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.
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.
Finding 2025-009 – Reporting (Material Weakness and Noncompliance)(Repeat Finding) Identification of the Federal Program: Community Development Block Grants, ALN 14.218, Department of Housing and Urban Development (CDBG) and Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027, Department of the Treasury (CRF). Criteria: 2 CFR 200.328-330 establish the requirements of nonfederal entities for financial and performance reporting that include timely and accurate reporting. 2 CFR 200.303 requires nonfederal entities to establish, document and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Typical control procedures for reporting include having a supervisor review the submitted report and ensuring the work is performed and documented in a way that confirms the accuracy and completeness of all data and information included. Condition: We selected five reports for the two grant programs to test for compliance and controls over reporting requirements. No documentation of review or approval of the reports was available. For CDBG, 2 quarterly cash reports and the FY24 Consolidated Annual Performance and Evaluation Report (CAPER) were tested, one cash report was late. Cause: The City did not retain documentation of a review and approval of federal reports submitted. Effect: The City did not have appropriate controls in place over documentation of reporting requirements. Questioned Costs: None reported. Recommendation: We recommend the City strengthen its policies and procedures over the grant reporting process to ensure controls are properly implemented and working effectively. Views of Responsible Officials: The City agrees with the finding. See Management’s View and Corrective Action Plan included at the end of the report.
2025-006 — Reporting – Significant Deficiency in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2024-006, 2023-007, 2022-005, 2021-002, and 2020-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid ALN Number: 15.027 and 84.031 Award years: Various Criteria: According to 2 CFR Section 200.328, nonfederal entities may be required to submit performance reports at least annually as required by the terms of the federal award. Condition: The College did not submit annual performance reports on time for the programs. Additionally, the annual report submitted for the ALN 15.027 was submitted with inaccurate information. Cause: The College did not have sufficient procedures in place to ensure that the reports were completed timely and accurately. Effect: Submitting inaccurate and untimely reports is noncompliance with grant requirements and could lead to decreased or loss of funding. Questioned Costs: None. Context: The annual reports were not submitted timely, and one report was not accurate. Recommendation: The College should ensure that all grant reports are prepared in a timely manner and are accurate. Management’s Response: The College concurs with the finding. Annual performance reports will be submitted on time as required by the funding agency. Management has developed a comprehensive listing of all reporting requirements and will utilize this information to ensure all reporting requirements are met.
#2025-003 – Major Federal Award Finding – Reporting Nature of Finding: Compliance Finding Reporting and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.328 - 200.329 provide that required reporting under the federal program must be completed timely and accurately. The federal award agreement includes specific report filing due dates. We noted during testing of 12 different required reports, including both financial and performance reports, that 2 of these reports tested were not filed in a timely manner. Cause/Context: Controls were not in place to ensure timely reporting. Two performance reports tested were submitted one day late. Effect: A lack of controls could result in late or missed reporting. Recommendation: We recommend the Organization establish procedures and controls to ensure financial and performance reports are filed timely. Views of Responsible Officials and Planned Corrective Actions: The Organization’s program leadership is playing a more active role in reporting and compliance and is actively involving directors of programs in the process of reporting.
Finding No.: 2025-002 Federal Agency: Environmental Protection Agency AL No. and Title: 66.039 Diesel Emission Reduction Act (DERA) National Grants 98T31601 Federal Award No.: Area: Reporting Criteria: 2 CFR 200.302(a) states that 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 funds. All recipient 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 the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.328(c) states that recipient must submit financial reports as required by the Federal award. Condition: For one grant award during fiscal year 2025, the Authority did not submit the required federal financial report (SF-425) due on December 30, 2024. Cause: The Authority did not maintain an internal monitoring of financial reports required to be submitted during the fiscal year. Effect or potential effect: The Authority failed to submit the required federal financial report during the year and was not in compliance with applicable reporting requirements. Questioned costs: None Finding No.: 2025-002, continued Federal Agency: Environmental Protection Agency AL No. and Title: 66.039 Diesel Emission Reduction Act (DERA) National Grants 98T31601 Federal Award No.: Area: Reporting Context: The Authority did not submit one of the two required SF-425 during the year ended September 30, 2025. The Authority has not incurred any expenditure as of the report submission due date. Recommendation: The Authority should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain a monitoring of financial reports required to be submitted for each grant award. Views of responsible officials: The Authority agrees to the finding. Refer to the corrective action plan.
Finding 2025-001: Finding Type: Noncompliance and significant deficiency in internal control Federal Department: U.S. Department of Health and Human Services Identification of the Federal Program: Assistance Listing Number 93.297 – Teenage Pregnancy Prevention Program, United States Department of Health and Human Services (HHS) Award Number: 5 TP1AH000315-02-00 Compliance Requirements: Matching, Level of Effort, and Earmarking and Reporting Criteria Per 2 CFR 200.303 (Internal Controls), non-federal entities must establish and maintain effective internal control over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Effective internal controls should ensure these requirements are consistently met. Per 2 CFR 200.306 (Cost Sharing), cost-sharing contributions, including third-party in-kind contributions, must be properly documented and allowable. Per 2 CFR 200.328 (Financial Reporting), financial reports must be accurate and complete. The SF-425 Federal Financial Report (FFR) instructions require recipients to report recipient share of expenditures (including cost matching or cost sharing). The Notice of Funding Opportunity #AH-TP1-23-001 for Advancing Equity in Adolescent Health through Evidence-Based Teen Pregnancy Prevention Programs and Services issued by HHS states at section D.3.b.1.s: “For awards that do not require matching or cost sharing by statute or regulation, where ‘cost sharing’ refers to costs of a project in addition to Federal funds requested that you voluntarily propose in your budget, if your application is successful, we will include this non-federal cost sharing in the approved budget and you will be held accountable for the non-federal cost-sharing funds as shown in the Notice of Award (NOA). Failure to meet a cost sharing or matching obligation that is part of the approved project budget on the NOA may result in the disallowance of federal funds. If you are funded, you will be required to report cost sharing or matching funds on your quarterly Federal Financial Reports.” Condition The Fund did not formally track or record the in-kind contribution required for federal award #5 TP1AH000314-02-00 for budget period July 1, 2024 through June 30, 2025. The Fund did not report the recipient share of expenditures on the quarterly SF-425 Federal Financial Reports (FFR) during fiscal year 2025. Through review of supporting documentation compiled subsequent to fiscal year 2025, the auditor verified that the Fund received third-party in-kind contributions via donated services performed during the budget period of July 1, 2024 through June 30, 2025 of $1,119,156, which is $22,521 less than the required cost share per the NOA. However, the Fund submitted a grant amendment to HHS on February 28, 2025 via the Grant Solutions system to reduce the Project Director's effort from 100% to 25% (because she was reassigned to another federal program), which would have reduced the required cost share amount to $1,039,482. Had the Fund's grant amendment request been approved, the Fund would have met and exceeded the required in-kind cost share. The Fund has made numerous attempts to contact HHS to obtain resolution regarding the outstanding grant amendment approval request, to no avail. As of May 29, 2026, the grant amendment has yet to be approved by HHS, and it appears as "in progress" in the Grant Solutions system. Therefore, the auditor was unable to determine whether the in-kind cost share was fully met. Cause When applying for the New York City Teens Connection Expansion project funds for budget period July 1, 2024 through June 30, 2025, the Fund included a voluntary non-federal cost share amount of $1,141,677 in their proposed budget. Upon receiving the federal award, HHS included the $1,141,677 cost share on the NOA as a requirement of the federal award. The Fund was aware of the required cost share, but did not formally track or report the donated services provided toward the cost share requirement during fiscal year 2025 because they thought that voluntary cost share amounts are not required to be formally tracked or reported on the FFR. Effect The Fund’s internal controls did not ensure that #93.297 in-kind contributions were formally documented and reported in accordance with Uniform Guidance requirements during fiscal year 2025. Recipient share of expenditures on the quarterly FFRs was underreported and the federal awarding agency may not have been able to verify the Fund’s compliance with matching requirements. Questioned Costs None. Recommendation We recommend that the Fund implement internal control procedures whereby someone reviews NOAs for any specified cost sharing or matching amounts, including those which are voluntary, and ensure that compliance with such requirements are formally tracked and reported over the life of the award. View of Responsible Officials Management agrees with the recommendation. The Organization’s corrective action plan is on page 45.
The Uniform Guidance, 2 CFR 200.328, requires nonfederal entities to submit financial reports as required by the Federal award. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. We tested four (4) quarterly Federal Financial Reports (SF-425) and identified two (2) instances where the Alabama Law Enforcement Agency (ALEA) did not submit the report within 30 days of the end of the reporting period. ALEA did not have adequate procedures in place to ensure SF-425 quarterly reports were submitted within the required reporting period. As a result, ALEA did not comply with the reporting requirements of the grant which prevented the Federal awarding agency from actively monitoring the program.
Reference Number: 2025-003 Late submission of Project and Expenditure Reports ALN 21.027 Coronavirus State and Local Fiscal Recovery Fund Federal Award Agreement Number: 74-6002544 Award Year: 2024-2025 Federal Agency: U.S. Department of Treasury Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.328 and 31 CFR section 35.4 (c), states metropolitan cities and counties with a population below 250,000 residents that are allocated more than $10 million in SLFRF funding are required to submit quarterly Project and Expenditure Reports. Condition Found: During our review of the quarterly reporting process, CRI identified two quarterly reports that were not submitted timely, ranging from 6 to 10 days late. Cause: Timely submission regarding Q1 and Q3 2025 project and expenditure reports were not maintained. Effect: The Department of Treasury uses the reports internally for oversight purposes and to fulfill Treasury’s transparency and legal obligations. The results of the City not submitting a report timely could lead to a finding of non-compliance, which could result in development of corrective action plan or other consequences. Questioned Cost: $0 Recommendation: We recommend the City to document and maintain all proper controls and review of all quarterly reports that are submitted through the portal to ensure complete and timely reports. Views of Responsible Officials: Management agrees with the findings. See corrective plan beginning on page 11.
Finding F2025-003 – Untimely Submission of Reports Assistance Listing Number: 93.526 Assistance Listing Program Title: Grants for Capital Development in Health Centers Federal Agency: U.S. Department of Health and Human Services – Health Resources and Services Administration (HRSA) Pass Through Entity: Not applicable Federal Award Number: C8ECS44046-01-06 Federal Award Year: September 15, 2021 to September 30, 2025 Compliance Requirement: Reporting Criteria Per 2 CFR §200.328, non-Federal entities must submit accurate and complete Federal Financial Reports (FFRs) in accordance with program requirements. HRSA requires timely submission of financial and program reports as specified in the Notice of Award (NOA), typically within 90 or 120 days after the end of the reporting period. Condition In performing reporting compliance testwork, we noted that the federal financial report (FFR) for the grant reporting period for the year ended September 30, 2025 was not submitted by the required due date. The FFR is due on January 28, 2026. The FFR was submitted 8 days late. Cause The delay resulted from an internal oversight by grant program personnel during the award closeout process. While HRSA granted a time extension for El Proyecto to complete and submit required closeout documentation, management’s efforts were primarily directed towards meeting the extended closeout requirement due date. The annual FFR due date, which is separate from the closeout documentation deadline, was not separately granted an extension by HRSA. Due to the internal oversight and lack of formal monitoring of grant program submission dates, the FFR was submitted beyond the submission due date. Effect Late submission of required grant reports will result in noncompliance with federal grant reporting requirements and may impact future grant funding. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its controls to ensure compliance with grant reporting requirements, as specified in the award documents. We recommend that El Proyecto develop a tracking schedule for grant report submission due dates, maintain formal documentation of reports submitted, increase management oversight, monitoring, and review procedures, and perform additional staff training, as needed, regarding federal grants reporting requirements. Views of Responsible Officials and Planned Corrective Actions Management acknowledges the finding. El Proyecto has implemented corrective actions, including tracking the FFR submission due dates separately from any closeout documentation submission due dates to help ensure both requirements are monitored and completed within the required timeframes. Person Responsible: Ricardo Ornelas Position of Responsible Party: Chief Financial Officer Completion Date: June 1, 2026
Untimely Submission of Federal Financial Reports (SF-425) - Reporting - Assistance Listing Numbers: 93.224 & 93.527 Consolidated Health Cluster Type of Finding: Significant Deficiency in Internal Control over Compliance 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 Organization 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.
Finding 2025-001 – Allowable Costs Requirement – Time and Effort Reporting for Salaries Federal Program: Crime Victim Assistance - ALN 16.575 Consolidated And Technical Assistance Grant Program to Address Children and Youth Experiencing Domestic and Sexual Violence and Engage Men and Boys as Allies – ALN 16.888 Federal Grantor: U.S. Department of Justice Pass-Through Entity / Award: NYS Office of Victim Services (OVS), Contract OVS01-C11248GG – ALN 16.575 Criteria – 2 CFR 200.430(g) requires that charges to a federal award for salaries and wages be based on records that accurately reflect the work performed, supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and that the records reasonably reflect the total activity for which the employee is compensated. Under 2 CFR 200.403, costs must be adequately documented to be allowable, and under 2 CFR 200.405 costs must be allocable to the award based on the relative benefit received. 2 CFR 200.328 requires that financial reports submitted to the pass-through entity be supported by the entity's records. Condition – During the year under audit, the Organization did not consistently apply time and effort reporting that met the requirements of the federal cost principles for all grants. Cause – The Organization did not have an effective internal control system in place for monitoring and documenting wages and salaries charged to federal awards. Effect – Without an effective process to document, review, and reconcile time and effort, the Organization may not have sufficient support that payroll costs charged to federal awards reflect the work actually performed. This increases the risk that personnel costs are allocated incorrectly, unsupported costs are included in federal award expenditures, and federal programs are not charged in accordance with Uniform Guidance allowability and documentation requirements. Questioned Costs – None. After year-end, the Executive Director reviewed salaries and asserted that the amounts charged were reported correctly. Context – ALN 16.575 – In 21 out of 40 tested transactions, timesheets and underlying allocation support did not match to amounts charged to the program. ALN 16.888 – In 17 out of 40 tested transactions, timesheets and underlying allocation support did not match amounts charged to the program. Repeat Finding – No Recommendation – We recommend the Organization formalize the after the fact time and effort process. Views of Responsible Officials – See Corrective Action Plan.
2025-004 Reporting Cluster: Other major program referenced below Sponsoring Agency: Department of Labor Award Names: RETAIN Demonstration Projects Award Numbers: 1947RTN2-02B Assistance Listing Title: Disability Employment Policy Development Assistance Listing Number: 17.720 Award Year: 2024-2025 Pass-through entity: Vermont Department of Labor Criteria 2 CFR 200.328 requires non-Federal entities to submit financial reports as required by the Federal award. Per the award agreement, quarterly financial reports detailing all expenses to date under the award are due no later than the fifteenth of the month being reported. Condition During testing of reporting requirements for award 17.720, we noted that monthly financial reports were submitted to the sponsoring agency; however, the required standard quarterly financial reports were not submitted. Based on communication from the sponsoring agency, although the information required for the quarterly reports was included within the monthly reports, the sponsoring agency clarified that separate quarterly reports were still required. Cause The Dartmouth Health System misunderstood the reporting requirements under the award and thought the quarterly reporting requirements were satisfied by the monthly reports submitted. Effect The Dartmouth Health System did not submit the quarterly financial reports required per the award agreement and was not in compliance with reporting requirements. Questioned Costs None noted. Repeat Finding No Recommendation The Dartmouth Health System should ensure that submission of reports is performed as stated within agreed-upon award agreements and should retroactively submit the quarterly reports that were not submitted. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan is included at the end of this report after the summary schedule of prior audit findings and status.
Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance (Scope Limitation) Federal Agency: U.S. Department of Health and Human Services Federal Program: Centers for Independent Living Assistance Listing Number: 93.432 Direct Award Numbers: 2322CAILCL-00 and 2338CAILCL-00 Pass-Through Entity: California Department of Rehabilitation Grant Identifying Number: 32594 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance – Payroll Expenditures, 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 entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Under 2 CFR §200.403 and 2 CFR §200.405, costs charged to the Federal award must be allowable, allocable, reasonable, and adequately documented. Under 2 CFR §200.403(h) and 2 CFR §200.309, costs must be incurred within the approved period of performance. Under 2 CFR §200.305, for cash management using the reimbursement method, the Organization must maintain records sufficient to support amounts requested for reimbursement and demonstrate that reimbursement requests are based on allowable program expenditures. 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 Organization did not have adequately designed internal controls over the review and approval of allowable payroll activities and payroll expenditures, cash management activities and federal reporting requirements. Specifically, there were no documented review and approval procedures or supervisory controls in place to ensure the accuracy and completeness of time and effort tracking of payroll expenditures, reimbursement requests or financial reports under the federal program. Additionally, sufficient appropriate audit evidence was not available to support compliance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles-Payroll Expenditures, Cash Management and Reporting compliance requirements. The lack of documentation and supporting records resulted in a scope limitation that prevented the auditors from performing necessary procedures to determine whether the Organization complied with applicable federal requirements related to allowed or unallowed payroll activities and allowable costs/cost principles for payroll expenditures, cash management transactions and financial reporting submissions for the population selected for testing. The condition affected the administration of the Centers for Independent Living federal program for the fiscal year ended September 30, 2025.Cause: Management did not design and implement documented internal controls requiring supervisory review and approval of allowable payroll activities and payroll expenditures, cash management activities and federal financial reporting. In addition, management did not maintain adequate supporting documentation to demonstrate compliance with federal requirements. Effect: The lack of effective internal controls increased the risk that errors, omissions, or noncompliance related to allowed or unallowed payroll activities and allowable costs/cost principles for payroll expenditures, cash management and reporting could occur and not be detected in a timely manner. Furthermore, because sufficient appropriate audit evidence was unavailable, the auditors were unable to determine whether the auditee complied with applicable federal compliance requirements related to - allowable payroll activities and payroll expenditures, cash management and reporting. Questioned Costs: Questioned costs could not be determined due to the scope limitation. Repeat Finding: No Recommendation: We recommend that management design and implement formal internal controls over - allowable payroll activities and payroll expenditures, cash management and reporting activities, including documented supervisory review and approval procedures for all time and effort tracking of payroll expenditures, federal reimbursement requests and financial reports. Management should also establish policies and procedures to ensure adequate supporting documentation is retained and readily available to support compliance with federal program requirements and facilitate audit testing. This should include comprehensive training for staff involved in federal program administration, regular monitoring to ensure controls are consistently applied, and periodic internal audits to assess the effectiveness of compliance systems. Views of Responsible Officials: Management Position: Management agrees with this finding. Adequate internal controls over payroll, cash management, and federal reporting were not in place during FY2025 as a direct result of inconsistencies in procedures and internal controls.Corrective Actions: Accountability & Role Clarity: The Executive Director and Program Manager have mapped compliance requirements for each federal award—including expenditure review, reporting, receivables, and deliverables—and assigned clear ownership across management positions to eliminate single points of failure and reinforce segregation of duties. Training & Ongoing Monitoring: All management staff will receive annual training on federal grant requirements (allowable/unallowable costs, period of performance, cash management, and reporting) at the start of each fiscal year. Monthly monitoring meetings among the Executive Director, Program Manager, and Accountant will precede Finance Committee meetings to review grant spending. Periodic internal reviews and a final year-end reconciliation will be conducted. Documentation & Continuity: All grant-related records will be maintained on a shared organizational drive accessible to all responsible staff. Formal onboarding and off boarding procedures for federal grant management will be developed to ensure continuity regardless of personnel changes. The Finance Manual will be updated to reflect all procedures. Hood & Strong has been retained suggests proper internal controls necessary to achieve full federal compliance. All federal award information will be regularly reported to the Board of Directors.
Finding No. 2025-001 – Late Report Filling Federal Program Health Center Program Cluster ALN 93.224 Name of Federal Agency U.S. Health and Human Services Compliance Requirement Reporting Type of Finding: Significant deficiency in internal control over compliance Criteria Title 2 CFR §200.328(a) requires the Federal Financial Report (SF-425). Payment Management System (PMS) HRSA require 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 calendars days. Condition During our review of the SF-425 submitted reports, we noted that one of the reports was submitted after the 90-day requirement. Context From a sample of two (2) financial reports submitted during the fiscal year ended September 30, 2025, one was filed late. Cause The condition was caused by deficiencies in internal control over compliance. Management did not establish adequate monitoring procedures to ensure required reports were prepared and submitted by the applicable deadlines and ensure timely preparation, review, and submission of required reports. Effect Lack of report submission or a delay on report submission may result in regulatory penalties and or additional administrative costs. Questioned Costs There were no questioned costs associated with this finding. Identification as a Repeated Finding This is not a repeat finding from the immediate previous audit. Recommendation We recommend that management strengthen internal controls over the filing process by establishing formal procedures to monitor reporting deadlines, assign responsibility for preparation and review activities, and ensure required filings are submitted in a timely manner. Management should also implement a tracking mechanism, such as a compliance calendar or automated reminders, to improve oversight and prevent future delays. Views of responsible Officials (Unaudited) Refer to the corrective action plan on pages 47-50.
Finding 2025-002: Insufficient Documentation of Management Review of Section 3 Quarterly and Annual Reporting Audit Finding: Significant Deficiency Federal Program: Community Development Block Grant Mitigation Program Citywide Drainage Improvements (Assistance Listing 14.228) Compliance Requirement: Reporting and Special Tests and Provisions – Section 3 Requirements Criteria: In accordance with Title 2 of the Code of Federal Regulations (2 CFR) § 200.303, the City must establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the award. Additionally, 2 CFR § 200.328 requires the City to ensure that reports submitted to the pass-through entity are accurate, complete, and supported by adequate review and oversight. The U.S. Department of Housing and Urban Development’s (HUD) Section 3 regulations at 24 CFR Part 75 require recipients to prepare and submit quarterly and cumulative annual Section 3 reports documenting efforts to provide employment, training, and contracting opportunities to low- and moderate-income persons and businesses within the project area. Condition: The City’s grant administrator is responsible for preparing and submitting the required quarterly and annual Section 3 reports to the Texas General Land Office on behalf of the City. However, there is no documentation demonstrating that City management reviews or approves these reports prior to and after submission. Cause: The City has not established procedures requiring City management to review and document approval of the Section 3 reports prepared and submitted to the Texas General Land Office. Effect: Without documentation of City management review and approval of the Section 3 reports prepared and submitted by the grant administrator, there is an increased risk that reports submitted to the passthrough entity may be inaccurate, incomplete, or not fully compliant with federal reporting requirements. Questioned Costs: None noted. Repeat Finding: This finding is related to the prior year finding 2024-002. Recommendation: The City should strengthen internal controls over federal reporting by establishing and documenting procedures to ensure City management reviews and approves all Section 3 reports prepared and submitted by the grant administrator. Evidence of this review, such as sign-offs or approval correspondence, should be retained in the grant files to demonstrate compliance with Uniform Guidance and HUD Section 3 reporting requirements. View of Responsible Officials: Management concurs with the recommendation. Please refer to the Corrective Action Plan for additional details.
Congressional Directives Assistance Listing Number 93.493 U.S. Department of Health and Human Services Criteria or Specific Requirement – Performance and Financial Monitoring and Reporting, 2 CFR Section 200.328-329 Condition – The annual Federal Financial Report was not submitted timely and required performance reporting was not completed during the year. Cause – Management turnover caused uncertainty in assigned responsibilities, including this reporting requirement. Effect or Potential Effect – The Medical Center did not comply with federal reporting requirements. Questioned costs – N/A Context – The Federal Financial Report for the reporting period ended September 29, 2025 was due December 28, 2025; however, this was not submitted until May 19, 2026. Additionally, a performance report was due during the year; however, it was not completed. The performance report for the period September 30, 2024–March 31, 2025 was due April 30, 2025. Identification as a Repeat Finding, if applicable – N/A Recommendation – The Medical Center should review reporting requirements in grant award documents for all federal awards to ensure compliance. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. The issue was identified in May 2026 and the required reporting was completed and submitted. Going forward management has established a protocol by which reports for federal funding shall be submitted timely.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2025 Comment #2025-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE-OUT, AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED GENERAL (Repeat) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The close-out process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. While there has been improvements, we noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and other close-out procedures accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2025. We also noted significant weaknesses in internal controls over payroll and recording various journal entries related to payroll transactions and fringe benefits. Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). The systemic cause appears to be the change in the accounting staff and continuing education and training in grant accounting. Policies and procedures are not up-dated and followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] 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 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency's chief financial officer (CFO) should require the grant accountant and a general ledger accountant to receive annual training by professionals in the field of grant accounting and reporting. The payroll clerk should receive proper training in processing journal entries for all areas of payroll. All accounting staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will require additional specialize training for fiscal staff and improve in the segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The CFO will take lead in financial reporting to ensure that all reporting meet GAAP and GAS requirements and to provide informative reports for Board and Management. All enhancements will be implemented by June 30, 2026.
Strengthening Institutions Program – Department of Education Federal Financial Assistance Listing #84.031 P031A080196 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 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: Section 3 of the Title III Endowment Report for the year ending June 30, 2024, was completed materially incorrect for Type of Savings Account Security line items and Total Invested line item. Cause: There was a lapse within the internal control process ensuring the report was completed materially correct. Effect: The annual report was completed materially incorrect and filed with the Department of Education. Questioned Costs: None. Context/Sampling: No sampling was utilized. The only report required to be filed in the fiscal year was tested. Repeat Finding from Prior Years: Yes. Recommendation: The University should review their current internal control process to ensure required reports are completed materially correct. Views of Responsible Officials: Management agrees with the finding.
Finding 2025-003 Lack of Internal Controls over Reporting Federal Agency: U.S. Department of Education Federal Program(s): Indian Education – Tribal Leaders of Tomorrow Assistance Listing Number(s):84.299A Award Number(s): S299A200024-24 Award Years: 2024 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: All recipients are required to submit an annual Grant Performance Report providing the most current performance and financial expenditure information that is sufficient to meet the reporting requirements of 2 CFR 200.328, 200.329 and 34 CFR 75.720. Yukon Flats is required to submit quarterly performance reports within 30 days after the end of each quarter. Condition and Context: The client was unable to locate the annual report that was submitted for the program. Additionally, they were unable to show that the annual report or the quarterly reports were submitted timely. Cause: Lack of internal controls related to reporting requirements and employee turnover at the District. Effect: Lack of internal controls over reporting could allow requirements to be missed that could in turn lead to a loss of funding. Repeat Finding: This is not a repeat finding. Questioned Costs: None reported. Recommendation: We recommend that management implement stronger internal controls over reporting, specifically to retaining supporting documentation of timely submission. Management Response: Management concurs with this finding. See Corrective Action Plan.
Finding 2025 - 002 Untimely Submission of Federal Reports Federal Agencies: U.S. Agency for International Development Federal Programs: Foreign Assistance for Programs Overseas Assistance Listing Numbers: 98.001 Pass-through Entities: JSI Research & Training Institute, Inc. and RTI International Award Identification Number and Year: 7200AA22CA00011, 2022 and 72066923CA00003, 2023 Criteria or Specific Requirement: Per 2 CFR § 200.328(b)(1), recipients are required to submit performance and financial reports “no less frequently than annually and no more frequently than quarterly” and “not later than 30 calendar days after the reporting period end date for quarterly or semi-annual reports, and 90 calendar days for annual or final reports” unless otherwise specified by the Federal agency or pass-through entity. Timely submission ensures the awarding agency has current and accurate information to monitor the recipient’s financial performance and compliance. Condition: During our testing of BRAC USA's compliance with Federal reporting requirements, we noted that required Federal Financial and Programmatic Reports were not submitted to the passthrough entities within the time frames specified in the grant terms and conditions. Specifically, 3 of 4 reports tested were submitted between 8 and 10 days after the required due dates.Cause: The delinquent submissions occurred because of delays in reconciliation of financial data and support provided by BRAC USA's subrecipients which contributed to the late filings. Effect or Potential Effect: Failure to submit required financial reports on time reduces transparency and impairs the Federal awarding agency’s ability to effectively monitor grant performance. Continued noncompliance may result in sanctions, delayed payments, or other administrative actions by the Federal agency. Questioned Costs: Costs associated with qualitative monitoring measures are not identifiable. Context: During our audit, we examined three financial reports and one programmatic report. We noted 2 of the 3 financial reports and the programmatic report were late. Identification as a Repeat Finding, if applicable: Not a repeat finding Recommendation: BRAC USA should strengthen internal controls over Federal reporting to ensure timely submission of required financial reports. This should include, establishing a reporting calendar with due dates and reminders, assigning responsibility for preparation and review of reports, and implementing a secondary review process to verify timely submission and accuracy. The recommendations should also be communicated to BRAC USA's subrecipients to ensure any required financial or programmatic data is submitted in a timely manner.
Congressional Directives, U.S Department of Health and Human Services, Federal Assistance Listing #93.493; Contract No. 90XP0658-01-00 Condition: The amount of expenditures covered by the report period were inaccurately reported to the federal granting agency. Criteria: In compliance with Title 24 CFR Subpart D Post Federal Award Requirements §200.302 Financial management (b): The financial management system must provide for (2) Accurate, current, and complete disclosure of the financial results of each Federal award program in accordance with the reporting requirements set forth in SS 200.328 and 200.329.” Cause: The error stems from a clerical oversight related to evaluating the amount of expenditures at the wrong date, as the transactions in the final month of the reporting period had not been closed out by the Organization at the time the report was prepared. Effect: The Organization failed to report the actual amount of expenditures in accordance with the program requirements, resulting in an understatement of $85,195 on the report. Failure to submit accurate funding and financial data could result in loss of future funding. Recommendation: Management should perform an internal review over inputs into federal financial reports before they’re submitted, to verify that inputs are accurate and cover the appropriate reporting period.
2025-001: Significant Deficiency - Reporting U.S. Department of Education Pass-through Oregon Department of Education Child Nutrition Cluster – AL #s 10.553, 10.555, 10.559 and 10.582 Criteria – Management is responsible for ensuring reporting meets the Reporting Principles as required by 2 CFR §200.302, §200.328 and program regulations, where information reported is complete, accurate and timely. Monthly claim reports submitted through the state reporting system must accurately reflect reimbursable meals served Condition – The District submitted monthly child nutrition reimbursement claims that contained inaccurate meal counts for multiple months during the fiscal year. Specifically, the District overstated reimbursable meal counts due to errors in including nonreimbursable meals served. Additionally, the claims were not subject to an independent review prior to submission to ensure accuracy and completeness. Cause – The District did not have a formalized review and reconciliation process for monthly child nutrition claims and responsibilities for claim preparation and review were not adequately segregated. Effect or potential effect – As a result, the District received federal reimbursements in excess of allowable meals served. Based on audit procedures performed, the resulting questioned costs were less than $25,000, which is below the Uniform Guidance reporting threshold and therefore not required to be reported. Recommendations – We recommend the District enhance internal controls by implementing an independent review to the reporting process to ensure meal counts are properly calculated prior to submission. Views of Responsible Officials and Planned Corrective Actions – Management agrees with this finding. Management will revisit internal controls and independent review processes to ensure meal counts reported are in accordance with requirements as defined in 2 CFR §200.302, §200.328 and program regulations.
Finding 2025-001: Information on the Federal Program: Assistance Listing Number 20.106—Airport Improvement Program (AIP). Award Number(s): 3-49-0024-063-2023, 3-49-0024-065-2024, 3-49-0024-064-2024. Compliance Requirement: Reporting Type of Finding: Noncompliance. Criteria: 2 CFR § 200.328(a) requires that the non-federal entity submit financial reports as required by the terms and conditions of the federal award, including the frequency and due dates for submission. The federal awarding agency or pass-through entity must use OMBapproved information collections, such as the SF-425A (federal financial report) to collect financial information from recipients. The AIP grant agreements further specify the requirement for timely submission of the SF-425A as a condition of the award. Condition: The City did not submit the required federal financial report for the AIP grant within the required reporting deadline – within 90 days after the end of the fiscal year. Cause: The City program staff and management did not have complete understanding and oversight regarding federal reporting deadlines. Effect or Potential Effect: Failure to submit required federal financial reports in a timely manner may result in noncompliance with federal award terms, potential delays in future funding, and increased risk of federal sanctions or additional monitoring by the awarding agency. Questioned Costs: None identified as the finding relates to a reporting compliance issue. Context: Of the required reports for the fiscal year, the federal financial report for the AIP grant was submitted approximately one year and 3 months late (December 8, 2025). Recommendation: The City program staff and management should implement procedures to ensure timely submission of all required federal financial reports. Procedures should include establishing a tracking system for necessary reports and deadlines as well as providing training to program staff responsible for submission of required reports.
2025-001 – Significant Deficiency– Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement(s): Period of Performance and Reporting ALN 21.027 U.S. Department of the Treasury Criteria: The District was a subrecipient of Ohio’s K-12 School Safety Grant Program. Under Uniform Guidance, 2 CFR §§200.77 and 200.309 require that all costs be incurred within the grant’s period of performance, and §200.344 mandates liquidation of obligations by the specified deadlines, which were December 31, 2023 for encumbrances and September 30, 2024 for liquidation. For reporting, §§200.302(b) and 200.328 require accurate financial and programmatic reporting to the pass-through entity. Condition: The District liquidated $72,970 in expenditures after September 30, 2024, which was beyond the grant’s period of performance. In addition, quarterly reports did not accurately reflect the timing of expenditures, resulting in discrepancies between reported and actual activity between quarters. Context: Our testing focused on expenditures near the end of the performance period and included a review of all four quarterly reports. Multiple reports contained errors in the timing of reported expenditures compared to actual disbursements. Cause: The District lacked controls to prevent expenditures beyond the grant’s performance period and did not have adequate review procedures for quarterly reporting. Effect: The questioned costs may be subject to disallowance, creating a potential liability for the District. Inaccurate financial reporting also increases the risk of improper drawdowns, misinformed oversight, and potential impact on future funding decisions. Questioned Costs: $72,970 Repeat Finding: No Recommendation: We recommend that the District establish and enforce controls to ensure all expenditures are incurred and liquidated within the grant’s period of performance, implement a documented review process for quarterly grant reporting that includes reconciliation to the general ledger prior to submission, and develop a documented training schedule to ensure staff understand Uniform Guidance requirements for compliance with period of performance and reporting. Views of Responsible Officials: See management’s response in the District’s Corrective Action Plan.
Finding 2025.002 - Reporting - Material Weakness Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name and Assistance Listing Number: Head Start Cluster, 93.600 Federal Award Identification Number and Year: 01CH011268-05-01 (2024), 01CH012890-01-01 (2024), 01CH011268-05-03 (2024) Name of Pass-through Entity (if applicable): N/A Criteria In accordance with §200.328 Financial Reporting and 200.329, Monitoring and Reporting Program Performance, recipients and subrecipients must submit financial and performance reports as required by the award. Under the requirements of the Federal Funding Accountability and Transparency Act (“FFATA”) that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to identify awards subject to FFATA, collect and report information on each first tier subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System. Condition A SF-425 report was not properly supported by accounting records or reviewed prior to filing. Additionally, the Federal Funding Accountability and Transparency Act ("FFATA") report for the subrecipient was not filed. Cause CLC lacks sufficiently documented policies and procedures related to the grant's reporting requirements. CLC experienced a change in personnel. Management did not maintain supporting documentation for the SF-425 report and did not have the report reviewed prior to submission. Additionally, management was unaware of the FFATA reporting requirement. Effect or Potential Effect Inadequate documentation of policies and procedures for reporting requirements and controls over the preparation and review of reports resulted in the untimely filing of required reports causing there to be noncompliance with the reporting requirement set forth by the Uniform Guidance. Lack of review and support may result in the improper reporting of activity to the granting agency. Questioned Costs None Context One of two SF-425 reports was tested. The report tested did not have supporting documentation or evidence of review. The entity was required to submit 1 FFATA report, which was not submitted. Identification as a Repeat Finding This is not a repeat finding. Recommendation We recommend that management establish and formally document comprehensive policies and procedures for the reporting process. These policies and procedures should clearly outline all required reports, filing timelines, and the method for maintaining supporting documentation. We recommend that CLC develop and implement a standardized checklist outlining all required grant compliance requirements. The checklist should clearly identify the individual responsible for preparation and the individual responsible for review. Additionally, both the preparer and reviewer should document their completion of the review to provide evidence that compliance requirements have been appropriately verified. Views of Responsible Officials Children’s Learning Centers of Fairfield County, Inc. concurs with this finding. Management will establish and formally document grant reporting policies and procedures for the Head Start Cluster, including a centralized compliance calendar, required deliverables list, and a standardized checklist for each reporting package (including SF-425 and FFATA subaward reporting, as applicable). All reports will be supported by underlying accounting records, retained in a centralized repository, and subject to documented preparer and independent reviewer sign-off prior to submission. CLC will provide staff training and cross-training to maintain continuity during personnel changes.