FINDING 2024-004 Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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 Financial reporting . . . ." 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." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Management misinterpreted the instructions for the reporting requirements and believed that they did not need to fill in the expense information as an LEA. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit one Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II amount reported for the reports covering the FY23 time period ($4,934,473) did not agree to the underlying expenditure records ($4,801,053) for the period of July 1, 2022 through June 30, 2023. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2023-006. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2024-032 - Inadequate Controls over and Noncompliance with Federal Financial Reporting State Entity: Louisiana Department of Health - Office of Public Health (OPH) Award Year: 2024 Award Number: NU90TP922016 Compliance Requirement: Reporting Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: The Louisiana Department of Health - Office of Public Health (OPH) did not have adequate controls in place to ensure that federal financial reports were accurate, current, and complete prior to being submitted to the federal agency for the Public Health Emergency Preparedness federal program for the June 30, 2024 reporting period. OPH's annual report for the reporting period June 30, 2024 improperly included expenditures totaling $146,598 from the period July 2024 through September 2024. Criteria: 2 CFR 200.302(b)(2) states accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements set forth in 2 CFR 200.328 and 200.329 is required. In addition, the U.S. Centers for Disease Control and Prevention guidance indicates that the report must include only those funds authorized and expended during the timeframe of the report. 2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: OPH did not have adequate controls in place to ensure the federal financial report only included expenditures for the period being reported prior to submission to the federal agency. Effect: Failure to establish adequate controls over financial reporting could result in inaccurate information being reported to the federal agency. Recommendation: OPH should design and implement controls to ensure all information contained in the financial reports submitted to federal agencies is accurate, current, and complete for the reporting period covered under the report. Management’s Response and Corrective Action Plan: Management did not concur with the finding stating that the amount in question is immaterial and does not misstate the federal financial report. To address the control weakness, management provided a corrective action plan (B-36).
2024-024 - Inadequate Controls over Reporting and Matching Federal Compliance Requirements for the Medicaid and Children's Health Insurance Programs State Entity: Louisiana Department of Health (LDH) Award Years: 2023, 2024 Award Numbers: 2305LA5021, 2305LA5MAP, 2405LA5021, 2405LA5MAP Compliance Requirement: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: Yes (Prior Year Finding No. 2023-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the second consecutive year, LDH did not have adequate controls in place to ensure compliance with reporting and matching requirements for the Medical Assistance Program (Medicaid) and the Children’s Health Insurance Program (CHIP) for all four quarters of fiscal year 2024. The following errors were noted throughout the Centers for Medicare and Medicaid Services (CMS) quarterly federal expenditure reports prepared by LDH: • For each quarter of fiscal year 2024, quarterly adjustment expenditures were either incorrectly recorded on the CMS quarterly federal expenditure reports and/or within the financial statements. • For both the March 31, 2024 and June 30, 2024 reports LDH incorrectly completed the Medicaid Drug Rebate Schedule 64.9R. For the March 31, 2024 report, an invoice amount of $0 was reported as the rebates invoiced in this quarter rather than the correct amount of $243,910,667. For the June 30, 2024 report, LDH incorrectly adjusted the schedule 64.9R resulting in numerous errors and a net understatement of $220,130,454 in an effort to correct the error from the March 31, 2024 report. • LDH incorrectly overstated federal fiscal year 2023 Disproportionate State Hospital (DSH) payments by $820,395 on schedule 64.9D for the September 30, 2023 report. Criteria: According to 2 CFR 200.302(b)(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 is required. The Medicaid and CHIP programs require quarterly reporting to CMS detailing expenditures by category of service for which states are entitled to federal reimbursement. The federal expenditures reported in the quarterly reports are used to reconcile the draws of federal funds. In addition, a good system of internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements. Cause: LDH did not have adequate controls in place to ensure the reconciliation of the expenditures recorded in LDH’s financial statements to the expenditures reported to CMS. In addition, the quarterly adjustments were not properly reviewed to ensure that adjustments affecting the financial statements were properly recorded. Effect: As a result, LDH failed to detect multiple errors between the financial statements and CMS quarterly federal expenditure reports, as well as errors on various schedules in the quarterly reports. Uncorrected errors in the reports increase the risk that federal funds will be overdrawn or underdrawn and place LDH in noncompliance with federal regulations. Recommendation: LDH management should strengthen controls over preparation and review of the quarterly federal expenditure reports and quarterly adjustments to ensure federal expenditures are accurately reported. In addition, LDH management should incorporate a reconciliation of federal expenditures in the financial statements to federal expenditures reported to CMS. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-17).
2024-024 - Inadequate Controls over Reporting and Matching Federal Compliance Requirements for the Medicaid and Children's Health Insurance Programs State Entity: Louisiana Department of Health (LDH) Award Years: 2023, 2024 Award Numbers: 2305LA5021, 2305LA5MAP, 2405LA5021, 2405LA5MAP Compliance Requirement: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: Yes (Prior Year Finding No. 2023-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the second consecutive year, LDH did not have adequate controls in place to ensure compliance with reporting and matching requirements for the Medical Assistance Program (Medicaid) and the Children’s Health Insurance Program (CHIP) for all four quarters of fiscal year 2024. The following errors were noted throughout the Centers for Medicare and Medicaid Services (CMS) quarterly federal expenditure reports prepared by LDH: • For each quarter of fiscal year 2024, quarterly adjustment expenditures were either incorrectly recorded on the CMS quarterly federal expenditure reports and/or within the financial statements. • For both the March 31, 2024 and June 30, 2024 reports LDH incorrectly completed the Medicaid Drug Rebate Schedule 64.9R. For the March 31, 2024 report, an invoice amount of $0 was reported as the rebates invoiced in this quarter rather than the correct amount of $243,910,667. For the June 30, 2024 report, LDH incorrectly adjusted the schedule 64.9R resulting in numerous errors and a net understatement of $220,130,454 in an effort to correct the error from the March 31, 2024 report. • LDH incorrectly overstated federal fiscal year 2023 Disproportionate State Hospital (DSH) payments by $820,395 on schedule 64.9D for the September 30, 2023 report. Criteria: According to 2 CFR 200.302(b)(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 is required. The Medicaid and CHIP programs require quarterly reporting to CMS detailing expenditures by category of service for which states are entitled to federal reimbursement. The federal expenditures reported in the quarterly reports are used to reconcile the draws of federal funds. In addition, a good system of internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements. Cause: LDH did not have adequate controls in place to ensure the reconciliation of the expenditures recorded in LDH’s financial statements to the expenditures reported to CMS. In addition, the quarterly adjustments were not properly reviewed to ensure that adjustments affecting the financial statements were properly recorded. Effect: As a result, LDH failed to detect multiple errors between the financial statements and CMS quarterly federal expenditure reports, as well as errors on various schedules in the quarterly reports. Uncorrected errors in the reports increase the risk that federal funds will be overdrawn or underdrawn and place LDH in noncompliance with federal regulations. Recommendation: LDH management should strengthen controls over preparation and review of the quarterly federal expenditure reports and quarterly adjustments to ensure federal expenditures are accurately reported. In addition, LDH management should incorporate a reconciliation of federal expenditures in the financial statements to federal expenditures reported to CMS. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-17).
2024-024 - Inadequate Controls over Reporting and Matching Federal Compliance Requirements for the Medicaid and Children's Health Insurance Programs State Entity: Louisiana Department of Health (LDH) Award Years: 2023, 2024 Award Numbers: 2305LA5021, 2305LA5MAP, 2405LA5021, 2405LA5MAP Compliance Requirement: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: Yes (Prior Year Finding No. 2023-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the second consecutive year, LDH did not have adequate controls in place to ensure compliance with reporting and matching requirements for the Medical Assistance Program (Medicaid) and the Children’s Health Insurance Program (CHIP) for all four quarters of fiscal year 2024. The following errors were noted throughout the Centers for Medicare and Medicaid Services (CMS) quarterly federal expenditure reports prepared by LDH: • For each quarter of fiscal year 2024, quarterly adjustment expenditures were either incorrectly recorded on the CMS quarterly federal expenditure reports and/or within the financial statements. • For both the March 31, 2024 and June 30, 2024 reports LDH incorrectly completed the Medicaid Drug Rebate Schedule 64.9R. For the March 31, 2024 report, an invoice amount of $0 was reported as the rebates invoiced in this quarter rather than the correct amount of $243,910,667. For the June 30, 2024 report, LDH incorrectly adjusted the schedule 64.9R resulting in numerous errors and a net understatement of $220,130,454 in an effort to correct the error from the March 31, 2024 report. • LDH incorrectly overstated federal fiscal year 2023 Disproportionate State Hospital (DSH) payments by $820,395 on schedule 64.9D for the September 30, 2023 report. Criteria: According to 2 CFR 200.302(b)(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 is required. The Medicaid and CHIP programs require quarterly reporting to CMS detailing expenditures by category of service for which states are entitled to federal reimbursement. The federal expenditures reported in the quarterly reports are used to reconcile the draws of federal funds. In addition, a good system of internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements. Cause: LDH did not have adequate controls in place to ensure the reconciliation of the expenditures recorded in LDH’s financial statements to the expenditures reported to CMS. In addition, the quarterly adjustments were not properly reviewed to ensure that adjustments affecting the financial statements were properly recorded. Effect: As a result, LDH failed to detect multiple errors between the financial statements and CMS quarterly federal expenditure reports, as well as errors on various schedules in the quarterly reports. Uncorrected errors in the reports increase the risk that federal funds will be overdrawn or underdrawn and place LDH in noncompliance with federal regulations. Recommendation: LDH management should strengthen controls over preparation and review of the quarterly federal expenditure reports and quarterly adjustments to ensure federal expenditures are accurately reported. In addition, LDH management should incorporate a reconciliation of federal expenditures in the financial statements to federal expenditures reported to CMS. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-17).
Agency: Employment and Training Administration Office of Grants Management ALN: 17.289 Federal Award Identification Number: 23A60C9000032-01-00 Criteria: Under the Committee of Sponsoring Organization framework, control activities are established through policies and procedures that help ensure that management’s directives to mitigate risks to the achievement of objectives are carried out. Segregation of duties is typically built into the selection and development of control activities. According to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 200.327 and 200.328, recipients of federal awards are required to submit performance and financial reports by the due dates specified in the terms and conditions of the federal awards. Context and Condition: There was an overall lack of segregation of duties surrounding the preparation and submission of grant reimbursement requests as the VP of Finance performed this function himself with no review and approval. Cause: The Entity failed to establish a set of internal control procedures to ensure segregation of duties and an appropriate review and approval process. Effect: There was a lack of adequate review and oversight over grant reporting. Repeat Finding: No Recommendation: We recommend that the Entity establish internal control procedures that incorporate segregation of duties and add a level of review and approval for grant reporting. Views of Responsible Officials and Planned Corrective Action: See attached corrective action plan. Questioned Costs: None
2024–002: Reporting – Significant Deficiency Federal Agency: U.S. Department of Education Federal Program Name: Fund for the Improvement of Postsecondary Education Assistance Listing Number: 84.116Z Federal Award Identification Number and Year: N/A; 2023-2024 Award Period: July 1, 2023 – June 30, 2024 Pass-Through Agency: N/A Pass-Through Numbers: N/A Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: All recipients of a multi-year discretionary award must submit an annual Grant Performance Report (34 CFR § 75.118). The annual performance report shall provide the most current performance and financial expenditure information that is sufficient to meet the reporting requirements of 2 CFR § 200.328, 200.329, and 34 CFR § 75.720. Condition/Context: During testing it was noted that the College did not submit the required annual report. Questioned costs: None Cause: The College does not have a control in place to ensure reporting requirements are met. Effect: Non-compliance with reporting requirements. Repeat Finding: No Recommendation: We recommend the College should establish a policy that provides the guidance required to comply and address regulatory reporting requirements. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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, 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with 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.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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, 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with 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.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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, 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with 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.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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, 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with 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.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Late Reporting and Noncompliance with Reporting Requirements Federal Agency: U.S. Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award Numbers: 22-LGLR-26/SLRFP4346 Award Year: 2022 Type of Finding: Significant deficiency in internal control over compliance and noncompliance Criteria: In accordance with 2 CFR part 200, subpart D, section 200.328 / 31 CFR section 35.4(c), the recipients are to report annually and quarterly on a timely basis to the U.S. Department of Treasury. Condition and context: The annual report was submitted late, after the deadline. The quarterly report submission dates could not be substantiated. Cause: Due to high amounts of turnover, the Borough was not able to complete the reports within the time requirement. Effect: Late submission of grant progress reports may result in delaying the issuance of funds, or continuation of the award. Questioned Costs: None noted. Repeat finding: This is not a repeat finding and due to the turnover it is considered an isolated instance. Recommendation: We recommend that the client implements a stronger set of internal controls that would ensure proper and timely reporting. Management’s Response: Management concurs with the finding. See Corrective Action Plan.
Late Reporting and Noncompliance with Reporting Requirements Federal Agency: U.S. Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award Numbers: 22-LGLR-26/SLRFP4346 Award Year: 2022 Type of Finding: Significant deficiency in internal control over compliance and noncompliance Criteria: In accordance with 2 CFR part 200, subpart D, section 200.328 / 31 CFR section 35.4(c), the recipients are to report annually and quarterly on a timely basis to the U.S. Department of Treasury. Condition and context: The annual report was submitted late, after the deadline. The quarterly report submission dates could not be substantiated. Cause: Due to high amounts of turnover, the Borough was not able to complete the reports within the time requirement. Effect: Late submission of grant progress reports may result in delaying the issuance of funds, or continuation of the award. Questioned Costs: None noted. Repeat finding: This is not a repeat finding and due to the turnover it is considered an isolated instance. Recommendation: We recommend that the client implements a stronger set of internal controls that would ensure proper and timely reporting. Management’s Response: Management concurs with the finding. See Corrective Action Plan.
Condition: During our audit procedures, we noted that the following financial reports were not submitted on time and/or with incorrect balances of cumulative expenses. Criteria: As stated in the award terms 2.CFR 200.328, financial reports are due on a quarterly basis. Cause: Staff members responsible for compiling and submitting financial reports may lack a comprehensive understanding of the specific reporting requirements stipulated by the Federal awarding agency. Without clear guidance or training on reporting deadlines, formatting, and content expectations, they may confront problems meeting compliance obligations in a timely and accurate manner. Effect: Late submissions of required financial reports can result in heightened scrutiny from Federal awarding agencies. The Corporation could face delays in receiving future funding until compliance issues are resolved, impacting its financial stability and mission delivery. Recommendation: Centro Margarita, Inc. should establish clear protocols and timelines for the preparation and submission of financial reports to ensure compliance with Federal awarding agency requirements. This include defining roles and responsibilities within the finance and accounting team and setting deadlines well in advance of the reporting due dates.
Internal Control over Compliance - Timing of Expenditures Reported in the Schedule of Expenditure of Federal Awards (SEFA) Requires Alignment with Federal Guidelines Federal Program Information: Federal Assistance Listing Number: 16.753 Federal Program Name: Byrne Discretionary Community Project Funding /Byrne Discretionary Grants Program Federal Agency: U.S. Department of Justice Pass-through Agency: State of California Bureau of Justice Assistance Federal Award Number: 15PBJA-22-GG-00264-BRND Federal Award Year: March 15, 2022 to September 30, 2023 Criteria: Per 2 CFR 200.510(b), Financial Statements: Schedule of Expenditures of Federal Awards (SEFA), the SEFA must include the total federal awards expended, as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended, and must align with the same reporting period as the auditee's financial statements. 2 CFR 200.502(a) specifies that the timing of when a federal award is expended is based on the occurrence of the activity related to the award. Additionally, 2 CFR 200.328, Financial Reporting, emphasizes the importance of submitting performance and financial reports that are complete, accurate, and consistent with the accounting records. Specifically: • Financial data must be derived from and consistent with the recipient's accounting records. • Reports must include all financial information in accordance with federal requirements. Condition: During our audit, we identified a discrepancy involving the federal expenditures for the Byrne Discretionary Community Project Funding/Byrne Discretionary Grants Program, totaling $1,000,000. These expenditures were incurred in FY 2023 but were reported in the SEFA for FY 2024. Additionally, we noted that the reports submitted to the federal agency lacked evident review controls to verify their completeness, accuracy, and consistency with accounting records. Cause and Effect: The City inadvertently excluded the federal expenditure for this grant from the FY2023 SEFA due to an unintentional oversight. This error was later identified and addressed by including the expenditure in the FY2024 SEFA. The oversight occurred because the equipment expenditure tied to this grant was recorded with an effective date of June 2023, while the corresponding grant funds were received and recorded in November 2023. This misalignment in timing created confusion regarding the proper fiscal year in which the expenditure should be reported. Additionally, this was a one-time funding and expenditure, and the City lacked prior experience in both receiving and reporting such grants. The absence of established procedures or review controls specific to this type of funding further contributed to the oversight. Collectively, these factors led to the omission of the expenditure from the FY 2023 SEFA, highlighting the need for improved processes to prevent similar issues in the future. Recommendation: We recommend that the City implement enhanced procedures for reviewing and reconciling grant-related expenditures and receipts to ensure accurate and timely reporting in the SEFA. Specifically, the City should: • Establish a process to track one-time or unique grants separately to ensure their proper inclusion in the correct fiscal year. • Conduct cross-departmental reviews to align the timing of expenditure recording with grant fund receipts. • Provide training to staff on federal reporting requirements, including the accurate preparation of the SEFA in compliance with 2 CFR 200.510(b) and 2 CFR 200.502(a). • Periodically audit SEFA preparation processes to identify and address any potential discrepancies promptly. • Implement thorough pre-submission reviews to ensure reports are accurate, complete, and consistent with accounting records, using checklists or tools if necessary. Views of Responsible Officials and Planned Corrective Action: The City internally identify improvement opportunities in managing grants. As a part of the City’s grant oversight improvement efforts, the City began implementing various processes and internal controls surrounding grant monitoring, which improves the SEFA drafting process and mitigates risks of future inaccuracies. These efforts began in early 2024 and include the following: • Creation of a grant policy that provides City staff with guidance, information, and expectations surrounding grants. • Creation of a master grants database that lists the general ledger fund, applicable project ledger references, status, grant type, start/end dates, granting agency, pass-through agency, grant name, assistance listing numbers, grant amounts, and the grant manager for each grant. This database is now used to verify the completeness and accuracy of the SEFA (beginning FY24). • Formal quarterly monitoring. Each quarter, the City will formally review the grants database with department contacts and grant managers to verify the completeness and accuracy of the database. The City is formalizing this process and plans to include department signoffs evidencing the review process. If any items are missing, the missing component will be identified and added to the database on a timely basis. The City will also utilize this quarterly process to review the grants policy to ensure grant managers are aware of the requirements related to their grants. • The City is in the process of formalizing the SEFA drafting process utilized during the FY24 SEFA preparation, which includes additional mitigating procedures such as reviewing all next FY federal receipts to ensure none of them relate to the SEFA year federal expenditures. Personnel Responsible for Implementation: Marvin Lopez Position of Responsible Personnel: Deputy Administrative Services Director (Fiscal Services) Expected Date of Implementation: June 30, 2025
2024-034 Oregon Housing and Community Services Quarterly Performance Report should include all expenditures incurred to date Federal Awarding Agency: U.S. Department of Housing and Urban Development Assistance Listing Number and Name: 14.228 Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii Federal Award Numbers and Years: B-21-DZ-41-0001, 2021 Compliance Requirements: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 2 CFR 200.328(c), DRGR User Manual, Chapter 19, p. 15 CDBG recipients are required to provide a quarterly performance report (QPR) including expenditures incurred period-to-date and in total for each activity. Activity expenditures should be equal to the amount of funds the grantee expended that quarter, regardless of the amount drawn. We found the June 30, 2024 report filed with HUD did not contain accurate information regarding funds expended for the CDBG-Disaster Recovery (CDBG-DR) program as a whole, or for individual activities within the program. OHCS hired a management consultant to provide consulting services, including assistance with preparation of the quarterly reports to HUD for the CDBG-DR grant. Although the department provided the consultant with a report detailing all expenditures for the program, the consultant's approach to QPR reporting did not take into account expenditures the department does not pre-draw for, such as direct and indirect payroll, and services and supplies costs. As a result, only costs for the Homeowner Assistance and Reconstruction Program (HARP) activity and admin costs were reported, although costs were incurred for other program activities. Overall costs were understated by $6.4 million to date and $5.3 million for the period. HARP costs were underreported by $4.3 million to date and $3.8 million for the quarter, and admin costs were underreported by $1 million to date and $0.6 million for the quarter. We recommend quarterly performance reports are prepared to include all expenditures incurred for the period and to date regardless of whether funds have been drawn.
2024-034 Oregon Housing and Community Services Quarterly Performance Report should include all expenditures incurred to date Federal Awarding Agency: U.S. Department of Housing and Urban Development Assistance Listing Number and Name: 14.228 Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii Federal Award Numbers and Years: B-21-DZ-41-0001, 2021 Compliance Requirements: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 2 CFR 200.328(c), DRGR User Manual, Chapter 19, p. 15 CDBG recipients are required to provide a quarterly performance report (QPR) including expenditures incurred period-to-date and in total for each activity. Activity expenditures should be equal to the amount of funds the grantee expended that quarter, regardless of the amount drawn. We found the June 30, 2024 report filed with HUD did not contain accurate information regarding funds expended for the CDBG-Disaster Recovery (CDBG-DR) program as a whole, or for individual activities within the program. OHCS hired a management consultant to provide consulting services, including assistance with preparation of the quarterly reports to HUD for the CDBG-DR grant. Although the department provided the consultant with a report detailing all expenditures for the program, the consultant's approach to QPR reporting did not take into account expenditures the department does not pre-draw for, such as direct and indirect payroll, and services and supplies costs. As a result, only costs for the Homeowner Assistance and Reconstruction Program (HARP) activity and admin costs were reported, although costs were incurred for other program activities. Overall costs were understated by $6.4 million to date and $5.3 million for the period. HARP costs were underreported by $4.3 million to date and $3.8 million for the quarter, and admin costs were underreported by $1 million to date and $0.6 million for the quarter. We recommend quarterly performance reports are prepared to include all expenditures incurred for the period and to date regardless of whether funds have been drawn.
Item 2024-002 - Reporting - Significant Deficiency Name of Federal Agency: United States Department of Health and Human Services Federal Program Name: Early Head Start (EHS) Assistance Listing Number 93.600 Federal Award Identification Number and Year: 04HP000377-04-2023 04CH011372-04-2023 04HE001247-001-2023 Criteria Program regulations and contracts require timely submission of SF-425 FFR reports to the regulatory agent as specified in 2 CFR section 200.328. Condition Durham’s Partnership for Children did not submit timely SF-425 FFR reports related to ongoing 2023 EHS grants. Cause Management does not have controls in place to ensure timely data compilation and reporting. Effect or Potential Effect Management is not in compliance with the program guidelines requiring timely reporting to the regulatory agent. Questioned Costs: N/A Context During testing of the reporting compliance requirement for EHS, it was noted that there were severe delays in submission of all required reports from the current year. The delay in timing of the report filings relates to the availability of accurate financial data (Finding No. 2024-001). Identification of Repeat Finding: Not a repeat finding. Recommendation Management should implement procedures to ensure timely submission of required reports to the regulatory agent. Reporting Views of Responsible Officials The finance director has been replaced by a qualified CPA. Support from an external content specialist was secured to train the current CFO on the proper preparation of the SF-425 reports. Reporting has been brought current. Alert emails from HSES are being reviewed by leadership and the HSES website is being monitored for submission deadlines. Priority is given to ensure timely deliverables.
Item 2024-002 - Reporting - Significant Deficiency Name of Federal Agency: United States Department of Health and Human Services Federal Program Name: Early Head Start (EHS) Assistance Listing Number 93.600 Federal Award Identification Number and Year: 04HP000377-04-2023 04CH011372-04-2023 04HE001247-001-2023 Criteria Program regulations and contracts require timely submission of SF-425 FFR reports to the regulatory agent as specified in 2 CFR section 200.328. Condition Durham’s Partnership for Children did not submit timely SF-425 FFR reports related to ongoing 2023 EHS grants. Cause Management does not have controls in place to ensure timely data compilation and reporting. Effect or Potential Effect Management is not in compliance with the program guidelines requiring timely reporting to the regulatory agent. Questioned Costs: N/A Context During testing of the reporting compliance requirement for EHS, it was noted that there were severe delays in submission of all required reports from the current year. The delay in timing of the report filings relates to the availability of accurate financial data (Finding No. 2024-001). Identification of Repeat Finding: Not a repeat finding. Recommendation Management should implement procedures to ensure timely submission of required reports to the regulatory agent. Reporting Views of Responsible Officials The finance director has been replaced by a qualified CPA. Support from an external content specialist was secured to train the current CFO on the proper preparation of the SF-425 reports. Reporting has been brought current. Alert emails from HSES are being reviewed by leadership and the HSES website is being monitored for submission deadlines. Priority is given to ensure timely deliverables.
Item 2024-002 - Reporting - Significant Deficiency Name of Federal Agency: United States Department of Health and Human Services Federal Program Name: Early Head Start (EHS) Assistance Listing Number 93.600 Federal Award Identification Number and Year: 04HP000377-04-2023 04CH011372-04-2023 04HE001247-001-2023 Criteria Program regulations and contracts require timely submission of SF-425 FFR reports to the regulatory agent as specified in 2 CFR section 200.328. Condition Durham’s Partnership for Children did not submit timely SF-425 FFR reports related to ongoing 2023 EHS grants. Cause Management does not have controls in place to ensure timely data compilation and reporting. Effect or Potential Effect Management is not in compliance with the program guidelines requiring timely reporting to the regulatory agent. Questioned Costs: N/A Context During testing of the reporting compliance requirement for EHS, it was noted that there were severe delays in submission of all required reports from the current year. The delay in timing of the report filings relates to the availability of accurate financial data (Finding No. 2024-001). Identification of Repeat Finding: Not a repeat finding. Recommendation Management should implement procedures to ensure timely submission of required reports to the regulatory agent. Reporting Views of Responsible Officials The finance director has been replaced by a qualified CPA. Support from an external content specialist was secured to train the current CFO on the proper preparation of the SF-425 reports. Reporting has been brought current. Alert emails from HSES are being reviewed by leadership and the HSES website is being monitored for submission deadlines. Priority is given to ensure timely deliverables.
Item 2024-002 - Reporting - Significant Deficiency Name of Federal Agency: United States Department of Health and Human Services Federal Program Name: Early Head Start (EHS) Assistance Listing Number 93.600 Federal Award Identification Number and Year: 04HP000377-04-2023 04CH011372-04-2023 04HE001247-001-2023 Criteria Program regulations and contracts require timely submission of SF-425 FFR reports to the regulatory agent as specified in 2 CFR section 200.328. Condition Durham’s Partnership for Children did not submit timely SF-425 FFR reports related to ongoing 2023 EHS grants. Cause Management does not have controls in place to ensure timely data compilation and reporting. Effect or Potential Effect Management is not in compliance with the program guidelines requiring timely reporting to the regulatory agent. Questioned Costs: N/A Context During testing of the reporting compliance requirement for EHS, it was noted that there were severe delays in submission of all required reports from the current year. The delay in timing of the report filings relates to the availability of accurate financial data (Finding No. 2024-001). Identification of Repeat Finding: Not a repeat finding. Recommendation Management should implement procedures to ensure timely submission of required reports to the regulatory agent. Reporting Views of Responsible Officials The finance director has been replaced by a qualified CPA. Support from an external content specialist was secured to train the current CFO on the proper preparation of the SF-425 reports. Reporting has been brought current. Alert emails from HSES are being reviewed by leadership and the HSES website is being monitored for submission deadlines. Priority is given to ensure timely deliverables.
Item 2024-002 - Reporting - Significant Deficiency Name of Federal Agency: United States Department of Health and Human Services Federal Program Name: Early Head Start (EHS) Assistance Listing Number 93.600 Federal Award Identification Number and Year: 04HP000377-04-2023 04CH011372-04-2023 04HE001247-001-2023 Criteria Program regulations and contracts require timely submission of SF-425 FFR reports to the regulatory agent as specified in 2 CFR section 200.328. Condition Durham’s Partnership for Children did not submit timely SF-425 FFR reports related to ongoing 2023 EHS grants. Cause Management does not have controls in place to ensure timely data compilation and reporting. Effect or Potential Effect Management is not in compliance with the program guidelines requiring timely reporting to the regulatory agent. Questioned Costs: N/A Context During testing of the reporting compliance requirement for EHS, it was noted that there were severe delays in submission of all required reports from the current year. The delay in timing of the report filings relates to the availability of accurate financial data (Finding No. 2024-001). Identification of Repeat Finding: Not a repeat finding. Recommendation Management should implement procedures to ensure timely submission of required reports to the regulatory agent. Reporting Views of Responsible Officials The finance director has been replaced by a qualified CPA. Support from an external content specialist was secured to train the current CFO on the proper preparation of the SF-425 reports. Reporting has been brought current. Alert emails from HSES are being reviewed by leadership and the HSES website is being monitored for submission deadlines. Priority is given to ensure timely deliverables.
FINDING NO. 2024-001 Federal programs FINANCIAL STATEMENTS All federal financial assistance programs Category Internal control Condition found The Organization accounted for its activities based on the services provided, which are educational services. During our financial and compliance audit procedures for the fiscal year ending June 30, 2024, we noted the following conditions related to the accounting procedures and financial reporting practices of the Organization: a. Accounting and interim financial reports are not executed on a current (month-to-month) basis. Accounting journals, general ledger and interim financial reports, such as Balance Sheet, Statement of Activities and Bank Reconciliations, monthly analysis of certain accounts are executed after the end of the related accounting year. Criteria 2 CFR 200.302 (b) (2), (4), (5) and (7) establish that the financial management system of each non Federal entity must provide for the following: i. Cause Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. Contracted outsource for the general accounting of the institution have been unable to prepare the monthly accounting and the related interim financial reports on a current basis. Effect This weakness in the accounting of the institution requires extra efforts from the administration to compensate for the lack of current accountability with additional alternative measures and procedures. Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. Questioned Costs NoneIdentification as a Repeated Finding Yes Recommendations The Organization should enforce its policies and procedures in order to accurately maintain its financial information, and on a timely basis, assuring that they reflect its assets and liabilities, and to maintain an appropriate control over its revenues and the amounts expended, which will allow a proper management and monitoring of operations. These policies and procedures should be enforced to consider the following: • Establish monthly and year end closing procedures. • Prepare monthly or quarterly financial reports for management evaluation and analysis. Views of Responsible Officials The Organization agrees with the finding. Executed actions have substantially improved their year-end closing procedures. They contracted a new accounting firm to improve their accounting and the interim financial reporting.
CHILD NUTRITION CLUSTER – 10.553, 10.555, 10.556, 10.559, 10.582 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: 202424N109944, 202423N109944, 202424N119944, 202423N119944, 202423L160344 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Reporting FEDERAL REPORTING – SF-425 FINANCIAL REPORTS RIDE did not submit complete and timely SF-425 Financial Reports in accordance with federal requirements. Background: RIDE has an individual who initiates the SF-425 report by compiling data from RIFANS. Once completed and entered on the fprs.fns.usda.gov reporting site, the initiator notifies a separate individual to submit and have the report certified. The submission of the SF-425 Federal Financial Report on the reporting website should be no later than 30 calendar days after the reporting period for the quarterly report and the final annual report is due no later than 90 calendar days after the reporting period. The SF-425 is a cumulative report until the final report is submitted. Criteria: According to 2 CFR §200.328(c), RIDE must submit the SF-425 quarterly report no later than 30 calendar days after the reporting period and no later than 90 days after the reporting period for the final annual report. Condition: RIDE did not submit 3 of the 4 (1 quarterly and 2 final annual reports) SF-425 reports within the required period for the Fresh Fruit and Vegetable Program and Supply Chain Assistance (Part of National School Lunch Program). Cause: The department did not have adequate controls to ensure timely and complete reporting of the SF-425 Federal Financial Report. Effect: RIDE did not comply with reporting requirements of SF-425 Federal Financial Reporting. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-033 Establish policies and procedures in conjunction with formalizing internal control that ensures complete and timely reporting of the SF-425 Federal Financial Report.
CHILD NUTRITION CLUSTER – 10.553, 10.555, 10.556, 10.559, 10.582 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: 202424N109944, 202423N109944, 202424N119944, 202423N119944, 202423L160344 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Reporting FEDERAL REPORTING – SF-425 FINANCIAL REPORTS RIDE did not submit complete and timely SF-425 Financial Reports in accordance with federal requirements. Background: RIDE has an individual who initiates the SF-425 report by compiling data from RIFANS. Once completed and entered on the fprs.fns.usda.gov reporting site, the initiator notifies a separate individual to submit and have the report certified. The submission of the SF-425 Federal Financial Report on the reporting website should be no later than 30 calendar days after the reporting period for the quarterly report and the final annual report is due no later than 90 calendar days after the reporting period. The SF-425 is a cumulative report until the final report is submitted. Criteria: According to 2 CFR §200.328(c), RIDE must submit the SF-425 quarterly report no later than 30 calendar days after the reporting period and no later than 90 days after the reporting period for the final annual report. Condition: RIDE did not submit 3 of the 4 (1 quarterly and 2 final annual reports) SF-425 reports within the required period for the Fresh Fruit and Vegetable Program and Supply Chain Assistance (Part of National School Lunch Program). Cause: The department did not have adequate controls to ensure timely and complete reporting of the SF-425 Federal Financial Report. Effect: RIDE did not comply with reporting requirements of SF-425 Federal Financial Reporting. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-033 Establish policies and procedures in conjunction with formalizing internal control that ensures complete and timely reporting of the SF-425 Federal Financial Report.
CHILD NUTRITION CLUSTER – 10.553, 10.555, 10.556, 10.559, 10.582 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: 202424N109944, 202423N109944, 202424N119944, 202423N119944, 202423L160344 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Reporting FEDERAL REPORTING – SF-425 FINANCIAL REPORTS RIDE did not submit complete and timely SF-425 Financial Reports in accordance with federal requirements. Background: RIDE has an individual who initiates the SF-425 report by compiling data from RIFANS. Once completed and entered on the fprs.fns.usda.gov reporting site, the initiator notifies a separate individual to submit and have the report certified. The submission of the SF-425 Federal Financial Report on the reporting website should be no later than 30 calendar days after the reporting period for the quarterly report and the final annual report is due no later than 90 calendar days after the reporting period. The SF-425 is a cumulative report until the final report is submitted. Criteria: According to 2 CFR §200.328(c), RIDE must submit the SF-425 quarterly report no later than 30 calendar days after the reporting period and no later than 90 days after the reporting period for the final annual report. Condition: RIDE did not submit 3 of the 4 (1 quarterly and 2 final annual reports) SF-425 reports within the required period for the Fresh Fruit and Vegetable Program and Supply Chain Assistance (Part of National School Lunch Program). Cause: The department did not have adequate controls to ensure timely and complete reporting of the SF-425 Federal Financial Report. Effect: RIDE did not comply with reporting requirements of SF-425 Federal Financial Reporting. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-033 Establish policies and procedures in conjunction with formalizing internal control that ensures complete and timely reporting of the SF-425 Federal Financial Report.
CHILD NUTRITION CLUSTER – 10.553, 10.555, 10.556, 10.559, 10.582 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: 202424N109944, 202423N109944, 202424N119944, 202423N119944, 202423L160344 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Reporting FEDERAL REPORTING – SF-425 FINANCIAL REPORTS RIDE did not submit complete and timely SF-425 Financial Reports in accordance with federal requirements. Background: RIDE has an individual who initiates the SF-425 report by compiling data from RIFANS. Once completed and entered on the fprs.fns.usda.gov reporting site, the initiator notifies a separate individual to submit and have the report certified. The submission of the SF-425 Federal Financial Report on the reporting website should be no later than 30 calendar days after the reporting period for the quarterly report and the final annual report is due no later than 90 calendar days after the reporting period. The SF-425 is a cumulative report until the final report is submitted. Criteria: According to 2 CFR §200.328(c), RIDE must submit the SF-425 quarterly report no later than 30 calendar days after the reporting period and no later than 90 days after the reporting period for the final annual report. Condition: RIDE did not submit 3 of the 4 (1 quarterly and 2 final annual reports) SF-425 reports within the required period for the Fresh Fruit and Vegetable Program and Supply Chain Assistance (Part of National School Lunch Program). Cause: The department did not have adequate controls to ensure timely and complete reporting of the SF-425 Federal Financial Report. Effect: RIDE did not comply with reporting requirements of SF-425 Federal Financial Reporting. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-033 Establish policies and procedures in conjunction with formalizing internal control that ensures complete and timely reporting of the SF-425 Federal Financial Report.
CHILD NUTRITION CLUSTER – 10.553, 10.555, 10.556, 10.559, 10.582 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: 202424N109944, 202423N109944, 202424N119944, 202423N119944, 202423L160344 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Reporting FEDERAL REPORTING – SF-425 FINANCIAL REPORTS RIDE did not submit complete and timely SF-425 Financial Reports in accordance with federal requirements. Background: RIDE has an individual who initiates the SF-425 report by compiling data from RIFANS. Once completed and entered on the fprs.fns.usda.gov reporting site, the initiator notifies a separate individual to submit and have the report certified. The submission of the SF-425 Federal Financial Report on the reporting website should be no later than 30 calendar days after the reporting period for the quarterly report and the final annual report is due no later than 90 calendar days after the reporting period. The SF-425 is a cumulative report until the final report is submitted. Criteria: According to 2 CFR §200.328(c), RIDE must submit the SF-425 quarterly report no later than 30 calendar days after the reporting period and no later than 90 days after the reporting period for the final annual report. Condition: RIDE did not submit 3 of the 4 (1 quarterly and 2 final annual reports) SF-425 reports within the required period for the Fresh Fruit and Vegetable Program and Supply Chain Assistance (Part of National School Lunch Program). Cause: The department did not have adequate controls to ensure timely and complete reporting of the SF-425 Federal Financial Report. Effect: RIDE did not comply with reporting requirements of SF-425 Federal Financial Reporting. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-033 Establish policies and procedures in conjunction with formalizing internal control that ensures complete and timely reporting of the SF-425 Federal Financial Report.
SPECIAL EDUCATION CLUSTER (IDEA) – 84.027, 84.173 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: HO27A220054-22A, H173A220057 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The Department of Education (RIDE) has not implemented adequate subrecipient monitoring activities to ensure compliance with federal regulations. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. RIDE performs its subrecipient monitoring through the review of audit reports, desk reviews and performing site visits deemed high risk. High-risk subrecipients are determined through the review of audit reports, completion of a desk review checklist, and the completion of an annual survey completed by the subrecipients then scored by RIDE. Criteria: Federal regulations 2 CFR §200.329, require Pass Through Entities (PTE), such as the State, to monitor grant subrecipients to ensure that federal funds are spent appropriately. Federal Regulation 2 CFR §200.332 Subpart B requires that the PTE provide subrecipients with clear grant information, including grant terms, required financial reporting, and audit requirements. Per 2 CFR § 200.328, PTEs must collect financial data from subrecipients no less than annually. Condition: We identified some deficiencies in internal controls relating to subrecipient monitoring during our audit. Deficiencies included a lack of required monitoring documentation (e.g., annual surveys, Single Audit Reports) submitted by subrecipients and failure by RIDE to appropriately consider these deficiencies within their consideration of subrecipient risk. Of the 65 subrecipients receiving $55.3 million, we selected 25 subrecipients for testing and found 4 subrecipients with control deficiencies that prevented RIDE from complying with the subrecipient monitoring requirement as follows: • RIDE was unable to provide documentation supporting grant award information communicated to one subrecipient. Additionally, the required risk assessment for the Special Education Cluster was not performed for this subrecipient. • RIDE was unable to provide the completed Desk Review checklist for 3 subrecipients. These 3 subrecipients also did not complete RIDE’s required annual survey. We found that the lack of annual survey completion did not result in RIDE assessing higher risk for one subrecipient and thus no site visit was performed. The other 2 subrecipients were assessed at high risk, however, no site visit was performed for these subrecipients. • A subrecipient did not submit its fiscal year 2022 and 2023 Single Audit Reports and RIDE did not modify its risk assessment accordingly. RIDE was also unable to provide documentation supporting its follow-up (i.e., meeting discussing the submission of the Single Audit Report) with the subrecipients. Additionally, RIDE’s risk assessment was not adequate to identify this subrecipient as high risk. Internal controls over subrecipient monitoring would be improved by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed. Implementing site visits when subrecipients do not comply with documentation requirements would ensure that monitoring procedures align with the risk associated with the subrecipient. Cause: Lack of adequate dedicated agency resources and insufficient controls to ensure compliance with federal requirements. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-047 Improve internal controls over subrecipient monitoring by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed.
SPECIAL EDUCATION CLUSTER (IDEA) – 84.027, 84.173 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: HO27A220054-22A, H173A220057 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The Department of Education (RIDE) has not implemented adequate subrecipient monitoring activities to ensure compliance with federal regulations. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. RIDE performs its subrecipient monitoring through the review of audit reports, desk reviews and performing site visits deemed high risk. High-risk subrecipients are determined through the review of audit reports, completion of a desk review checklist, and the completion of an annual survey completed by the subrecipients then scored by RIDE. Criteria: Federal regulations 2 CFR §200.329, require Pass Through Entities (PTE), such as the State, to monitor grant subrecipients to ensure that federal funds are spent appropriately. Federal Regulation 2 CFR §200.332 Subpart B requires that the PTE provide subrecipients with clear grant information, including grant terms, required financial reporting, and audit requirements. Per 2 CFR § 200.328, PTEs must collect financial data from subrecipients no less than annually. Condition: We identified some deficiencies in internal controls relating to subrecipient monitoring during our audit. Deficiencies included a lack of required monitoring documentation (e.g., annual surveys, Single Audit Reports) submitted by subrecipients and failure by RIDE to appropriately consider these deficiencies within their consideration of subrecipient risk. Of the 65 subrecipients receiving $55.3 million, we selected 25 subrecipients for testing and found 4 subrecipients with control deficiencies that prevented RIDE from complying with the subrecipient monitoring requirement as follows: • RIDE was unable to provide documentation supporting grant award information communicated to one subrecipient. Additionally, the required risk assessment for the Special Education Cluster was not performed for this subrecipient. • RIDE was unable to provide the completed Desk Review checklist for 3 subrecipients. These 3 subrecipients also did not complete RIDE’s required annual survey. We found that the lack of annual survey completion did not result in RIDE assessing higher risk for one subrecipient and thus no site visit was performed. The other 2 subrecipients were assessed at high risk, however, no site visit was performed for these subrecipients. • A subrecipient did not submit its fiscal year 2022 and 2023 Single Audit Reports and RIDE did not modify its risk assessment accordingly. RIDE was also unable to provide documentation supporting its follow-up (i.e., meeting discussing the submission of the Single Audit Report) with the subrecipients. Additionally, RIDE’s risk assessment was not adequate to identify this subrecipient as high risk. Internal controls over subrecipient monitoring would be improved by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed. Implementing site visits when subrecipients do not comply with documentation requirements would ensure that monitoring procedures align with the risk associated with the subrecipient. Cause: Lack of adequate dedicated agency resources and insufficient controls to ensure compliance with federal requirements. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-047 Improve internal controls over subrecipient monitoring by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed.
SPECIAL EDUCATION CLUSTER (IDEA) – 84.027, 84.173 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: HO27A220054-22A, H173A220057 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The Department of Education (RIDE) has not implemented adequate subrecipient monitoring activities to ensure compliance with federal regulations. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. RIDE performs its subrecipient monitoring through the review of audit reports, desk reviews and performing site visits deemed high risk. High-risk subrecipients are determined through the review of audit reports, completion of a desk review checklist, and the completion of an annual survey completed by the subrecipients then scored by RIDE. Criteria: Federal regulations 2 CFR §200.329, require Pass Through Entities (PTE), such as the State, to monitor grant subrecipients to ensure that federal funds are spent appropriately. Federal Regulation 2 CFR §200.332 Subpart B requires that the PTE provide subrecipients with clear grant information, including grant terms, required financial reporting, and audit requirements. Per 2 CFR § 200.328, PTEs must collect financial data from subrecipients no less than annually. Condition: We identified some deficiencies in internal controls relating to subrecipient monitoring during our audit. Deficiencies included a lack of required monitoring documentation (e.g., annual surveys, Single Audit Reports) submitted by subrecipients and failure by RIDE to appropriately consider these deficiencies within their consideration of subrecipient risk. Of the 65 subrecipients receiving $55.3 million, we selected 25 subrecipients for testing and found 4 subrecipients with control deficiencies that prevented RIDE from complying with the subrecipient monitoring requirement as follows: • RIDE was unable to provide documentation supporting grant award information communicated to one subrecipient. Additionally, the required risk assessment for the Special Education Cluster was not performed for this subrecipient. • RIDE was unable to provide the completed Desk Review checklist for 3 subrecipients. These 3 subrecipients also did not complete RIDE’s required annual survey. We found that the lack of annual survey completion did not result in RIDE assessing higher risk for one subrecipient and thus no site visit was performed. The other 2 subrecipients were assessed at high risk, however, no site visit was performed for these subrecipients. • A subrecipient did not submit its fiscal year 2022 and 2023 Single Audit Reports and RIDE did not modify its risk assessment accordingly. RIDE was also unable to provide documentation supporting its follow-up (i.e., meeting discussing the submission of the Single Audit Report) with the subrecipients. Additionally, RIDE’s risk assessment was not adequate to identify this subrecipient as high risk. Internal controls over subrecipient monitoring would be improved by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed. Implementing site visits when subrecipients do not comply with documentation requirements would ensure that monitoring procedures align with the risk associated with the subrecipient. Cause: Lack of adequate dedicated agency resources and insufficient controls to ensure compliance with federal requirements. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-047 Improve internal controls over subrecipient monitoring by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed.