2024-003 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds - ALN 21.027 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.328 of the Uniform Guidance, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal awarding agency. The compliance supplement identifies four Key Line Items required to be reported to the federal awarding agency which include (1) current period obligation, (2) cumulative obligation, (3) current period expenditure and (4) cumulative expenditure. An obligation is an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment. Condition: As of the March 31, 2024, reporting date, the Town reported project amounts voted by the Select Board as obligated rather than purchases, contracts and agreements that met the Federal criteria of an obligation. Cause: The Town did not interpret the reporting requirements of the award properly. Effect: The Town’s reporting for obligations were overstated by approximately $520,000. Questioned Costs: None Repeat Finding from Prior Year: No Recommendation: The Town should implement procedures to reconcile the financial information in the Project and Expenditure reports to the Town’s contract and purchasing files before submission. Views of Responsible Official: Management agrees with the finding.
2024-006 Improve Internal Controls and Compliance Over Reporting Federal Program(s) Information Federal Agency: Department of Transportation Award Name: National Infrastructure Investments Assistance Listing Number: 20.933 Award Year: 2024 Compliance Requirement: Reporting Federal Agency: Department of Housing and Urban Development Award Name: Lead Hazard Reduction Demonstration Grant Program Assistance Listing Number: 14.905 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal control over Federal awards to provide reasonable assurance that the City is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the award. Further, per 2 CFR 200.328 and program instructions, recipients must submit accurate, complete, and timely financial reports (such as the SF-425 Federal Financial Report) that reconcile to supporting accounting records, including the general ledger and Schedule of Expenditures of Federal Awards (SEFA). Condition and Context During our testing of two quarterly SF-425 Federal Financial Reports for both the National Infrastructure Investments program and the Lead Hazard Reduction Demonstration Grant program, we noted that the amounts reported on the reports did not agree to the amounts per the general ledger and ultimately the SEFA. The discrepancies were the result of inaccurate recording of expenditures in the general ledger based on timing as discussed in finding 2024-001, which led to inconsistent reporting on the SF-425 reports. Cause The City’s internal controls over financial reporting were not sufficient to ensure that expenditures were recorded accurately and consistently in the general ledger and SEFA and that reported amounts on the SF-425 matched the underlying accounting records. Effect or Potential Effect Inaccurate reporting of expenditures increases the risk of noncompliance with Federal reporting requirements and impairs the reliability of financial information reported to Federal agencies. No questioned costs are reported as the requirement is procedural in nature and costs reported were ultimately deemed allowable. Recommendation The City should strengthen its controls over financial reporting for Federal awards to ensure all expenditures are recorded accurately in the general ledger and SEFA and reconciled to amounts reported on the SF-425. Management should implement procedures for timely and thorough review and reconciliation of accounting records prior to the submission of required Federal reports. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-006 Improve Internal Controls and Compliance Over Reporting Federal Program(s) Information Federal Agency: Department of Transportation Award Name: National Infrastructure Investments Assistance Listing Number: 20.933 Award Year: 2024 Compliance Requirement: Reporting Federal Agency: Department of Housing and Urban Development Award Name: Lead Hazard Reduction Demonstration Grant Program Assistance Listing Number: 14.905 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal control over Federal awards to provide reasonable assurance that the City is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the award. Further, per 2 CFR 200.328 and program instructions, recipients must submit accurate, complete, and timely financial reports (such as the SF-425 Federal Financial Report) that reconcile to supporting accounting records, including the general ledger and Schedule of Expenditures of Federal Awards (SEFA). Condition and Context During our testing of two quarterly SF-425 Federal Financial Reports for both the National Infrastructure Investments program and the Lead Hazard Reduction Demonstration Grant program, we noted that the amounts reported on the reports did not agree to the amounts per the general ledger and ultimately the SEFA. The discrepancies were the result of inaccurate recording of expenditures in the general ledger based on timing as discussed in finding 2024-001, which led to inconsistent reporting on the SF-425 reports. Cause The City’s internal controls over financial reporting were not sufficient to ensure that expenditures were recorded accurately and consistently in the general ledger and SEFA and that reported amounts on the SF-425 matched the underlying accounting records. Effect or Potential Effect Inaccurate reporting of expenditures increases the risk of noncompliance with Federal reporting requirements and impairs the reliability of financial information reported to Federal agencies. No questioned costs are reported as the requirement is procedural in nature and costs reported were ultimately deemed allowable. Recommendation The City should strengthen its controls over financial reporting for Federal awards to ensure all expenditures are recorded accurately in the general ledger and SEFA and reconciled to amounts reported on the SF-425. Management should implement procedures for timely and thorough review and reconciliation of accounting records prior to the submission of required Federal reports. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Finding 2024-002 – U.S. Department of Education (USDE) Higher Education Emergency Relief Fund (HEERF) Programs (significant deficiency): Information on the Federal Programs – HEERF Historically Black Colleges and Universities (HBCU), 18004(a)(2), FAL No. 84.425J, June 30, 2024. Criteria – Federal regulations: CARES Act 18004(e), CRRSAA 314(e), 2 CFR 200.328, 2 CFR 200.329, 34 CFR 75.720(b). Condition – Non-compliance noted regarding untimely filing of quarterly and annual report. Questioned Costs – Noted within each finding below. Context – We noted the following in connection with our testing of compliance: a) Our review of the required quarterly and annual report submissions revealed the College failed to submit the annual performance report, and one (1) quarterly report was submitted untimely. Cause – Administrative oversight. Effect – Reporting deadlines were missed. Repeat Finding – No. Auditor’s Recommendation – The College should strengthen controls and oversight over grant reporting to assure that all reporting requirements are being met accurately and timely. Views of Responsible Officials – The HEERF department and reporting systems were closed, and Grants personnel were unable to retrieve a copy of the required reports from the ESF Data Collection System by the suggested deadline of May 19, 2025. A reporting calendar was implemented in August 2025 along with other policies and procedures outlined in the corrective action plan attached. All future reports will be submitted timely under this protocol.
Condition and Context Bebashi failed to maintain an accurate trial balance and general ledger to support certain account balances resulting in auditor journal entries at year-end which were material to the current year financial statements and audit delays due to support not reconciling and multiple versions of the trial balance being provided. Criteria Accounting principles generally accepted in the United States of America and Government Auditing Standards require that the design or operation of internal control over financial reporting should allow management or employees in the normal course of performing their assigned functions to prevent, or detect and correct, misstatements on a timely basis. 2 CFR 200.303 states, “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework,’ issued by the Committee of Sponsoring Organizations of the Treadway Commission.” 2 CFR 200.302 states, “The financial management system of each non-Federal entity must provide for the following… accurate, current, and complete disclosure of each Federal award or program in accordance with the reporting requirements set forth in sections 200.328 and 200.329.” Cause As a result of financial constraints, and corresponding staffing challenges, the accounting and finance team at Bebashi was unable to prepare its accounting records on a timely and thorough basis. At the same time, the accounting and finance team was faced with other administrative and operational matters requiring immediate attention to help ensure Bebashi remained operational. The financial and staffing constraints resulted in lack of timely preparation and detailed review of accounting records and analysis which resulted in material audit adjustments. Effect or Potential Effect The accounting records of certain account balances and transactions provided to the auditors were inaccurate for a period of time during the fiscal year and for the year ended June 30, 2024. In certain instances, the related reconciliations and analysis were not performed on a timely basis. This caused adjustments proposed by the auditors that were material to the financial statements. Recommendation We recommend that management implements a more detailed and adequate review of the accounting records including strong processes and internal controls surrounding financial reporting. This process should identify the required accounting records and reconciliations, ensure the existence of preparer and reviewer requirements for the accounting records and reconciliations, and implement an appropriate time frame for the completion of accounting records and reconciliations. We recommend that management implements processes and procedures to identify the required financial reporting deadlines and controls to ensure compliance with the deadlines. Views of Responsible Officials Management agrees with the finding above. Management will review the existing accounting policies and procedures and implement additional steps and controls to incorporate the recommendations above. Subsequent to year-end, management of Bebashi hired a new Director of Finance. Management will review the operational resources available to further expand the finance team and do so accordingly.
2024-003 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds - ALN 21.027 Material Weakness in Internal Controls Over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.328 of the Uniform Guidance, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal awarding agency. The compliance supplement identifies four Key Line Items required to be reported to the federal awarding agency which include (1) current period obligation, (2) cumulative obligation, (3) current period expenditure and (4) cumulative expenditure. An obligation is an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment. Condition: As of the March 31, 2024, reporting date, the Town’s Project and Expenditure report had reported cumulative expenditures that were understated by approximately $148,000 and cumulative obligations were overstated by approximately $3,505,000. Additionally, the Project and Expenditure report for the period ending March 31, 2024, was not filed until March 25, 2025. Cause: The Town did not reconcile the Project and Expenditure report with the Town’s general ledger before submitting. Additionally, the Town had a lack of formal review process to make sure the report was filed in a timely manner. Effect: The Town did not properly report grant expenditures and obligations in the Project and Expenditure report that was filed nearly eleven months after the deadline. Questioned Costs: None Repeat Finding from Prior Year: No Recommendation: The Town should implement procedures to reconcile the financial information in the Project and Expenditure reports to the Town’s general ledger and contract files within a timely manner of reporting deadline. Views of Responsible Official: Management agrees with the finding.
2024-006 Performance Reporting Deadlines Compliance Requirement Reporting Category Significant Deficiency in Internal Control and Noncompliance ALN 12.607 Program Community Economic Adjustment of Establishment, Expansion, Realignment, or Closure of a Military Installation Federal Agency US Department of Defense Criteria Per 2 CFR § 200.328 and 2 CFR § 200.329, non-federal entities must submit performance and financial reports as required by the federal awarding agency or pass-through entity. These reports must be accurate, complete, and submitted timely, as outlined in the terms and conditions of the award. Condition The Authority failed to submit required federal reports in accordance with the deadlines established in the Notice of Award, with an average delay of approximately 146 days. Specifically, the Quarterly Performance Reports, Final Performance Report, and Federal Financial Report (FFR) were submitted after their respective due dates, resulting in noncompliance with federal reporting requirements. Cause The Authority did not implement adequate tracking and oversight mechanisms to ensure timely submission of required reports. This may reflect deficiencies in internal controls related to grant management and compliance monitoring. Effect Late submission of federally required reports hinders the ability of the awarding agency and pass-through entity to monitor project progress, assess financial accountability, and ensure compliance with grant terms. Continued noncompliance may result in administrative actions, including restrictions on future funding. Questioned Costs None Repeat Finding Disclosure This finding was reported in the prior year’s Single Audit and was marked as corrected. However, based on current audit procedures and documentation reviewed, the corrective action was not effectively implemented, and the condition persists. Therefore, this finding is considered repeated and unresolved. Refer to item 2022-001. Recommendation The Authority should strengthen its internal controls over grant reporting by assigning clear responsibilities for the preparation and timely submission of required reports. Additionally, relevant personnel should receive training on federal reporting requirements to ensure ongoing compliance. Views of Responsible Official (Unaudited) Refer to Corrective Action Plan
Finding 2024-003 – Internal Controls Over Reporting (Material Weakness) Condition: The City did not report accurate expenditures during the year in its Project and Expenditure Quarterly Reports for the uses of ARPA funding. The reports contained incorrect project amounts and expenditure classifications due to internal control deficiencies, including insufficient review by someone other than the preparer. Criteria: Per 2 CFR 200.302(b)(3) and 2 CFR 200.328, recipients of federal funds are required to maintain accurate financial records and report expenditures in accordance with federal award terms. Specifically, recipients of ARPA funding are required to submit accurate quarterly Project and Expenditure Reports to provide transparency and ensure funds are used in compliance with allowable purposes. Cause: The inaccuracies resulted from a lack of sufficient internal controls over the reporting process. Specifically: No independent review was performed to validate the accuracy and completeness of the quarterly reports. Documentation of the expenditure allocation process was not consistently maintained to support the reported amounts. The timing of the prior year audit limited the City’s ability to implement corrective measures before the FY2025 reports were due. Effect: The lack of accurate reporting undermines compliance with the reporting requirements of the federal award. Although no unallowable costs were identified, the inaccuracies may necessitate correction of reported amounts in the future. Recommendation: We recommend that the City strengthen its internal controls over the reporting process by: 1. Identify and correct previous reporting amounts and balances to ensure the lifetime project is properly reported. 2. Implementing a formal review process where quarterly reports are reviewed and approved by a designated individual other than the preparer. 3. Establishing a documented process for reconciling expenditures reported to the underlying accounting records and federal award guidelines. 4. Providing training to staff responsible for the preparation and review of federal compliance reports to ensure familiarity with reporting requirements. Management’s Response: See Corrective Action Plan.
Criteria or specific requirement: In accordance with 2 CFR 200.358 the recipient must submit financial reports as required by the Federal award. The grant requirements state that the recipient must submit form SF-425 on a semi-annual basis for the periods ending March 31 and September 30, or any portion thereof. 2 CFR 200.328(c) requires these semi-annual reports be submitted no later than 30 days after the reporting period. Per Uniform Guidance 2 CFR 200.303, non-federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The College did not submit the required SF-425 report for the period ending March 31, 2024. Questioned Costs: None. Context: During our testing of financial reports, the College was unable to provide the SF-425 report for the period ending March 31, 2024. Cause: The College was not aware that this report had not been submitted. Effect: The College was not in compliance with the Department of Commerce regulations for timely and accurate reporting of the SF-425 report. Repeat Finding: No. Recommendation: We recommend the College review its reporting procedures to ensure all reports are completed and submitted timely. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Unknown Pass-Through Agency: State of Rhode Island Department of Administration Pass-Through Number(s): Unknown Award Period: March 3, 2021 – December 31, 2026 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: In accordance with 2 CFR 200.328 and 31 CFR section 35.4(c), the City is required to submit quarterly “Project and Expenditure Reports” which are due 30 days after the end of each quarterly period. Condition: During our testing, we noted the City did not have adequate internal controls designed to ensure the quarterly reports were completed accurately. Questioned costs: None Context: During our testing, it was noted that the City did not accurately report the current period expenses and cumulative expenditures, or the revenue loss calculations for each of they quarterly reports. Cause: Lack of controls surrounding the preparation of quarterly reports. Effect: Failure to comply with Uniform Guidance and Treasury reporting requirements may result in questioned costs, audit findings, and potential recoupment of federal funds. Recommendation: We recommend the City implement procedures to ensure the accuracy of quarterly reporting and maintain supporting documentation for each of the amounts reported. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: HIV Prevention Activities: Non-Governmental Organization Based Assistance Listing Number: 93.939 Federal Award Identification Number: NU65PS923746 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Compliance – Reporting Criteria or specific requirement: Per 2 CFR §200.302 and §200.328, recipients of federal awards must provide accurate, current, and complete disclosure of financial results of each federally-sponsored project or program in accordance with the reporting requirements of the federal awarding agency. Condition: It was noted that the expenditures reported on the FFR matched the cash receipts for the period rather than the actual expenditures incurred. Questioned costs: $45,667 Context: During the testing of reporting compliance of the contract during the fiscal year ended 6/30/24, we identified errors in the interim Federal Financial Report (FFR) reporting during the period of 4/1/23-9/30/23 for the actual expenditures in the amount of $45,667. This overstatement in reporting of expenditures at the time of the report submission remained unspent for extended periods, contrary to federal requirements. Cause: The Organization lacked effective internal controls to reconcile actual expenditures incurred within reporting periods. The process relied on estimates and did not include timely reconciliation of actual costs. Effect: This deficiency resulted in noncompliance with federal reporting requirements. It also indicates a reasonable possibility that material noncompliance with federal requirements may not be prevented or detected and corrected on a timely basis. Repeat finding: No Recommendation: We recommend that management implement procedures to ensure that expenditures reported on the Federal Financial Report reflect actual costs incurred during the reporting period and are supported by appropriate documentation. Staff responsible for preparing the Federal Financial Report should be trained in federal reporting requirements to ensure compliance. Views of responsible officials: There is no disagreement with the audit finding. See Corrective Action Plan.
FINDING NO. 2024-005 PROGRAM REPORTS AND ACCOUNTING RECORDS Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Federal Financial Assistance Listing 14.228 Community Development Block Grants/State’s Program and Non- Entitlement Grants in Hawaii Federal Award No: B-18-DP-72-0001 Compliance Requirement: Reporting Questioned Costs: None Repeated Finding: Yes Criteria: The subrecipient agreement between the Bank and the Puerto Rico Department of Housing (PRDOH), establishes in the Terms and Conditions Part IV. Performance, Monitoring and Reporting, Section B. Reporting, that the Bank as Subrecipient shall submit regular monthly progress reports to the PRDOH, on the form and with the content to be specified and required by the PRDOH. Moreover, the subrecipient agreement between the Bank and the PRDOH, establishes in the Terms and Conditions Section Part III-Scope of Work, sub-section A. (2), that all services shall be made in accordance with PRDOH guidelines, HUD guidelines and regulations, and other applicable state and federal laws and regulations. The CDBG-DR Financial Policy of the Puerto Rico Department of Housing, (the Financial Policy), in its Part 7 Accounting Records and Systems, Section 7.1.2 Subrecipient Accounting Records, establishes that the Bank as subrecipient is responsible for ensuring that separate accounting are maintained for CDBG-DR funds in its internal accounting system and records. These records should, to the extend possible, be developed to be consistent with PRDOH CDBG-DR general accounting and recordkeeping policies. Also, the Financial Policy in its Part 13 Reconciliations, establishes that the Bank as subrecipient, must have procedures in place to reconcile accounts and reports by comparing revenues and expenditures against disbursements for CDBG- DR funded activities. The subrecipient must: Maintain in its accounting records the amounts budgeted for eligible activities. Compare actual obligations and expenditures to date against planned obligations and expenditures: and Report deviations from budget and program plans and request approval for budget and program plan revisions. The Code of Federal Regulations, 2 C.F.R., Part 200, Subpart D, Section 200.302 (b) (2), establishes that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Condition and Context: Monthly Reporting The Bank uses the Grant Compliance Portal (GCP) to submit Administrative and Performance Reports to the PRDOH. The GCP is a performance reporting system created for PRDOH to monitor regular monthly progress by the subrecipient for administrative and performance activities. The GCP is independent of other systems used for the underwriting, approval, closeout and billing of the grants to PRDOH. As such, requires the manual input of the information monthly. Once the Bank completes the information in the GCP, it is reviewed by PRDOH. Review notes related to the performance of the Bank are added before finalizing the report. The signed report by all the points of contact is kept by the Bank as evidence of compliance with the submission of the Administrative and Performance Reports by the due date. We compared the amount of grants awarded as per the Administrative and Performance Reports submitted to the PRDOH with the amount reported in the Schedule of Expenditures and Federal Awards as of June 30, 2024. We noted a difference of $25,766,191 due to grants awarded from January 2024 through June 2024 were not reflected in the Administrative and Performance Reports. This caused a discrepancy in the cumulative actual total amount of grants awarded for the year that impacts the results in the monitoring of performance by PRDOH. The Bank needs to reconcile the figures with the accounting system to confirm the information for the period is properly reflected in the Administrative and Performance Reports before the submission of the report to ensure the monitoring performed by PRDOH is based on correct and reliable information. Accounting Records and Reconciliations In relation to the CDBG-DR Fund, although disbursements are recorded in a separate fund, the Bank does not present, on a monthly basis, the revenues, expenses, assets, and liabilities in the Bank’s general ledger. Instead, the Bank is recording the transactions as revenues, expenses, assets, and liabilities related to the CDBG-DR fund at year end. The CDBG-DR fund activity is monitored in another system that is maintained parallel to the Bank’s general ledger. This additional system is used for the reporting process but is not monitored and reconciled jointly with the Bank’s general ledger. Entity level controls related to monthly approvals, reconciliations, actual versus budget comparisons, and other financial reporting controls are performed in another system that does not make automatic interface with the Bank’s general ledger. The trial balance maintained by management for internal and external reporting related to CDBG-DR funds had not been reconciled with the subsidiary records for grant expenditures, including both direct and indirect costs. Cause: The management of the Bank has not implemented effective internal control procedures that permit the proper reconciliation of the amount of grants awarded per accounting records with the amounts disclosed in the Administrative and Performance Reports. Effect: The absence of proper internal controls in the areas of program reports and accounting records causes the Bank to fall in noncompliance with federal reporting requirements and the terms and conditions as established in the subrecipient agreement. This matter may result in material differences or errors that could not be detected and resolved on a timely basis and consequently we consider that the above conditions are material weaknesses in internal control over compliance. Recommendation: The Bank should ensure, specifically to the CDBG-DR Fund, that adequate procedures and internal controls related to monthly review, reconciliation and approval are in place to ensure that proper monthly accounting is maintained and that the awarded grants per accounting records are reconciled and agreed to the balances as disclosed in the Administrative and Performance Reports. Evidence of such reconciliations must be maintained as support for the reconciliation procedures performed.
Criteria: In accordance with 2 CFR 200.328 and 32 CFR section 35.4(c), the Grantee is required to submit Project and Expenditure Reports that are to include the Total Cumulative Expenditures and Total Current Period Expenditures. Condition: The Town of Oakland reported an incorrect amount of Total Cumulative Expenditures and Total Current Period Expenditures on the March 2024 Project and Expenditure Report and the Town of Oakland, Tennessee also reported an incorrect amount of Total Current Period Expenditures on the March 2025 Project and Expenditure Report. Questioned Costs: None. Context: We reviewed the annual Project and Expenditure Reports for March 2024 and March 2025. Effect: Overstatement of total cumulative expenditures and total current period expenditures on the March 2024 annual Project and Expenditure Report and overstatement of total current period expenditures on the March 2025 annual Project and Expenditure Report. Identification of a repeat finding: N/A – not a repeat finding. Cause: Human error in entering amounts. Also, the Town of Oakland, Tennessee, does not have any procedures in place to verify that the correct amounts are reported. Recommendation: Checks and balances should be in place for any numeric calculations used in the reporting on the annual Project and Expenditure Reports. Views of responsible officials and planned corrective actions: Management agrees. See separately issued Corrective Action Plan.
Federal Agency: U.S. Department of Homeland Security Pass-Through Agency: Central Office of Recovery, Reconstruction and Resiliency of Puerto Rico (COR3) Program: Disaster Grants – Public Assistance (Presidentially-Declared Disaster) (ALN 97.036) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency in Internal Control (SD), Instance of Noncompliance (NC) This finding is similar to prior year finding 2023-009. Statement of Condition In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of nine (9) projects for two quarters of fiscal year 2023-2024. During our audit procedures, we noted that the reports did not agree with the accounting and project records. Criteria 2 CFR 200.302 (a) states that the states’ and other non-Federal entities’ financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Cause of Condition The Municipality’s accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities. Effect of Condition The expenses reported in the Quarterly Progress Reports do not agree with the accounting records. Recommendation We recommend the Program Administrators reconcile the differences between the quarterly report and the accounting records before the submission to the pass-through entity. Questioned Costs None Views of Responsible Officials and Planned Corrective Action We will give instructions to the accounting staff in charge of the preparation of the quarterly progress reports of the Program, in order to comply with the FEMA reporting requirements. Responsible Official: Mrs. Irma M. Vargas Aguirre, Finance and Budget Director Implementation Date: December 31, 2025
Federal agency: Federal Aviation Administration Federal program title: Airport Improvement Program Assistance Listing Number: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 to June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria: Federal Aviation Administration (FAA) guidelines require Airport Improvement Program recipients to submit periodic financial reports, including SF-425 (Federal Financial Report), Form 5100- 127 (Operating and Financial Summary), Form 5100-126 (Financial Government Payment Report), Form 5370-1 (Construction Progress and Inspection Report), and Form SF-271 (Requests for Reimbursement) in accordance with 2 CFR §200.328 and §200.329. Condition: During our testing, we noted that for each of the County’s seven Airport Improvement Program grants, only Form SF-271 was submitted for the audit period, despite requirements to submit five distinct report types per grant. Questioned costs: None Context: We initially sampled 31 of 105 reports required to be submitted during the year by the granting agency. 11 of the 11 SF-271 reports were received from the county and tested without exception. The department explained that Forms SF-425, 5100-127, 5100-126, and 5370-1 had not been submitted for the year under audit and therefore could not be provided. Cause: The aviation department was previously not aware of the reporting requirements of the grant. When the department became aware of the requirements they began working with the FAA to ensure all required reports were submitted. The delay in becoming aware of these requirements resulted in a significant backlog to be submitted which was exacerbated by understaffing at the department. Effect: The County’s failure to submit four of the five required reports for each of its seven Airport Improvement Program grants resulted in noncompliance with FAA reporting requirements under 2 CFR §200.328 and §200.329. This lack of reporting may impact the County’s ability to demonstrate proper stewardship of federal funds, delay reimbursement processing, and potentially affect future grant eligibility or funding decisions. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends that the County provide staff with training related to identifying and complying with grant requirements. Additionally, CLA recommends that the County implement tracking procedures, such as a monitoring checklist, to ensure all required reports are submitted in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.
Finding: 2024-003 Timely Financial and Programmatic Reporting (Significant Deficiency) Information on the Federal Programs: ALN #10.937 Partnerships for Climate-Smart Commodities Criteria or Specific Requirement (including Statutory, Regulatory, or Other Citation): Per 2 CFR 200.328(b)(1), recipients must submit financial reports at intervals required by the Federal awarding agency, but no less frequently than annually and no more frequently than quarterly. Reports must be submitted no later than 30 calendar days after the reporting period end date. Per 2 CFR 200.329(b), recipients are required to submit performance reports at intervals required by the Federal awarding agency, but no less frequently than annually and no more frequently than quarterly. Performance reports must also be submitted no later than 30 calendar days after the reporting period end date.Condition: During our testing of quarterly reporting requirements, we noted the following: Financial Reports: Four of four (100%) quarterly financial reports were submitted after the 30-day deadline. Performance Reports: Three of four (75%) quarterly performance reports were submitted after the 30-day deadline. Detailed Progress Reports: CIF was unable to provide evidence of submission (such as electronic confirmation or date-stamped copies). As a result, we were unable to determine whether these reports were submitted timely. Cause: These issues occurred due to delays in internal review processes and the absence of a robust tracking system for reporting deadlines. Additionally, documentation supporting the submission of the detailed progress reports was not retained. Effect or Potential Effect: Untimely submission of required reports limits the Federal awarding agency’s ability to evaluate financial and program performance in a timely manner. The lack of submission documentation for detailed progress reports also creates a risk that required reports may not be submitted at all, which could impact continued funding, create compliance findings, and impair the Federal awarding agency’s oversight responsibilities. Questioned Costs: N/A Context: Our testing included 100% of required quarterly reports for the audit period. We identified late submission for 100% of financial reports and 75% of performance reports. For detailed progress reports, no documentation was available to confirm submission for the entire period reviewed. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that management: 1. Implement controls, such as a reporting calendar with automated reminders, to ensure that financial and performance reports are prepared, reviewed, and submitted within 30 days of the quarter-end, in compliance with 2 CFR 200.328(b)(1) and 2 CFR 200.329(b). 2. Retain submission confirmations for all reports, including detailed progress reports, to provide an audit trail and evidence of compliance with Federal requirements.
2024-007 U.S. Department of Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Significant Deficiency in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR section 200.328 of the Uniform Guidance, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal agency. The compliance supplement identified four Key Line Items required to be reported to the federal awarding agency which include (1) current period obligation, (2) cumulative obligation, (3) current period expenditure and (4) cumulative expenditure. Condition: As of the March 31, 2024 reporting date, the Town’s Project and Expenditure report had reported cumulative expenditures that were approximately $29,900 less than what was recorded in the grant fund on the general ledger. Cause: The Town did not reconcile the Project and Expenditure report with the Town’s general ledger before submitting. Effect: The Town did not properly report grant expenditures in the Project and Expenditure reporting. Questioned Costs: None Repeat Finding from Prior Year: Yes; Finding 2023-008 Recommendation: The Town should implement procedures to reconcile the financial information in the Project and Expenditure reports to the Town’s general ledger before submission. Views of Responsible Official: Management agrees with the finding.
FINDING 2024-014 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-014. Condition and Context The system of internal controls over the applicable reports, as established by the School Corporation, was not properly implemented nor was it operating effectively to ensure that sufficient audit evidence was maintained to support the requests for reimbursement, as well as the Final Expenditure Reports submitted by the School Corporation. The Title I Director approved the requests for reimbursement and the Final Expenditure Reports prior to submission; however, this review was not effective. The fiscal years 2021-2022 and 2022-2023 Final Expenditure Reports and the six reimbursement requests were selected for testing. The School Corporation was unable to provide for audit documentation to support the underlying data accumulated and summarized in each of the Financial Expenditure Reports or the six reimbursement requests. The reported data could not be traced to records that accumulate or summarize the data; therefore, the accuracy and completeness of the reports could not be verified. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 47 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Due to turnover of staffing in the School Corporation's administrative office, the School Corporation's management had not designed nor implemented a system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and available for audit related to the Reporting compliance requirement. Effect Without a proper system of internal controls in place that operated effectively, the School Corporation did not retain and provide appropriate supporting documentation. This prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation will be maintained and made available for audit as related to the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Federal Program American Rescue Plan Act, Assistance Listing No. 21.027 Criteria Per U.S. Treasury American Rescue Plan Act reporting requirements and 2 CFR §200.328, recipients are required to submit complete and accurate Project and Expenditure reports in a timely manner as prescribed by the grantor. Condition The entity did not submit the required Project and Expenditure report for the American Rescue Plan Act program by the applicable federal due date. Cause The entity did not have a formal process or monitoring control in place to ensure American Rescue Plan Act Project and Expenditure reporting deadlines were identified, tracked, and met. Effect Failure to submit Project and Expenditure reports timely may result in delayed reimbursements, increased risk of noncompliance with federal requirements, potential questioned costs, and could negatively impact future ARPA funding or other federal grant awards. Questioned Costs None. Recommendation We recommend the City implement internal controls to perform a timely closing of the audit, which would include the preparation of the schedule of expenditures of federal awards. This would allow for the timely submission of required report to the federal government. Repeat Finding Not repeating. Managements Response See Corrective Action Plan.
2024-008 Federal Agencies: U.S. Department of Agriculture Federal Program Names: The Child Nutrition Cluster: National School Lunch Program Summer Food Service Program Assistance Listing Numbers: 10.555 10.559 Pass-Through Agency: Commonwealth of Pennsylvania, Department of Education Pass-Through Number: 359-46-477-8 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance Criteria: Uniform Guidance requires recipients to submit accurate, complete, and timely financial and performance reports for federal awards (2 CFR 200.327 and 200.328). Program specific reporting instructions for the Child Nutrition Cluster require the FNS 10 and FNS 418 to be filed within 30 days after month end. Condition: As part of the reporting requirements for the CBS Food Program under the National School Lunch Program (NSLP) and Summer Food Service Program (SFSP), management is responsible for submitting the FNS 10 (NSLP) and FNS 418 (SFSP) reports within 30 days after month-end. However, management was unable to provide five (5) monthly NSLP reports and one (1) monthly SFSP report requested for audit testing. Questioned Costs: None Cause: Management did not maintain adequate internal controls to ensure that required monthly program reports were properly completed, retained, and available for audit. This may include weaknesses in recordkeeping processes, staff turnover, or insufficient monitoring of reporting deadlines. Effect: Failure to maintain and provide required federal reports results in noncompliance with federal reporting requirements. Because key source documents were unavailable, auditors were unable to verify the accuracy, completeness, and timeliness of reported program activity for those months. This increases the risk of misreporting or unsupported claims being submitted to the federal government. Recommendation: The Organization should establish and enforce strengthened internal controls over federal reporting to ensure that all required monthly reports (FNS 10 and FNS 418) are: (a) completed accurately, (b) submitted on time, and (c) retained in accordance with federal record retention requirements (2 CFR 200.334). Management should designate responsible personnel and implement a monitoring process to ensure compliance. Views of Responsible Officers and Corrective Action Plan: Please refer to Community Benefit Solutions dba CBS Food Program’s Corrective Action Plan
Finding 2024-006 – Compliance; Internal Control over Compliance, Reporting (Material Weakness) Name of Federal Agency: U.S. Environmental Protection Agency Federal Program Name: Nonpoint Source Implementation Grants Assistance Listing Numbers: 66.460 Pass-Through Entity: Oregon Department of Environmental Quality Name of Federal Agency: U.S. Department of Commerce – National Oceanic and Atmospheric Administration Federal Program Name: Pacific Coast Salmon Recovery Program Assistance Listing Numbers: 11.438, 15.015, 15.244 Pass-Through Entity: State of Oregon – Oregon Watershed Enhancement Board (OWEB) Name of Federal Agency: U.S. Department of Agriculture Federal Program Name: National Fish and Wildlife Foundation Assistance Listing Numbers: 10.665 Pass-Through Entity: U.S. Forest Service Name of Federal Agency: U.S. Department of AgricultureFederal Program Name: Natural Resources Conservation Service Assistance Listing Numbers: 10.905 Pass-Through Entity: U.S. Forest Service Name of Federal Agency: U.S. Department of the Interior Federal Program Name: Wildlife, Sport Fish and Restoration Program Assistance Listing Numbers: 15.244 Pass-Through Entity: Bureau of Land Management Name of Federal Agency: U.S. Department of the Interior Federal Program Name: Secure Rural Schools and community Self-Determination – Watershed and water-quality improvements Assistance Listing Numbers: 15.234 Pass-Through Entity: Bureau of Land Management Criteria: Under 2 CFR 200, recipients must submit performance and financial reports as required by the terms and conditions of the award and must retain records sufficient to demonstrate compliance (see (§200.301Monitoring and reporting program performance, and §200.328 Financial reporting, §200.329 Monitoring and reporting program performance, and §200.334 Retention requirements for records). The grant agreements for awards above require timely submission of performance / progress reports by specified due dates, with documentation maintained to support the submitted information. Condition: For the fiscal year ended June 30, 2024, the auditee could not provide sufficient evidence that required reports for the programs listed were prepared, reviewed, and submitted in accordance with grant terms. Specifically: No provided required financial reports, and Partnership for the Umpqua Rivers lacked copies or evidence of submission, and support for reported amounts requested. Auditors were not provided with performance/progress reports and were instructed that Partnership for the Umpqua Rivers had no retained copies, review sign-offs, or submission confirmation. Where payments were received, support for the required reports or metrics were not retained and could not be supplied to auditors for reconciling to underlying records. Cause: Management has not implemented formal reporting controls, including: A documented reporting calendar with due dates and responsible staff, Reconciliation of report amounts to the accounting records, Retention procedures for report copies, underlying support, and submission confirmations, and Supervisory review evidenced by signatures or workflow approvals. Effect or Potential Effect: Absent evidence of timely, accurate reporting and adequate record retention: The organization is at risk of noncompliance with federal award conditions, Inaccurate financial or performance information may be reported to the funding agency, and The entity may be subject to remedial actions, including heightened monitoring, repayment of questioned amounts, or potential suspension of funding. Questioned Cost: None directly noted, but potential risk if reports were incomplete or inaccurate.Context: During our audit, it was found that the Partnership for the Umpqua Rivers experienced complete staff turnover in Financial Management for the year being audited. No current finance employees had worked for the organization during the year being audited. Award files provided to auditors did not contain information related to reporting of activity, expenditures, or progress of the awards. Repeat of a Prior-Year Finding: No, Prior- year did not require a Single Audit. Recommendation: We recommend that Partnership for the Umpqua Rivers: Establish a formal reporting and retention policy aligned with 2 CFR 200 and grant terms. Implement a centralized reporting calendar that tracks due dates, preparers, reviewers, and submission methods. Require reconciliations of financial reports to the general ledger and supporting schedules, retain the reconciliation with the reporting package. Create standard workpapers for performance metrics for each award. Configure the grant portal or document management system to retain submission confirmations, reports, receipts, and version -controlled copies of all reports for awards. Document supervisory review through sign-offs prior to submission and with evidence retained. Provide training to staff on Uniform Guidance requirements and record retention (§200.334). District Response: Partnership for the Umpqua Rivers acknowledges the deficiencies. Corrective Action Plan: ____________ (To be completed by Partnership for the Umpqua Rivers) Planned Implementation Date: _____________ Responsible Person: Partnership for the Umpqua Rivers Finance Manager
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-through Agency: Northampton County Pass-Through Number: N/A Award Period: May 18, 2022 - December 31, 2025; October 1, 2022 - December 31, 2025 May 18, 2023 - December 31, 2025 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria: Uniform Guidance requires recipients to prepare, submit, and retain accurate, complete, and timely financial reports for federal awards in accordance with 2 CFR §§ 200.327 and 200.328. Additionally, federal record retention requirements (2 CFR § 200.334) require organizations to maintain supporting documentation sufficient to substantiate reported program activity. Condition: During audit testing of financial reporting for the Coronavirus State and Local Fiscal Recovery Funds program, the Organization was unable to locate three of ten financial reports requested for review. As a result, auditors were unable to verify the accuracy, completeness, or timeliness of the reported financial information for those reporting periods. Questioned Costs: None. Context: Ten reports were requested for audit testing and management was unable to provide three of the requested reports. Cause: The Organization experienced turnover within the finance department, which contributed to inadequate document retention and weaknesses in controls over the preparation and maintenance of required financial reports. Effect: Failure to maintain and provide required financial reports constitutes noncompliance with federal reporting and record retention requirements. The absence of key source documentation limits assurance that reported program activity is accurate and supported and increases the risk of misreporting or unsupported claims being submitted to the federal government. Repeat Finding: N/A: Not a repeat finding Recommendation: The Organization should strengthen internal controls over financial reporting and record retention by establishing clear procedures to ensure that all required reports are accurately prepared, timely submitted, and retained in accordance with federal requirements. Management should designate responsible personnel and implement monitoring procedures to verify compliance with reporting and documentation standards. View of Responsible Officials and Planned Corrective Action: Please refer to Community Action Committee of the Lehigh Valley, Inc. and Subsidiaries’ Corrective Action Plan.
U.S. Department of Environmental Protection Agency Passed through State Department of Natural Resources and Conservation FFAL# 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Reporting Material Non-compliance Material Weakness in Internal Control Criteria: • 2 CFR §200.303 requires non-federal entities to establish and maintain effective internal control over federal awards. • 2 CFR §200.328 requires recipients to submit accurate financial reports and maintain records that support the data reported. Condition: The District does not have documented internal controls over the preparation and review of federal financial reports. During our testing, we noted: • For one quarterly report, the District used an incorrect reporting period. • For both sampled reports, the District did not maintain the required supporting documentation in the reporting package to substantiate the amounts reported to the cognizant agency. Cause: The District has not implemented documented internal controls over the reporting process and did not ensure that supporting documentation was retained for amounts reported. Effect: Failure to maintain accurate reporting and supporting documentation increases the risk of noncompliance with Uniform Guidance and may result in questioned costs or misreporting to the cognizant agency. Questioned Costs: None to report. Context/Sampling: A nonstatistical sample of two reports were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the District: • Develop and implement documented internal controls over the reporting process, including review procedures to ensure accuracy of reporting periods. • Maintain complete supporting documentation in the reporting package for all amounts reported to the cognizant agency. • Provide training to staff responsible for preparing and reviewing reports to ensure compliance with Uniform Guidance requirements. Views of Responsible Officials: Agree.
FINDING NUMBER 2024-002 REQUIREMENT REPORTING TYPE OF FINDING MATERIAL WEAKNESS FEDERAL PROGRAM 14.871 – SECTION 8 HOUSING CHOICE VOUCHERS CONDITION The Municipality did not submit or file the required FASS PH financial report for the fiscal year ended June 30, 2024. At the completion of the audit, the report remained outstanding and had not been uploaded to the FASS PH system, resulting in noncompliance with HUD’s reporting requirements. CRITERIA Entities administering the Section 8 Housing Choice Voucher Program (AL 14.871) must submit annual financial information to the U.S. Department of Housing and Urban Development (HUD) through the Financial Assessment Subsystem – Public Housing (FASS PH). This requirement is established under: • 2 CFR 200.327–200.328 (Uniform Guidance reporting requirements) • HUD Uniform Financial Reporting Standards (UFRS) • HUD Public Housing Assessment System (PHAS) – FASS PH requirements • Applicable HUD notices and guidance for FY 2024 These regulations require timely submission of complete and accurate financial data to allow HUD to evaluate the financial condition and compliance performance of the Municipality’s Housing Choice Voucher Program. CAUSE The failure to submit the FASS PH report resulted from insufficient internal controls over the financial reporting process. Contributing factors included: • Lack of a formal monitoring process to track HUD reporting deadlines • Inadequate supervisory review of required submissions • Limited staff knowledge of HUD’s UFRS and FASS PH reporting procedures EFFECT Non-compliance may result in HUD administrative actions, negative impact on the municipality’s financial assessment score, delays or interruptions in federal funding and potential for increased oversight or monitoring by HUD. QUESTIONED COST None RECOMMENDATION The municipality should establish and document formal internal controls to ensure timely preparation and submission of the FASS PH report. Assign responsibility to specific personnel and implement a compliance calendar for HUD reporting deadlines. Provide training to financial staff on HUD reporting requirements, UFRS, and the FASS PH system. Implement a supervisory review process to verify completeness and accuracy before submission. Submit the outstanding FASS PH report as soon as possible, if HUD still permits late filing. PRIOR YEAR FINDING None VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION The Municipality of Comerío made a contract with an auditing firm to work on the reports and submission of the FASS-PH financial report compliance for the years in which the reports were not submitted. Furthermore, instructions were given for the HUD Coordinator to monitor the delivery of reports by the contracted auditing firm and to ensure that the contract for this service is finalized. Personnel in charge: Brenda L. Reyes Rivera, HUD Coordinator Compliance period: April 30, 2026
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of the Treasury (TREAS) Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds ALN and Program Expenditures: 21.027 ($230,448,761) Award Numbers: Various - see table of award numbers Federal Award Year: Various - see table of award numbers Questioned Costs: None Compliance Requirement: Reporting Finding 2024-003: Failure to Accurately Prepare Performance Reports for the COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Program Condition Found: GOMB did not prepare accurate federal project and expenditure reports (Paperwork Reduction Act (PRA) 1505-0271) for the COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program. The State was required to prepare quarterly federal project and expenditure reports (PRA 1505-0271) for the CSLFRF program. To assist the State agencies, GOMB prepared these reports. According to the U.S. Treasury’s SLFRF Compliance and Reporting Guidance, expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. During our testing of two quarterly PRA 1505-0271 reports submitted during State fiscal year ended June 30, 2024, we noted that GOMB did not consistently apply cash or accrual basis for reporting and noted the following errors on the cash basis: "See Table in the Audit Report" Supervisory review procedures of the PRA 1505-0271 reports have not been designed to operate at an appropriate level of precision to ensure the financial reports are accurately prepared. Criteria or Requirement: 2 CFR 200.328 requires grantees to submit PRA 1505-0271 reports with the frequency required by the terms and conditions of the federal award. The State and Local Fiscal Recovery Funds: Project and Expenditure Report User Guide requires grantees to submit quarterly reports with current financial information, including current period and cumulative obligations and expenditures. In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure financial information reported in required financial reports is complete and accurate prior to submission. Cause: In discussing these conditions with GOMB officials, management stated the reporting errors were a result of inaccurate information submitted to GOMB by other State agencies which were not detected. Possible Asserted Effect: Failure to prepare complete and accurate financial reports prevents the U.S. Treasury from effectively monitoring the CSLFRF program. Repeat Finding: A similar finding was reported in the prior year audit as finding code 2023-003. (Finding Code 2024-003, 2023-003) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB implement more precise review procedures to ensure the reports submitted to the U.S. Treasury are complete, accurate, and agree or reconcile to its financial records. Views of GOMB Officials: GOMB agrees with the recommendation. GOMB will continue to work with the State agencies to produce accurate financial reporting for the CSLFRF program.
State Agency: Illinois Department on Aging (IDOA) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Aging Cluster ALN and Program Expenditures: 93.044/93.045/93.053 ($68,210,944) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Reporting Finding 2024-050: Failure to Accurately Prepare Financial Reports for the Aging Cluster Condition Found: IDOA did not prepare accurate federal financial status reports for the Aging Cluster (Aging) program. IDOA is required to prepare semi-annual federal financial status reports (SF-425) for each open grant of the Aging program. During our testing of seven SF-425 reports submitted during state fiscal year 2024, we noted the following errors in the Older Americans Act Title III FFY21 grant (#2101ILOACM) SF-425 report for the semi-annual period ended September 30, 2023: "See Table in the Audit Report" We further noted the supervisory review procedures performed for this report were not designed to operate at an appropriate level of precision to ensure financial reports are accurately prepared. Additionally, IDOA does not perform analytical procedures to identify potential errors or unusual fluctuations in reported amounts. Criteria or Requirement: According to 2 CFR 200.328, Aging Cluster program grantees are required to submit SF-425 and Administration on Aging (AoA) Title III supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March 31 and September 30 and are based on the accrual basis. In addition, 2 CFR 200.303 requires non-Federal entities to, among other things, establish and maintain internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure information reported in required financial reports is accurate. Cause: In discussing these conditions with IDOA officials, they stated IDOA’s records were not updated for an error identified during the preparation and supervisory review of the report. Possible Asserted Effect: Failure to accurately prepare financial reports prevents the USDHHS from effectively monitoring the Aging program. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2024-050) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDOA review the process and procedures in place to prepare financial status reports required for the Aging program and implement the additional procedures necessary to ensure the reports are complete, accurate, and agree or reconcile to its financial records. Views of IDOA Officials: The Department agrees with this finding. The SF-425 reports are prepared by Department staff, reviewed by an outside contractor, entered into the payment management system, submitted and reviewed again before being certified. Although the adjustment has now been made and staff have been reminded to promptly enter and save adjustments or corrections in the working files at the time of the auditors’ review the spreadsheet was incorrect.
Finding 2024-011: Material Weakness and Material Noncompliance Finding, Reporting – Special Reporting Assistance Listing Program Title and Number: Coronavirus State and Local Fiscal Recovery Funds (ALN# 21.027) Federal Agency: U.S. Department of Treasury Pass-through Entity: N/A Award year: 2023-2024 Criteria or specific requirement: Generally, recipients must submit one initial Interim Report, quarterly or annual Project and Expenditure reports which include subaward reporting, and in some cases annual Recovery Plan reports. The Project and Expenditure Reports are due quarterly and/or annually based on 2 CFR 200.328 and 31 CFR section 35.4(c) Reporting and requests for other information. Cities were required to submit quarterly Project and Expenditure Reports which cover one calendar quarter and must be submitted to Treasury by the last day of the month following the end of the period covered. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Condition: None of the quarterly Project and Expenditure Reports were submitted as required, and instead the City elected to submit an annual Project and Expenditure Report that was submitted past the deadline for the fourth quarterly report. Cause: Grant management and reporting is not fully centralized within the City and there was turnover in the grant administrator position. The City did not have sufficient internal controls in place to ensure the reports were filed. Effect: Failure to file timely reports resulted in non-compliance with the Reporting requirements of the program. This could also result in the Federal government cancelling funding of the program or denying eligible expenditures. Context: There were four Project and Expenditure Reports required to be submitted during the audit period. Of the four quarterly Project and Expenditure reports required, none were submitted. The City elected to submit an annual Project and Expenditure Report, which was submitted 13 days after the deadline for the fourth quarterly report. Questioned Cost: None Repeating Finding: 2023-006 Recommendation We recommend that the City implement controls to ensure all reports are prepared, reviewed and submitted by the due date to the requisite agency, as well as contact the grantor about whether or not the delinquent reports should still be filed. Views of Responsible Officials: Management agrees with the finding.
The Department of Emergency and Military Affairs’ Emergency Management Division (Division) did not retain adequate documentation supporting reimbursement requests, matching requirements, and financial reports, risking the Division receiving monies it was not entitled to Assistance Listings number(s) and name(s): 97.042 Emergency Management Performance Grants Award number(s) and year(s): EMF-2021-EP-0016-S01 October 1, 2020 through September 30, 2023 EMF-2021-EP-0018-S01 October 1, 2020 through June 30, 2025 EMF-2022-EP-0009-S01 October 1, 2021 through September 30, 2025 EMF-2023-EP-0008-S01 October 1, 2022 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Compliance requirement(s): Cash management, matching, and reporting Questioned costs: Unknown Condition Contrary to federal regulations, the Division did not retain adequate documentation supporting reimbursement requests, matching requirements, and financial reports as follows: X Cash management For 4 of 5 requests for reimbursement we tested, the Division did not retain adequate documentation to support the amounts requested for reimbursement from the federal agency. The Division used documentation provided by its subrecipients to calculate the amount to both reimburse the subrecipient and request from the federal government. However, while the Division provided documentation of the invoices paid under their requests for reimbursement, they were unable to indicate which invoice applied to the respective request for reimbursement. X Matching The Division was unable to demonstrate through its reimbursement requests or other supporting documentation how it used nonfederal funds for at least 50% of the total project cost. X Reporting The Division did not retain documentation supporting 3 of 3 Federal Financial Reports (FFR) we tested, as follows: y For the 2023 quarter 4 FFR, the Division could only provide an unapproved draft copy and could not demonstrate that it submitted the FFR to the federal agency. y For the 2024 quarter 1 FFR and the annual FFR, the Division did not retain underlying general ledger data or other records to support costs reported, including indirect costs calculated from an approved indirect cost rate agreement. Effect The Division’s failure to retain adequate documentation supporting reimbursement requests, matching requirements, and financial reports resulted in our being unable to determine whether the reimbursements were appropriate, matching requirements were met, and the reports were complete and accurate. There is also an increased risk that Division could receive federal monies to which it is not entitled. Also, if matching requirements are not met, the Division may be required to return program monies to the federal agency in accordance with federal requirements.1 Further, the federal agency is unable to rely on the financial reports to monitor the Division’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and evaluate the program’s success. Finally, the Division is at risk that this finding applies to other federal programs it administers. Cause The Division reported that turnover of staff who previously prepared documentation to support reimbursement requests, matching requirements, and financial reports and submitted the reimbursement requests and financial reports resulted in the Division’s inability to locate the supporting documentation for the reports, including the applicable indirect cost agreement, or explain how to reconcile a large number of invoices that were provided to the reimbursement requests tested. The Division also did not have formal policies and procedures requiring an independent review to ensure the accuracy and completeness of the information included in the reports, and the retention of all documentation supporting data included in its reports. Consequently, only 2 of the 3 reports we tested were reviewed and approved prior to submitting the reports to the federal agency. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513(c)). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). Criteria Federal regulation requires the Division to retain all public records, including financial records and supporting documentation, related to a federal program for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency or pass-through grantor (2 CFR §200.334). In addition, federal regulation requires the Division to submit its quarterly reports no later than 30 days after the reporting period (2 CFR §200.328). Federal regulation also requires the Division to use the reimbursement method to administer the program, whereby the Division is reimbursed with federal program monies only after it spends its own monies for authorized program purposes and requests reimbursement from the federal grantor (2 CFR §200.305[B][3]). Also, the program’s grant agreement requires the Division to match 50% of the approved project costs from nonfederal sources. Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Division 1. Retain documentation for all reimbursement requests, matching requirements, and financial reports, such as the underlying general ledger data, approved indirect cost rate agreements, or information provided by its subrecipients for a period of 3 years from the date the program’s final report is submitted to the federal agency. 2. Review the reports identified above to ensure they were accurate. If any inaccuracies are identified, work with the federal grantor to correct these reports. 3. Develop and implement written policies and procedures over the preparation of reimbursement requests and financial reports, and the monitoring of the Division’s matching requirements as well as the retention of these records. The Division should train responsible staff on these policies and to perform an independent review of these documents to ensure accuracy and completeness prior to submission to the federal agency. 4. Allocate sufficient resources, such as staffing, to comply with the award terms and program requirements over reimbursement requests, matching requirements, and financial reports. Views of responsible officials State management concurs with this finding. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials regarding these recommendations. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
SIGNIFICANT DEFICIENCY 2024-002 - Reporting Federal Program Information: Department of Education ALN 84.425 – Elementary and Secondary School Emergency Relief ALN 21.027 – Coronavirus Local Fiscal Recovery Fund Criteria: The following CFRs apply to this finding: 2 CFR section 200.328 and 2 CFR section 200.329 Condition: During audit procedures, it was identified that the School could not provide copies of the Annual Performance Report/Annual Performance and Expenditure Report filed for the period under audit. Cause: The School did not have the necessary internal controls over reporting and did not complete and submit or did not appropriately maintain copies of the reports submitted. Effect: Reports may not have been completed and submitted within the 90 day allotted time after the end of the reporting period. Identification of Questioned Costs: None identified Context: The ESSER Performance report was due on April 12, 2024 for the period ending 6/30/23. Information was gathered and notes were made on the report form. No copy of the submitted report was maintained in the client file and client was unable to obtain a copy from the online submission program. A copy of the Coronavirus annual performance report was not maintained in the client files and client was unable to access the a copy of the report online. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the School familiarize themselves with federal Reporting Requirements and implement internal control processes and procedures to ensure that they are following the criteria above. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Limestone Community School and the Town of Limestone, Maine.
Finding Number: 2024-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2023-010 Noncompliance and Material Weakness- Final Expenditure Reporting 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. 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 Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2024, varied from the underlying system data. Expenditures on the Final Expenditure report, object code 500 were under-reported $9,080, and object code 600 were under-reported $29,346. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grant’s use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2024-008 in Section 3 above pertaining to ESSER funding contributed to the reporting error.
Department of Transportation Federal Financial Assistance Listing 20.106; Awards AIP3‐46‐0050‐54, AIP3‐46‐0050‐59, AIP3‐46‐0050‐60, and AIP3‐46‐0050‐62. COVID‐19 Airport Improvement Program Reporting Significant Deficiency in Internal Control over Compliance Criteria ‐ 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 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 ‐ The SF‐425 annual report dated September 30, 2023, for award AIP3‐46‐0050‐54 underreported the federal share of expenditures by $80,133, while the FAA Form 5100‐127 annual report dated December 31, 2022, for all awards underreported the externally restricted assets by $397,646. Cause ‐ The Authority does not have an internal control structure designed to ensure amounts reported on SF‐425 and FAA Form 5100‐127 reports are adequately reviewed and agree to underlying accounting records. Effect ‐ Lack of compliance with designed internal controls over reporting could result in the Authority reporting incorrect or incomplete information. Questioned Costs ‐ None reported. Context/Sampling ‐ A nonstatistical sample of 10 reports out of 31 reports. Repeat Finding from Prior Year – Yes, prior year finding 2022‐002 Recommendation ‐ Management should determine and formalize reporting responsibilities between the Airport and the State and establish review processes to ensure that amounts included in SF‐425 and FAA Form 5100‐127 reports agree with the underlying accounting records. Views of Responsible Officials ‐ Management agrees with the finding.
Department of Transportation Federal Financial Assistance Listing 20.106; Awards AIP3‐46‐0050‐54, AIP3‐46‐0050‐59, AIP3‐46‐0050‐60, and AIP3‐46‐0050‐62. COVID‐19 Airport Improvement Program Reporting Significant Deficiency in Internal Control over Compliance Criteria ‐ 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 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 ‐ The SF‐425 annual report dated September 30, 2023, for award AIP3‐46‐0050‐54 underreported the federal share of expenditures by $80,133, while the FAA Form 5100‐127 annual report dated December 31, 2022, for all awards underreported the externally restricted assets by $397,646. Cause ‐ The Authority does not have an internal control structure designed to ensure amounts reported on SF‐425 and FAA Form 5100‐127 reports are adequately reviewed and agree to underlying accounting records. Effect ‐ Lack of compliance with designed internal controls over reporting could result in the Authority reporting incorrect or incomplete information. Questioned Costs ‐ None reported. Context/Sampling ‐ A nonstatistical sample of 10 reports out of 31 reports. Repeat Finding from Prior Year – Yes, prior year finding 2022‐002 Recommendation ‐ Management should determine and formalize reporting responsibilities between the Airport and the State and establish review processes to ensure that amounts included in SF‐425 and FAA Form 5100‐127 reports agree with the underlying accounting records. Views of Responsible Officials ‐ Management agrees with the finding.
Department of Transportation Federal Financial Assistance Listing 20.106; Awards AIP3‐46‐0050‐54, AIP3‐46‐0050‐59, AIP3‐46‐0050‐60, and AIP3‐46‐0050‐62. COVID‐19 Airport Improvement Program Reporting Significant Deficiency in Internal Control over Compliance Criteria ‐ 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 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 ‐ The SF‐425 annual report dated September 30, 2023, for award AIP3‐46‐0050‐54 underreported the federal share of expenditures by $80,133, while the FAA Form 5100‐127 annual report dated December 31, 2022, for all awards underreported the externally restricted assets by $397,646. Cause ‐ The Authority does not have an internal control structure designed to ensure amounts reported on SF‐425 and FAA Form 5100‐127 reports are adequately reviewed and agree to underlying accounting records. Effect ‐ Lack of compliance with designed internal controls over reporting could result in the Authority reporting incorrect or incomplete information. Questioned Costs ‐ None reported. Context/Sampling ‐ A nonstatistical sample of 10 reports out of 31 reports. Repeat Finding from Prior Year – Yes, prior year finding 2022‐002 Recommendation ‐ Management should determine and formalize reporting responsibilities between the Airport and the State and establish review processes to ensure that amounts included in SF‐425 and FAA Form 5100‐127 reports agree with the underlying accounting records. Views of Responsible Officials ‐ Management agrees with the finding.
Department of Transportation Federal Financial Assistance Listing 20.106; Awards AIP3‐46‐0050‐54, AIP3‐46‐0050‐59, AIP3‐46‐0050‐60, and AIP3‐46‐0050‐62. COVID‐19 Airport Improvement Program Reporting Significant Deficiency in Internal Control over Compliance Criteria ‐ 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 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 ‐ The SF‐425 annual report dated September 30, 2023, for award AIP3‐46‐0050‐54 underreported the federal share of expenditures by $80,133, while the FAA Form 5100‐127 annual report dated December 31, 2022, for all awards underreported the externally restricted assets by $397,646. Cause ‐ The Authority does not have an internal control structure designed to ensure amounts reported on SF‐425 and FAA Form 5100‐127 reports are adequately reviewed and agree to underlying accounting records. Effect ‐ Lack of compliance with designed internal controls over reporting could result in the Authority reporting incorrect or incomplete information. Questioned Costs ‐ None reported. Context/Sampling ‐ A nonstatistical sample of 10 reports out of 31 reports. Repeat Finding from Prior Year – Yes, prior year finding 2022‐002 Recommendation ‐ Management should determine and formalize reporting responsibilities between the Airport and the State and establish review processes to ensure that amounts included in SF‐425 and FAA Form 5100‐127 reports agree with the underlying accounting records. Views of Responsible Officials ‐ Management agrees with the finding.
Section III – Federal Award Findings and Questioned Costs Finding #2023-001: Program Title: Early Head Start Childcare Partnership Assistance Listing: 93.600 Contract Grant Number:06-HP000201-03 Federal Award Years: July 1, 2022 to June 30, 2023 Federal Agency: U.S. Department of Health and Human Services Allowable Costs and Reporting Type of Finding: Questioned Cost and Other Noncompliance Criteria: The 2 CFR part 200 establishes costs principles for determining costs applicable to Federal Award and requires costs be adequately documented. In addition, 2 CFR section 200.328 establishes financial information be reported in accordance with terms and conditions of the federal award. This award is subject to the requirements set forth in 45 CFR Part 75, which defines unliquidated obligations as obligations incurred for direct and indirect expenses incurred but not yet paid or charged to the award and does not include a future commitment of funds for which an obligation or expense has not been incurred. Condition: Based on procedures performed, we identified expenditures recorded for future program expenses totaling $160,597 not yet obligated or incurred. As a result, amounts unspent were improperly reported as unliquidated obligations on the federal financial report for the budget period ended June 30, 2023. Questioned Costs: Based on review of accounting records and reconciliation of unused federal funds prepared by Family Service, we identified questioned costs totaling $160,597 for the Early Head Start program. Cause: Lack of documentation to support costs were obligated or incurred for direct or indirect program expense for Early Head Start prior to the end of the budget period. In addition, Family Service did not request an extension for additional time to use unspent funds on future program expenses. Effect: Noncompliance with Allowable Costs and Reporting compliance requirements of the Uniform Guidance and terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend Family Service improve procedures for tracking, reporting, and use of obligated and/or unspent funds to ensure compliance with the compliance requirements and terms and conditions of the federal award. Views of responsible officials: Management agrees with the recommendations to improve tracking and reporting of obligated and/or use of unspent funds to conform with the compliance requirements and terms and conditions of the federal award. Unfortunately, the advanced funds drawn for building remodeling and maintenance were unspent because of serious delays due to systemic problems with obtaining certificates of occupancy and permits in a timely manner.
Finding Number: 2023-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2020, 2021, 2022, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved 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. (2 CFR 200.328). Until the grant is completed and closed, recipients are responsible for submitting formal reports as follows: A signed/dated SF-270 (non-construction projects) or SF-271 or equivalent (construction projects) and SF- 425 annually, due 90 days after the end of each federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition: The Airport did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Standard Forms 425 and Standard Forms 271 for the reporting period ended September 30, 2023 were filed on January 19, 2024. Cause and Effect: The Airport did not prepare or submit the required forms by December 31, 2023. The SF-425 and SF-271 reports for the period ending September 30, 2023 were submitted 19 days after the due date. Recommendation: The Airport should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Finding Number: 2023-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2020, 2021, 2022, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved 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. (2 CFR 200.328). Until the grant is completed and closed, recipients are responsible for submitting formal reports as follows: A signed/dated SF-270 (non-construction projects) or SF-271 or equivalent (construction projects) and SF- 425 annually, due 90 days after the end of each federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition: The Airport did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Standard Forms 425 and Standard Forms 271 for the reporting period ended September 30, 2023 were filed on January 19, 2024. Cause and Effect: The Airport did not prepare or submit the required forms by December 31, 2023. The SF-425 and SF-271 reports for the period ending September 30, 2023 were submitted 19 days after the due date. Recommendation: The Airport should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Finding Number: 2023-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2020, 2021, 2022, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved 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. (2 CFR 200.328). Until the grant is completed and closed, recipients are responsible for submitting formal reports as follows: A signed/dated SF-270 (non-construction projects) or SF-271 or equivalent (construction projects) and SF- 425 annually, due 90 days after the end of each federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition: The Airport did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Standard Forms 425 and Standard Forms 271 for the reporting period ended September 30, 2023 were filed on January 19, 2024. Cause and Effect: The Airport did not prepare or submit the required forms by December 31, 2023. The SF-425 and SF-271 reports for the period ending September 30, 2023 were submitted 19 days after the due date. Recommendation: The Airport should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Finding Number: 2023-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2020, 2021, 2022, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved 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. (2 CFR 200.328). Until the grant is completed and closed, recipients are responsible for submitting formal reports as follows: A signed/dated SF-270 (non-construction projects) or SF-271 or equivalent (construction projects) and SF- 425 annually, due 90 days after the end of each federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition: The Airport did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Standard Forms 425 and Standard Forms 271 for the reporting period ended September 30, 2023 were filed on January 19, 2024. Cause and Effect: The Airport did not prepare or submit the required forms by December 31, 2023. The SF-425 and SF-271 reports for the period ending September 30, 2023 were submitted 19 days after the due date. Recommendation: The Airport should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Finding Number: 2023-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2020, 2021, 2022, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved 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. (2 CFR 200.328). Until the grant is completed and closed, recipients are responsible for submitting formal reports as follows: A signed/dated SF-270 (non-construction projects) or SF-271 or equivalent (construction projects) and SF- 425 annually, due 90 days after the end of each federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition: The Airport did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Standard Forms 425 and Standard Forms 271 for the reporting period ended September 30, 2023 were filed on January 19, 2024. Cause and Effect: The Airport did not prepare or submit the required forms by December 31, 2023. The SF-425 and SF-271 reports for the period ending September 30, 2023 were submitted 19 days after the due date. Recommendation: The Airport should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Finding Number: 2023-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2020, 2021, 2022, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved 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. (2 CFR 200.328). Until the grant is completed and closed, recipients are responsible for submitting formal reports as follows: A signed/dated SF-270 (non-construction projects) or SF-271 or equivalent (construction projects) and SF- 425 annually, due 90 days after the end of each federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition: The Airport did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Standard Forms 425 and Standard Forms 271 for the reporting period ended September 30, 2023 were filed on January 19, 2024. Cause and Effect: The Airport did not prepare or submit the required forms by December 31, 2023. The SF-425 and SF-271 reports for the period ending September 30, 2023 were submitted 19 days after the due date. Recommendation: The Airport should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Finding Number: 2023-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2020, 2021, 2022, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved 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. (2 CFR 200.328). Until the grant is completed and closed, recipients are responsible for submitting formal reports as follows: A signed/dated SF-270 (non-construction projects) or SF-271 or equivalent (construction projects) and SF- 425 annually, due 90 days after the end of each federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition: The Airport did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Standard Forms 425 and Standard Forms 271 for the reporting period ended September 30, 2023 were filed on January 19, 2024. Cause and Effect: The Airport did not prepare or submit the required forms by December 31, 2023. The SF-425 and SF-271 reports for the period ending September 30, 2023 were submitted 19 days after the due date. Recommendation: The Airport should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Finding Number: 2023-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2020, 2021, 2022, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved 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. (2 CFR 200.328). Until the grant is completed and closed, recipients are responsible for submitting formal reports as follows: A signed/dated SF-270 (non-construction projects) or SF-271 or equivalent (construction projects) and SF- 425 annually, due 90 days after the end of each federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition: The Airport did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Standard Forms 425 and Standard Forms 271 for the reporting period ended September 30, 2023 were filed on January 19, 2024. Cause and Effect: The Airport did not prepare or submit the required forms by December 31, 2023. The SF-425 and SF-271 reports for the period ending September 30, 2023 were submitted 19 days after the due date. Recommendation: The Airport should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Reporting Fiscal year ending :2023 Federal Program: Head Start 93.600 Questioned Costs: None Condition: During our audit, we noted that the Head Start program did not submit the required semi-annual form 425 and form 429 reports within the specified deadlines. The reports for the were submitted 10 and 15 days late, respectively. Criteria: According to 2 CFR Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), specifically 2 CFR § 200.328, recipients of federal awards must submit performance and financial reports to the federal awarding agency in a timely manner. The specific reporting deadlines are outlined in the award terms and conditions. Cause:The delay in submitting the reports was due to insufficient internal controls over the reporting process. Specifically, there was a lack of adequate staff training on the reporting requirements and no established procedures to ensure timely submission. Effect: Non-compliance with reporting requirements can result in delayed funding, reduced confidence from the federal awarding agency, and potential negative impacts on program operations. Continued noncompliance may also lead to more severe consequences such as the suspension of funding. Recommendation: We recommend that the Head Start program management take the requirements: Implement a formalized reporting schedule with clearly defined deadlines, establish a review process to verify the accuracy and timeliness of reports before submission and assign specific staff members to oversee compliance with reporting requirements. View of Responsible Officals: We will take the necessary steps to get clear deadlines from the awarding agency on the reporting dates for Head Start and update our formal reporting schedule with those dates. The Head Start Fund Accountant will work with the Administrative Assistant/Facilities Manager in gathering the necessary information earlier in the year for the yearly property reporting (SF-429). The Head Start Fund Accountant will email copies of these reports to the Director of Head Start to ensure compliance.
Reporting Fiscal year ending :2023 Federal Program: Head Start 93.600 Questioned Costs: None Condition: During our audit, we noted that the Head Start program did not submit the required semi-annual form 425 and form 429 reports within the specified deadlines. The reports for the were submitted 10 and 15 days late, respectively. Criteria: According to 2 CFR Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), specifically 2 CFR § 200.328, recipients of federal awards must submit performance and financial reports to the federal awarding agency in a timely manner. The specific reporting deadlines are outlined in the award terms and conditions. Cause:The delay in submitting the reports was due to insufficient internal controls over the reporting process. Specifically, there was a lack of adequate staff training on the reporting requirements and no established procedures to ensure timely submission. Effect: Non-compliance with reporting requirements can result in delayed funding, reduced confidence from the federal awarding agency, and potential negative impacts on program operations. Continued noncompliance may also lead to more severe consequences such as the suspension of funding. Recommendation: We recommend that the Head Start program management take the requirements: Implement a formalized reporting schedule with clearly defined deadlines, establish a review process to verify the accuracy and timeliness of reports before submission and assign specific staff members to oversee compliance with reporting requirements. View of Responsible Officals: We will take the necessary steps to get clear deadlines from the awarding agency on the reporting dates for Head Start and update our formal reporting schedule with those dates. The Head Start Fund Accountant will work with the Administrative Assistant/Facilities Manager in gathering the necessary information earlier in the year for the yearly property reporting (SF-429). The Head Start Fund Accountant will email copies of these reports to the Director of Head Start to ensure compliance.
Information on the Federal Program: Assistance Listing Number 21.027 – Coronavirus State and Local Fiscal Recovery Funds. Compliance Requirement: Reporting. Type of Finding: Significant deficiency in internal control over major federal programs. Criteria: The Uniform Guidance at 2 CFR 200.328 requires certain recipients of Coronavirus State and Local Fiscal Recovery Funds to submit quarterly and annual project and expenditure reports to the U.S. Department of the Treasury including, but not limited to, total obligations of funds, total expenditures of funds, and total number of projects. Condition: We noted that multiple quarterly reports did not accurately report total expenditures as of the date of the reporting period. Cause: Tracking spreadsheets were not appropriately updated to capture all expenditures of federal funds. Effect or Potential Effect: The County has a significant deficiency in internal control with respect to reporting of federal expenditures. Recommendation: Controls should require a secondary review and reconciliation of quarterly and annual reports to the County’s general ledger prior to submission by the grant director.
Section III – Federal Award Findings and Questioned Costs 2023-001: Compliance with Reporting Requirements (Repeat Finding) Federal Agency: Department of Health and Human Services (“HHS”), Health Resources and Services Administration (“HRSA”) Assistance Listing Program Title: Congressional Directives Federal Award Project Title: Community Project Funding/ Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number: CE146567 Criteria In accordance with 2 CFR 200.328 and the notice of award (“NoA”), there are financial and other reporting requirements that the entity must complete and submit to HHS. The NoA has the following financial and other reporting requirements that were subject to testing: 1. Within 90 days of project completion, a final report is required to be submitted. The project was completed on July 28, 2023 and the final report was required to be submitted by October 26, 2023; 2. A semi-annual progress report is required to be submitted every May and December until the project is completed. The first semi-annual progress report was due December 14, 2023 and; 3. The recipient must submit an annual Federal Financial Report (“FFR”), due October 30, 2023 for the annual period August 1, 2022 to July 31, 2023. Condition The conditions of the noncompliance identified are as follows: 4. The final report, due by October 26, 2023, was not submitted to HHS until August 13, 2024. 2. As the final report was not yet completed, the December semi-annual report was required to be submitted. The semi-annual report was submitted December 21, 2023, which was past the stated deadline of December 14, 2023. 3. The FFR submitted on October 24, 2023 for the period ended July 31, 2023 included $0 of federal expenditures when $749,892 of federal expenditures were incurred through the period ended July 31, 2023 based on our review of the underlying expenditure detail. Questioned Costs None Cause Management did not have an adequate understanding of the reporting requirements of the award and the control was not designed to ensure that reports were completed and submitted to the agency in a timely manner. Effect The late submission of the final report and the December 2023 semi-annual report and the submission of inaccurate financial data in the annual FFR causes Flushing to be out of compliance with specific grant reporting requirements. Recommendation We recommend Flushing enhance its control around the monitoring of grant reporting requirements, including evaluating report due dates, confirming reporting requirements with the granting agency as appropriate, and performing reviews prior to submission to ensure all reports are being completed accurately and submitted in a timely manner. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan is included at the end of this report.
Finding Number 2023-002 Assistance Listing #21.027 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Reporting Immaterial Noncompliance Criteria: In accordance with 2 CFR 200.328 and 31 CFR section 35.4(c) Reporting and requests for other information, grantees are required to file quarterly Project and Expenditure Reports listing significant projects, significant payments to subrecipients, subawards, and expenditure awards greater than $50,000. Condition: The Tribe incorrectly listed some project vendors as a subrecipients on the Project and Expenditure reports. Cause: Treasury guidance for reporting subrecipients versus contractors was in transition during the reporting periods for the year. Effect: The Tribe reported subrecipients on the Project and Expenditures Reports, but did not have any subrecipients of Coronavirus State and Local Fiscal Recovery Funds (SLFRF). Recommendation: Update reporting to ensure payments are reported as project vendors rather than subrecipients. Management's Response: Management recognizes that the error exists and has not been able to correct the report due to US Treasury’s portal not accepting prior period revisions. Treasury has changed its guidance on SLFRF multiple times over the past several years which has created an increased risk in filing errors for all reporting for these funds..
Finding Number: 2023-003 Federal Program: CDBG – Entitlement Grants Cluster Federal Award Identification Number and Year: B-22-MC-39-0001, 2022; B-20-MW-39-0001, 2020 Assistance Listing Number (ALN): 14.218 Federal Awarding Agency: Department of Housing and Urban Development Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: 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. (2 CFR 200.328). The Quarterly Cash on Hand report must be submitted to the respective field office within 30 days after the end of the reporting period. Condition: The City did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: The City submitted its Quarter 3 financial reports due July 30, 2023 on August 4, 2023. Cause and Effect: The City did not submit the required financial reports within the required timeframe. Recommendation: The City should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Finding Number: 2023-003 Federal Program: CDBG – Entitlement Grants Cluster Federal Award Identification Number and Year: B-22-MC-39-0001, 2022; B-20-MW-39-0001, 2020 Assistance Listing Number (ALN): 14.218 Federal Awarding Agency: Department of Housing and Urban Development Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Reporting Criteria: 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. (2 CFR 200.328). The Quarterly Cash on Hand report must be submitted to the respective field office within 30 days after the end of the reporting period. Condition: The City did not file the required reports within the timeframes above. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: The City submitted its Quarter 3 financial reports due July 30, 2023 on August 4, 2023. Cause and Effect: The City did not submit the required financial reports within the required timeframe. Recommendation: The City should implement controls and processes to ensure that the required reports are submitted timely. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.