to submit SF-425 reports timely increases the risk of noncompliance with federal reporting requirements and may result in delayed monitoring, enforcement actions, or other adverse consequences by the awarding agency. Context: During audit testing, instances were identified where SF-425 reports related to the major federal program were submitted after the applicable 90-day deadline. Questioned Costs: None. Cause: Controls and procedures designed to ensure timely preparation, review, and submission of required federal financial reports were not consistently followed, resulting in delayed submission of SF-425 reports. View of Responsible Officials: Management agrees with the finding. Recommendation: We recommend that the Center strengthen internal controls over federal financial reporting by implementing procedures to monitor reporting deadlines, including maintaining a formal tracking mechanism or compliance calendar for SF‑425 due dates, assigning clear responsibility for report preparation and submission, and performing supervisory review to ensure SF-425 reports are submitted in accordance with federal requirements. Planned Implementation Date of Corrective Action: Fiscal Year 2026
Corporation for National and Community Service Federal Financial Assistance Listing #94.012, 22BIICA001 10/1/2022 – 9/30/2025, 23BIACA001 10/1/2023 – 9/30/2026, 23BIFNY001 10/1/2023 – 9/30/2026 Americorps September 11th National Day of Service and Remembrance Grants Reporting Material Weakness in Internal Controls over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.328 and 2 CFR 200.329 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. 2 CFR Part 170 establishes requirements for recipients’ reporting of information on subawards as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA). Condition: Reporting of information on subawards as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA) was not completed for 3 of the subrecipients in which pass through funds exceeded $30,000 and 1 of the subrecipients in which pass through funds exceeded $30,000 was not filed timely. Cause: There was a misunderstanding with management over reporting requirements surrounding amounts passed through to subrecipients. Effect: Not having a clear understanding of FFATA reporting requirements lead to required information not being reported. Questioned Costs: None reported. Context/Sampling: There was a total of 9 federal financial reports, of which 3 were selected for testing. There were a total of 10 FFATA reports, of which 4 were selected for testing. Repeat Finding from Prior Year: Yes, prior year finding 2024-004. Recommendation: We recommend that management review procedures and control processes to ensure they comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement.
Finding number: 2025-001 Federal Agency: U.S. Department of Agriculture Federal program: 10.727 – Inflation Reduction Act Urban & Community Forestry Program Compliance requirements: C. Cash Management; L. Reporting Type of finding: Cash Management - Instance of Noncompliance; Reporting - Significant deficiency Criteria: Cash Management: 2 CFR 200.305(b) requires that advance payments to a non-Federal entity be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. Section E of the award agreement (Advance and Reimbursable Payments) states: "Advance payments must not exceed the minimum amount needed or no more than is needed for a 30-day period, whichever is less. If the Recipient receives an advance payment and subsequently requests an advance or reimbursement payment, then the request must clearly demonstrate that the previously advanced funds have been fully expended…" Reporting: 2 CFR 200.328 and the terms of the award require the submission of periodic financial reports. 2 CFR 200.302(b) requires the non-Federal Organization financial management system to provide for accurate, current, and complete disclosure of the financial results of each Federal award in accordance with the reporting requirements. Condition: Cash Management: The Entity submitted a Request for Advance or Reimbursement (SF-270) for $91,453, the total remaining balance of certain lease agreements charged to the award. Lease payments to the lessors continued on a monthly basis. Of the amount received: • $5,175, three monthly payments, fell within the 30-day cash needs allowed under the award. • $86,278 exceeded the Organization immediate cash needs. • During the year, $34,635 of the excess was used to cover eight monthly lease payments made after the 30-day period. • As of December 31, 2025, $51,643 remained unexpended and was recorded as deferred revenues. Reporting: The semiannual financial reports submitted to the Federal agency for the periods ended December 31, 2025 reported the $91,453 received as cash disbursed, rather than the actual disbursements. As a result, reported cash disbursements were overstated by $51,643. Context: During the year ended December 31, 2025, the Entity submitted 18 payment requests totaling $1,347,437. We selected a nonstatistical sample of 4 payment requests (2 reimbursements and 2 advances) totaling $458,699. The sample was not intended to be, and was not, a statistically valid sample. Cash Management: The condition was noted in 1 of the 4 payment requests tested. The exception was in 1 of the 2 reimbursement requests tested, which included $91,453 for lease payments that had not been made at the time of the request. After receiving these funds, the Entity did not request additional funds for the vehicle leases and has applied the advanced funds to the monthly lease payments. Reporting: We examined the 2 semiannual financial reports submitted during the year. The condition was noted in 2 of the 2 reports examined. Cause: The Organization requested the full amount of a valid lease obligation in advance due to uncertainty surrounding the potential termination or interruption of the federally funded program. The advance exceeded the Organization's immediate cash requirements. Additionally, in its semiannual expenditure report, the Organization reported the full lease amount as cash disbursed although only the periodic lease payments had actually been made. The reporting process did not include an adequate reconciliation of reported cash disbursements to actual payments. Cash Management: The Organization payment request process does not include a review to verify that costs included in reimbursement requests have been paid, that advances are limited to 30-day cash needs, and that prior advances have been fully expended before additional funds are requested. Reporting: The Organization's financial reporting process relies on drawdown records rather than on actual disbursements recorded in the accounting records, and reports are not reconciled to the general ledger before submission. Effect: The Organization held Federal funds in excess of its immediate cash needs for most of the year, contrary to 2 CFR 200.305(b) and the terms of the award, which limited the Federal government's use of those funds. The semiannual financial reports provided the Federal agency with inaccurate information on award disbursements, affecting its ability to monitor the award. Questioned cost: None Identification as a repeat finding: Not applicable Recommendation: We recommend that the Organization: 1. Contact the Forest Service to determine whether the unexpended advanced funds may be returned or may be applied to future cash needs and document the determination. 2. Establish a review and approval procedure, performed before each SF-270 is submitted, to verify that the amount requested does not exceed 30-day cash needs and that previously advanced funds have been fully expended. 3. Correct the affected semiannual financial reports and prepare future reports based on actual disbursements recorded in the accounting records, with an independent review before submission. Views of responsible officials and planned corrective action: Management concurs with the findings. See Corrective Action Plan.
Department of Veteran Affairs FFAL #64.033, 20-SD-136-25, 10/1/2024 – 12/31/2025 VA Supportive Services for Veteran Families Program Reporting Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.328 and 2 CFR 200.329 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition: No review and approval processes were in place over 2 quarterly progress reports. Cause: Management did not have review procedures and processes in place over the quarterly progress reports until the quarter report ending June 30, 2025. Effect: Without review procedures and processes in place over reporting, demonstrating the program complies with laws, regulations, and other compliance requirements is difficult. Additionally, not having an oversight process over reporting could result in a reasonable possibility reports that are inaccurate or incomplete could be submitted. Questioned Costs: None reported Context/Sampling: Included under two award letters of the federal program, one annual financial report and 2 quarterly progress report were reviewed in the Organization’s fiscal year. In addition, two monthly HMIS reports were reviewed in the Organization’s fiscal year. There was a total of 16 reports filed. Repeat Finding from Prior Year: Yes, prior year finding 2024-003. Recommendation: Management implemented procedures and control processes to incorporate an independent review and approval over reporting effective for the quarterly progress report ending June 30, 2025. We recommend to continue following the implemented procedures and control processes and retain documentation to support the review was performed. Views of Responsible Officials: Management is in agreement.
Significant Deficiency U.S. DEPARTMENT OF THE INTERIOR ALN #: 15.658 Federal Award Identification #: F24AC00584 Condition: ABC did not accurately report federal expenditures incurred on the 9/30/25 or 12/30/25 SF-425 reports. Criteria: 2 CFR 200.328 Questioned Costs: $0 Context: 2 out of 4 quarterly SF-425 reports within FY25 had inaccurate expenditures reported. ABC inadvertently did not include 3 months of expenditures and the previous fiscal year-end accruals on the 09/30/25 SF-425 report. While the 12/30/25 report included the 3 months of expenditures missing from the 9/30/25 report, it did not include the previous fiscal year-end accruals. These resulted in total expenditures on both the 9/30/25 and 12/30/25 SF-425 reports to be under-reported. Cause: Oversight by management. Effect: Inaccurate information reported to the grantor regarding grant activity. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that ABC implements a review process to compare expenditures reported on the SF-425 to a cumulative general ledger detail from the beginning of the grant through the report period prior to the quarterly report being submitted. We also recommend that ABC implements a check on the expenditures reported on the first SF-425 report submitted during the fiscal year to ensure that all accruals from the previous fiscal year are included. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Criteria or Specific Requirement: The quarterly reporting requirements were stated in the "2 CFR 200.328 and 31 CFR section 35.1(c) Reporting and requests for other information" section of the Federal Register dated January 27, 2022. The US Department of Treasury requries that quarterly reports be submitted to the department if a county has a populaton below 250,000 residents and are allocated more than $10 million in SLFRF funding. The quarterly reports must be completed and submitted within the next month after the quarterly period ended. Condition: The County was not able to submit a SLFRF quarterly report within the next month after the quarterly period ended. Context: The County had difficulty accessing the SLFRF website due to the County receiving error messages that they have "insufficient access rights on cross-reference id", so it delayed the submission of some of the quarterly reports. Questioned Costs: $0 Effect: The County was not in compliance with SLFRF reporting requirements. Cause: The County received error messages that says they have "insufficent access rights on cross-reference id" and they could not log-in to the SLFRF portal. Repeat: Yes - Years as Repeat Finding: Two 2024-002; 2023-002 Auditor's Recommendation: The County has been able to log-in to the SLFRF portal by the end of the fiscal year, so we recommend that the County submit the quarterly reports within the next month after the quarterly period ended. View of Responsible Officials and Planned Corrective Action: Management acknowledges the finding and has prepared a corrective action plan. The County will submit the quarterly reports within the next month after the quarterly period ended.
2025-001 – Program Reporting Requirements – Internal Control Over Compliance – Significant Deficiency (Repeat Finding) Federal Programs Information: Funding Agency: Department of Health and Human Services Title: Child Care and Development Block Grant (CCDF Cluster) Assistance Listing Number: 93.575 and 93.596 Award number: 21PLOKCCDF Pass-through entity: Sac and Fox Nation Type of Finding: Significant Deficiency in internal control over compliance (reporting) Criteria: Per 2 CFR Part 200.328 (c), the recipient or subrecipient must submit financial reports as required by the federal award. Timely submission of these reports is essential for compliance with the terms and conditions of the federal award. Condition: During our testing, we noted that CTSA’s controls surrounding the reporting function for this program were not operating effectively to ensure that the reports were filed in a timely manner, as required by the terms of the award. Questioned Costs: None. Context: CTSA did not submit its CCDF Financial Report (Form ACF-696T) for the period ended September 30, 2025, due December 29, 2025, until January 9, 2026. Effect: CTSA was not in compliance with the reporting requirements of the noted program. Cause: CTSA did not have an internal control system designed to ensure all reports are submitted by the required due date. Recommendation: We recommend CTSA implement procedures to ensure timely submission of all required reports. Views of Responsible Official: See accompanying Corrective Action Plan.
Finding 2025-003 – Reporting (Significant Deficiency and Noncompliance)- (Repeat finding) Information on the Federal Program: U.S. Department of Education, Higher Education – Institutional Aid, Assistance Listing No. 84.031 Criteria: 2 CFR Part 200.328 and 329 establish reporting requirements for non-federal entities that include timely and accurate reporting. Non-federal entities are also required to establish controls over the reporting process to ensure compliance with reporting requirements. Condition: We selected two annual reports submitted during the year to test for controls and compliance. No documentation of review or approval of the reports was available. In addition, amounts reported on one report did not tie to underlying financial support. Cause: The College did not retain documentation of a review and approval of the reports submitted. The College did not submit an accurate report. Effect: The College did not have appropriate review and approval processes in place or documentation. Questioned Costs: None reported Recommendation: We recommend the College strengthen its policies and procedures over the grant reporting process to ensure controls are properly implemented and working effectively. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.
Nature of Finding: Compliance Finding and Material Weakness in Internal Controls over Compliance - Reporting Criteria/Condition: Federal regulations 2 CFR 200.328 - 200.329 provide that required reporting under the federal program must be completed timely and accurately. Per the federal award agreement, specific reporting requirements with established due dates were outlined. We noted during review of the different reporting requirements that none of the reports required to be filed through September 30, 2025 were filed in a timely manner. Per the federal award agreement, the following reporting requirements were applicable through September 30, 2025: • Performance reports were required to be submitted on a semi-annual basis no later than thirty calendar days after the end of each six-month reporting period. • A written request was required to be submitted to the U.S. Department of Housing and Urban Development (HUD) no later than thirty calendar days after all grant funds were drawn down and the project was completed. Cause/Context: Controls were not in place to ensure timely reporting. Five performance reports required through September 30, 2025 were submitted late. These reports were required to be completed semi-annually subsequent to the grant agreement being signed with due dates ranging from July 2023 through July 2025, but were all filed after September 30, 2025. A written request required after project completion was also filed late as it was due thirty days following the completion of the projects but was not submitted until after September 30, 2025. The lack of controls over these reporting requirements was specific to the housing division of Hope Network and Affiliates. Effect: A lack of controls could result in late or missed reporting. Recommendation: We recommend the Network establish procedures and controls to ensure financial and performance reports are filed timely and that the Network submit all outstanding reports for the federal award. We also recommend that the Network monitor the due date of any upcoming reports, including the final closeout reports. Upon completion of the final close out report, the Network should ensure that the proper allocation of expenditures are communicated to HUD timely and accurately. Views of Responsible Officials and Planned Corrective Actions: Subsequent to September 30, 2025, the Network has filed all over-due semi-annual performance reports and submitted the required written request for confirmation of final drawdown of funds and project completion. The finance department will review all grant agreements and procedures to ensure all required reporting is tracked and filed timely according to grant documents and will develop a uniform process for existing grants across all Hope Network Affiliates.
Finding 2025-001 – Internal Control over Indirect Cost Calculation, Monitoring and Reporting Federal Program – Office of Air and Radiation (OAR) Assistance Listing Number - #66.034 Award Number – XA-84066101 Criteria: Uniform Guidance (2 CFR §200.414) requires that indirect costs charged to federal awards be supported by a current, approved Negotiated Indirect Cost Rate Agreement (NICRA) and applied in accordance with the approved rate and allocation base. Costs charged in excess of the approved indirect cost rate are unallowable. Additionally, Uniform Guidance (2 CFR §200.328) requires that financial reports submitted to federal awarding agencies or pass-through entities, including Federal Financial Reports (FFRs), accurately reflect the allowable costs incurred under the award and be supported by the Organization’s underlying accounting records. Condition: The Organization charged indirect costs to the major federal program in excess of the amount permitted under its approved NICRA for the fiscal year ended September 30, 2025. The Organization’s NICRA has historically been based on a salary and fringe benefits allocation base. During fiscal year 2025, the Organization experienced significant turnover of long-tenured employees, resulting in a substantial decrease in salaries and wages and, accordingly, a reduction in the approved indirect cost rate. As a result, indirect costs were overcharged to the federal program by $96,196. In addition, amounts reported on the annual Federal Financial Report (FFR) to the federal funder were incorrect, reporting the wrong base and charged amounts. The amounts reported on the FFR did not match the actual indirect cost base and charges for fiscal year 2025. Cause: Although the revised NICRA rate reflected the lower salary base, the Organization charged indirect costs throughout the year using actual indirect expenses rather than recalculating allowable indirect costs based on the approved rate. Also, it appears the errors in the FFR were caused by oversight. Effect: The Organization charged unallowable indirect costs totaling $96,196 to the federal program, resulting in noncompliance with Uniform Guidance requirements. This overcharge may subject the Organization to repayment to the federal awarding agency or reduction of a future award. In addition, the FFR submitted to the federal awarding agency was inaccurate and did not reflect the allowable indirect costs. Questioned Costs: $96,196 Repeat Finding: No Recommendation: We recommend the Organization strengthen internal controls over the calculation, monitoring and reporting of indirect costs charged to the federal program. Specifically we recommend that the Organization evaluate and received approval from the federal agency, whether certain costs currently included in the indirect cost pool may be directly charged to the federal award when those costs can be specifically identified with the program and allocated based on actual usage or time incurred, in accordance with Uniform Guidance requirements. Additionally, management should establish documentation and review procedures to support the allocation methodology used for any costs charged directly to federal programs. This approach may help ensure compliance with the approved NICRA while allowing the Organization to recover eligible program costs in a manner consistent with federal requirements. Response: To address this issue going forward, NACAA met with its auditors and accountant to discuss corrective action. It was recommended that some of NACAA’s overhead costs that have traditionally been added to the indirect cost pool (professional fees, rent, office insurance, etc.) be charged as direct costs using NACAA’s grant-related salaries and fringe benefits to allocate expenses between direct and indirect costs. To correct the other issue related to the Federal Financial Report (FFR) errors, NACAA will work with its accountant to complete the required FFRs to ensure that all figures being reported are correct.
Finding: Reporting Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: Department of Treasury Criteria or Specific Requirement: In accordance with 2 CFR 200.328 and 31 CFR section 35.4(c), recipients must adhere to the Treasury’s Recipient Compliance and Reporting Responsibilities, which require accurate completion of the annual Project and Expenditure Report. Required reporting elements include current period obligation, cumulative obligation, current period expenditure, and cumulative expenditure. Management is responsible for establishing and maintaining effective internal control to ensure compliance with these reporting requirements. Condition: The current period obligation and current period expenditures reported in the annual Project and Expenditure Report were inaccurate and did not reflect the underlying supporting documentation. Cause: The City’s internal controls and supervisory review procedures over the preparation of the Project and Expenditure Report were not operating effectively, resulting in incorrect amounts being reported. Effect or Potential Effect: Inaccurate reporting may impair the Department of Treasury’s oversight and monitoring efforts and could result in the City being viewed as noncompliant with federal reporting requirements. Questioned Costs: None reported. Context: During our testing, we recalculated the current period obligation and current period expenditure amounts and identified discrepancies when compared to the amounts submitted in the annual Project and Expenditure Report to the Department of Treasury. Identification as a Repeat Finding: N/A Recommendation: Management should strengthen existing policies and procedures to ensure accurate calculation and reporting of key line items within the Project and Expenditure Report. This should include enhanced supervisory review to verify the accuracy and completeness of the report prior to submission. Views of Responsible Officials: We agree with the finding. See separate report for planned corrective action plan.