Criteria: Per the Compliance Requirements-Procurement and Suspension and Debarment-Compliance Requirement-Procurement, “Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR section 200.329(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in case of acquisitions for construction subject to Wage Rate Requirement (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.32 (a). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (CFR section 200.320 (b)). “ Condition: For the procurement of small purchases over $10,000, the Management Agent did not obtain price or rate quotations from an adequate number of qualified sources for the following procurements per the Uniform Guidance for a security vendor for the amount of $131,808. Effect: The Project did not follow small purchase procedures set forth in Compliance Requirements-Procurement. Cause: Due to the turnover of Management Agent personnel, the documentation to support small purchases was unavailable and/or not performed. Recommendation: We recommend that the Project follows a small purchase method for procurement that exceeds $10,000. Views of Responsible Officials and Corrective Action Plan: No disagreements with the audit finding.
Finding 2021-006 Program: Office for Coastal Management Federal Financial Assistance Listing: 11.473 Federal Grantor: U.S. Department of Commerce Passed-through: National Fish and Wildlife Foundation Award No. and Year: 0318.19.070225 (2020) Compliance Requirements: Reporting Type of Finding: Material Non-Compliance/Material Weakness Criteria: 2 CFR 200.328 - Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. 2 CFR 200.329(c)(1) -Requirements state that the non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Condition: For three of the four reports selected for testing, CFSC did not submit the reports to the National Fish and Wildlife Foundation by the required date. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was not used. We selected all four reports filed during year. The condition noted above was identified during our procedures over the CFSC’s reporting provisions. Repeat Finding from Prior Year: No Effect: CFSC did not submit required reports in a timely manner, increasing the risk of noncompliance. Cause: CFSC’s procedures did not consistently ensure that the required reports were submitted on a timely basis. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to ensure that all required reports are submitted on a timely basis to the appropriate Federal Agency or Pass-Through Entity. Views of Responsible Officials and Planned Corrective Actions: See Separate Corrective Action Plan.
Finding 2021-007 Program: Office for Coastal Management Federal Financial Assistance Listing: 11.473 Federal Grantor: U.S. Department of Commerce Passed-through: National Fish and Wildlife Foundation Award No. and Year: 0318.19.070225 (2020) Compliance Requirements: Reporting Type of Finding: Material Non-Compliance/Material Weakness Criteria: 2 CFR 200.302(b)(2) - Requirements state that there must be 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: Expenditures for one financial report that was selected for testing did not agree with the expenditures that were reported on the SEFA and recorded in the General Ledger (difference of $11,791), based on the dates requested in the report. CFSC did not include known operational expenses for the period that were program costs at the time the report was due, which resulted in underreporting expenditures by $11,791. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was not used. We selected all four reports filed during year. The condition noted above was identified during our procedures over CFSC’s reporting provisions. Repeat Finding from Prior Year: No Effect: CFSC did not include all known expenditures at the time the report was submitted to the National Fish and Wildlife Foundation, increasing the risk of noncompliance. Cause: CFSC’s procedures did not consistently ensure that all known expenditures at the time the report was submitted were included. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to ensure that all known expenditures are included at the time reports are required to be submitted. Views of Responsible Officials and Planned Corrective Actions: See Separate Corrective Action Plan.
REPORTING, I DID NOT NOTE ANY OF THE REQUIRED QUARTERLY REPORTING FOR THE CARES ACT GRANT. I ALSO DID NOT NOTE ANY INTERIM OR ANNUAL REPORTS FILED FOR THE ARP GRANT. PER 2 CFR, SECTION 200.328 AND 200.329, THE NVT MUST COMPLY WITH ANY FINANCIAL AND PROGRAMMATIC REPORTING REQUIREMENTS. NO QUESTIONED COSTS. MANAGEMENT DID NOT HAVE CONTROLS IN PLACE TO ENSURE THAT ALL GRANT REPORTS WERE FILED TIMELY. I WAS NOT ABLE TO REVIEW ANY OF THE 4 QUARTERLY FINANCIAL OR NARRATIVE REPORTS FOR THE CARES ACT GRANT. I WAS ALSO NOT ABLE TO REVIEW THE ANNUAL REQUIRED REPORT FOR THE ARP GRANT. THE NVT IS DELINQUENT IN ITS REPORTING FOR THESE TWO GRANTS. MANAGEMENT NEEDS TO ENSURE THAT ALL GRANT REPORTS ARE DONE AND SUBMITTED TIMELY AND RETAINED WITHIN THE GRANT FILES OF THE NVT. THIS FINDING WAS NOTED AS FINDING 2020-002.
OTHER, THE NVT DID NOT SUBMIT THE REPORTING PACKAGE TIMELY IN ACCORDANCE WITH THE UNIFORM GUIDANCE REQUIREMENT OF SUBMITTING THE AUDIT WITHIN THE EARLIER OF 30 DAYS AFTER RECEIPT OF THE AUDIT REPORT, OR NINE MONTHS AFTER THE END OF THE AUDIT PERIOD. PER 2 CFR, SECTION 200.328 AND 200.329, THE COUNCIL MUST COMPLY WITH ANY FINANCIAL AND PROGRAMATTIC REPORTING REQUIREMENTS. PER SECTION 200.501, THE NVT MUST HAEV AN AUDIT PERFORMED AND SUBMITTED WITHIN 9 MONTHS OF YEAR END. NO QUESTIONED COSTS. MANAGEMENT DID NOT ENSURE THAT THE AUDITS WERE PERFORMED TIMELY. LATE REPORTING COULD JEOPARDIZE GRANT FUNDING. I RECOMMEND THAT THE COUNCIL ENSURE TIMELY AUDITS FOR FUTURE AUDITS. THIS FINDING WAS NOTED AS FINDING 2020-003
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Auditee has improperly tracked grant awards and expenditures. Federal Programs Impacted: 17,258 (WIOA Cluster). Questioned Costs: None. Condition: The WDBEA expended more than $750,000 in federal awards, triggering a single audit requirement. However, when asked to provide a schedule of expenditures of federal awards, client gave different amounts of revenues and expenditures than those provided through external confirmation by oversight agencies. Criteria: 2 CFR Section 200.329 states that it is the auditee's responsibility to monitor their activities for which federal awards are used. Cause: Unallowable costs among other items were included in the client's schedule of expenditures of federal awards. In addition, the books kept by the former finance manager were inadequate to properly track grant awards and expenditures. Effect: Difficulty in ascertaining the true balances of federal revenues and expenditures as reported on the schedule of expenditures of federal awards. Recommendation: We recommend the WDBEA maintains an effort to properly track and report federal awards and expenditures. Management Response: Managmeent will develop procedures which adequately address shortcomings of grant tracking and further solidify the processes for tracking and reporting of grant funds.
Internal control failtures including two employee timesheets being unreviewed by agreed-upon personnel. Federal Programs Impacted: 17.258 (WIOA Cluster) Questioned Costs: None. Condition: Per the auditee's internal control procedures, employee timesheets are to be signed off on by one of the individual listed above. However, we noted two exceptions throughout all procedures applied. Criteria: 2 CFR Section 200.329 states that it is the auditee's responsibility to monitor their activities for which federal awards are used. A component of this is to develop effective internal controls to ensure compliance with relevant compliance requirements. Cause: Internal control procedures failed, and management missed two timesheets for which review was needed. Effect: Disallowed costs related to payroll could have been charged to federal awards. Recommendation: We recommend management ensure all internal control procedures are being followed as outlined. Management Response: Management agrees with this finding and will ensure internal controls are followed as outlined.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria: Financial reporting requirements are identified in 2 CFR section 200.328. Monitoring and reporting program performance requirements are identified in 2 CFR section 200.329. Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Condition: 1) There was no evidence of date of timely submission for 11 reports tested; 2) There was no evidence of review for five reports tested; 3) Five reports tested did not tie to the underlying support by an immaterial amount. Context: There was a total of 28 financial reports and four performance reports. Questioned Costs: N/A Cause: Internal controls surrounding reporting were not properly designed and implemented and an audit trail for timely submission and approval of reports was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over reporting requirements provides an opportunity for noncompliance and errors. Repeat Finding: N/A Recommendation: We recommend that the Organization design, implement, and monitor internal controls over reporting as well as maintain source documentation to support amounts reported. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.
Auditee has improperly tracked grant awards and expenditures. Federal Programs Impacted: 17,258 (WIOA Cluster). Questioned Costs: None. Condition: The WDBEA expended more than $750,000 in federal awards, triggering a single audit requirement. However, when asked to provide a schedule of expenditures of federal awards, client gave different amounts of revenues and expenditures than those provided through external confirmation by oversight agencies. Criteria: 2 CFR Section 200.329 states that it is the auditee's responsibility to monitor their activities for which federal awards are used. Cause: Unallowable costs among other items were included in the client's schedule of expenditures of federal awards. In addition, the books kept by the former finance manager were inadequate to properly track grant awards and expenditures. Effect: Difficulty in ascertaining the true balances of federal revenues and expenditures as reported on the schedule of expenditures of federal awards. Recommendation: We recommend the WDBEA maintains an effort to properly track and report federal awards and expenditures. Management Response: Managmeent will develop procedures which adequately address shortcomings of grant tracking and further solidify the processes for tracking and reporting of grant funds.
Internal control failtures including two employee timesheets being unreviewed by agreed-upon personnel. Federal Programs Impacted: 17.258 (WIOA Cluster) Questioned Costs: None. Condition: Per the auditee's internal control procedures, employee timesheets are to be signed off on by one of the individual listed above. However, we noted two exceptions throughout all procedures applied. Criteria: 2 CFR Section 200.329 states that it is the auditee's responsibility to monitor their activities for which federal awards are used. A component of this is to develop effective internal controls to ensure compliance with relevant compliance requirements. Cause: Internal control procedures failed, and management missed two timesheets for which review was needed. Effect: Disallowed costs related to payroll could have been charged to federal awards. Recommendation: We recommend management ensure all internal control procedures are being followed as outlined. Management Response: Management agrees with this finding and will ensure internal controls are followed as outlined.
Condition: During our review of Federal Financial Reports (SF-425) for the Emergency Management Performance Grant (EMPG) covering program years 2018, 2019, and 2020, we noted multiple reporting deficiencies across all four reports reviewed, including late submissions (in some cases more than one year late), undated reports with no evidence of submission timeliness, incomplete financial data where federal cash receipts or disbursements were reported as zero despite active grant activity, inconsistent or missing expenditure information, incorrect or missing recipient share (matching funds), unreconciled balances between SF-425 reports and PRIFAS or the SEFA, lack of supporting documentation or reconciliation schedules, and no evidence of internal review or approval controls. Criteria: Under 2 CFR 200.327–200.329 and 2 CFR 200.302(b)(6), non-Federal entities must submit accurate, complete, timely performance and financial reports supported by accounting records; SF-425 reports must reflect financial results of each award, be supported by the accounting records, include federal and recipient share, and be submitted no later than 30 days after the end of the reporting period. Context: All four EMPG SF-425 reports reviewed exhibited at least one of the identified deficiencies, indicating systemic noncompliance with federal reporting requirements and insufficient monitoring over the reporting process. Cause: The Bureau lacks effective internal controls and supervisory review over the preparation, reconciliation, and submission of SF-425 reports, including inadequate coordination between accounting and grants management areas and no formal process to ensure reconciliation to PRIFAS accounting data prior to submission. Effect: The absence of timely, accurate, and reconciled financial reporting increases the risk of misstated federal program expenditures, may result in grantor sanctions such as withholding or suspension of federal funds, and impairs the Bureau’s ability to demonstrate compliance with Uniform Guidance reporting requirements. Recommendation: Establish and document formal procedures to ensure timely preparation, review, and submission of SF-425 reports; implement a reconciliation checklist requiring agreement of reported data to PRIFAS and SEFA records; ensure each report includes federal and recipient share, drawdown activity, and unliquidated obligations; designate an official responsible for review and approval prior to filing with retained evidence of submission; and provide staff training on federal reporting requirements under 2 CFR 200.327–200.329. Questioned Costs: None. Management Response: See corrective action plan.
FINDING 2020-003 Subject: Water and Waste Disposal Systems for Rural Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): CY2020 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context Annual financial reports are to be filed with the awarding agency. The Town was required to file two reports during the audit period, the Statement of Budget, Income and Equity (Form RD 442-2) and the Balance Sheet (Form RD 442-3) with the U.S. Department of Agriculture (USDA). The Form RD 442-2 covers financial operations relating to the Town's water main replacement project and the Form RD 442-3 presents the financial status of the project. In both instances, a borrower may submit the financial data on other forms, provided the forms are in a similar format and signed and dated by the organization's official to certify the correctness of the information. Alternatively, an annual audit may be submitted in lieu of the forms. The Town did not prepare or file the required reports, submit financial data on other forms, or submit an annual audit in lieu of the forms to the USDA. As such, we could not substantiate the financial operations or the financial status of the project. Additionally, the Town did not obtain a written waiver from the USDA to allow the Town not to file the reports. The lack of internal controls and noncompliance were systemic issues, which occurred throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 TOWN OF MONROEVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 7 CFR 1780.47(e) states: "Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used." Cause Management of the Town had not established an effective system of internal controls that segregated key functions and would have ensured compliance with reporting requirements of the grant. As a result, Form 442-2 and Form 442-3 were not filed. The Town did not obtain a written waiver from the USDA to support the reports not being filed. Effect Without the proper implementation of an effectively designed system of internal controls, the Town cannot ensure the required reports were filed with the awarding agency. As such, the USDA does not have accurate and current information to discern the financial status of the Town's project. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management establish a proper system of internal controls and develop policies and procedures to ensure required reports, or allowable alternatives, are completed and filed with the USDA. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2020-003 Subject: Water and Waste Disposal Systems for Rural Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): CY2020 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context Annual financial reports are to be filed with the awarding agency. The Town was required to file two reports during the audit period, the Statement of Budget, Income and Equity (Form RD 442-2) and the Balance Sheet (Form RD 442-3) with the U.S. Department of Agriculture (USDA). The Form RD 442-2 covers financial operations relating to the Town's water main replacement project and the Form RD 442-3 presents the financial status of the project. In both instances, a borrower may submit the financial data on other forms, provided the forms are in a similar format and signed and dated by the organization's official to certify the correctness of the information. Alternatively, an annual audit may be submitted in lieu of the forms. The Town did not prepare or file the required reports, submit financial data on other forms, or submit an annual audit in lieu of the forms to the USDA. As such, we could not substantiate the financial operations or the financial status of the project. Additionally, the Town did not obtain a written waiver from the USDA to allow the Town not to file the reports. The lack of internal controls and noncompliance were systemic issues, which occurred throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 TOWN OF MONROEVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 7 CFR 1780.47(e) states: "Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used." Cause Management of the Town had not established an effective system of internal controls that segregated key functions and would have ensured compliance with reporting requirements of the grant. As a result, Form 442-2 and Form 442-3 were not filed. The Town did not obtain a written waiver from the USDA to support the reports not being filed. Effect Without the proper implementation of an effectively designed system of internal controls, the Town cannot ensure the required reports were filed with the awarding agency. As such, the USDA does not have accurate and current information to discern the financial status of the Town's project. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management establish a proper system of internal controls and develop policies and procedures to ensure required reports, or allowable alternatives, are completed and filed with the USDA. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2020-004 – Reporting Significant Deficiency in Internal Controls Over Compliance and Instance of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 Award Year(s): 2019 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.329(c)(1) states, "Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period." Condition: The Organization submitted their "Combined MRF & LLRF Status Reports" for the quarter ending June 30, 2020, more than 30 days after the end of the quarter. Questioned costs: None Context: During our audit procedures, we tested two of the four quarterly “Combined MRF & LLRF Status Reports” and noted that the report for the period ending June 30, 2020, was submitted on October 13, 2020, which is 106 calendar days after period-end. The report is due 30 days after the period ends. Cause: The Organization did not have internal controls in place to ensure the “Combined MRF & LLRF Status Reports” were being filed within 30 calendar days of period end. Effect or potential effect: The Organization is out of compliance with 2 CFR 200.329(c)(1). Repeat finding: No Recommendation: The Organization should implement controls to ensure all reporting, both financial and performance, is completed, reviewed, and submitted before the specific report deadlines. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all reports are completed, reviewed, and submitted by specific report deadlines. For additional information, see the Organization’s separate report for planned corrective actions.
2020-004 – Reporting Significant Deficiency in Internal Controls Over Compliance and Instance of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 Award Year(s): 2019 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.329(c)(1) states, "Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period." Condition: The Organization submitted their "Combined MRF & LLRF Status Reports" for the quarter ending June 30, 2020, more than 30 days after the end of the quarter. Questioned costs: None Context: During our audit procedures, we tested two of the four quarterly “Combined MRF & LLRF Status Reports” and noted that the report for the period ending June 30, 2020, was submitted on October 13, 2020, which is 106 calendar days after period-end. The report is due 30 days after the period ends. Cause: The Organization did not have internal controls in place to ensure the “Combined MRF & LLRF Status Reports” were being filed within 30 calendar days of period end. Effect or potential effect: The Organization is out of compliance with 2 CFR 200.329(c)(1). Repeat finding: No Recommendation: The Organization should implement controls to ensure all reporting, both financial and performance, is completed, reviewed, and submitted before the specific report deadlines. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all reports are completed, reviewed, and submitted by specific report deadlines. For additional information, see the Organization’s separate report for planned corrective actions.
2020-004 – Reporting Significant Deficiency in Internal Controls Over Compliance and Instance of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 Award Year(s): 2019 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.329(c)(1) states, "Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period." Condition: The Organization submitted their "Combined MRF & LLRF Status Reports" for the quarter ending June 30, 2020, more than 30 days after the end of the quarter. Questioned costs: None Context: During our audit procedures, we tested two of the four quarterly “Combined MRF & LLRF Status Reports” and noted that the report for the period ending June 30, 2020, was submitted on October 13, 2020, which is 106 calendar days after period-end. The report is due 30 days after the period ends. Cause: The Organization did not have internal controls in place to ensure the “Combined MRF & LLRF Status Reports” were being filed within 30 calendar days of period end. Effect or potential effect: The Organization is out of compliance with 2 CFR 200.329(c)(1). Repeat finding: No Recommendation: The Organization should implement controls to ensure all reporting, both financial and performance, is completed, reviewed, and submitted before the specific report deadlines. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all reports are completed, reviewed, and submitted by specific report deadlines. For additional information, see the Organization’s separate report for planned corrective actions.
2020-004 – Reporting Significant Deficiency in Internal Controls Over Compliance and Instance of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 Award Year(s): 2019 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.329(c)(1) states, "Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period." Condition: The Organization submitted their "Combined MRF & LLRF Status Reports" for the quarter ending June 30, 2020, more than 30 days after the end of the quarter. Questioned costs: None Context: During our audit procedures, we tested two of the four quarterly “Combined MRF & LLRF Status Reports” and noted that the report for the period ending June 30, 2020, was submitted on October 13, 2020, which is 106 calendar days after period-end. The report is due 30 days after the period ends. Cause: The Organization did not have internal controls in place to ensure the “Combined MRF & LLRF Status Reports” were being filed within 30 calendar days of period end. Effect or potential effect: The Organization is out of compliance with 2 CFR 200.329(c)(1). Repeat finding: No Recommendation: The Organization should implement controls to ensure all reporting, both financial and performance, is completed, reviewed, and submitted before the specific report deadlines. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all reports are completed, reviewed, and submitted by specific report deadlines. For additional information, see the Organization’s separate report for planned corrective actions.
I NOTED THAT ALL OF THE REQUIRED FINANCIAL QUARTERLY AND NARRATIVE REPORTS WERE NOT FILED OR RETAINED BY THE BIA 638 GRANTS. PER 2 CFR, SECTION 200.328 AND 200.329, THE COUNCIL MUST COMPLY WITH ANY FINANCIAL AND PROGRAMATIC REPORTING REQUIREMENTS, NO QUESTIONED COSTS, MANAGEMENT DID NOT HAVE CONTROLS IN PLACE TO ENSURE THAT ALL GRANT REPORTS WERE FILED TIMELY. I WAS NOT ABLE TO REVIEW THE 4 QUARTERLY FINANCIAL OR NARRATIVE REPORTS FOR THESE THREE GRANTS, THE COUNCIL IS DELINQUENT IN THE REPORTING FOR THESE GRANTS.
I NOTED THAT ALL OF THE REQUIRED FINANCIAL QUARTERLY AND NARRATIVE REPORTS WERE NOT FILED OR RETAINED BY THE BIA 638 GRANTS. PER 2 CFR, SECTION 200.328 AND 200.329, THE COUNCIL MUST COMPLY WITH ANY FINANCIAL AND PROGRAMATIC REPORTING REQUIREMENTS, NO QUESTIONED COSTS, MANAGEMENT DID NOT HAVE CONTROLS IN PLACE TO ENSURE THAT ALL GRANT REPORTS WERE FILED TIMELY. I WAS NOT ABLE TO REVIEW THE 4 QUARTERLY FINANCIAL OR NARRATIVE REPORTS FOR THESE THREE GRANTS, THE COUNCIL IS DELINQUENT IN THE REPORTING FOR THESE GRANTS.
I NOTED THAT ALL OF THE REQUIRED FINANCIAL QUARTERLY AND NARRATIVE REPORTS WERE NOT FILED OR RETAINED BY THE BIA 638 GRANTS. PER 2 CFR, SECTION 200.328 AND 200.329, THE COUNCIL MUST COMPLY WITH ANY FINANCIAL AND PROGRAMATIC REPORTING REQUIREMENTS, NO QUESTIONED COSTS, MANAGEMENT DID NOT HAVE CONTROLS IN PLACE TO ENSURE THAT ALL GRANT REPORTS WERE FILED TIMELY. I WAS NOT ABLE TO REVIEW THE 4 QUARTERLY FINANCIAL OR NARRATIVE REPORTS FOR THESE THREE GRANTS, THE COUNCIL IS DELINQUENT IN THE REPORTING FOR THESE GRANTS.
I NOTED THAT ALL OF THE REQUIRED FINANCIAL QUARTERLY AND NARRATIVE REPORTS WERE NOT FILED OR RETAINED BY THE BIA 638 GRANTS. PER 2 CFR, SECTION 200.328 AND 200.329, THE COUNCIL MUST COMPLY WITH ANY FINANCIAL AND PROGRAMATIC REPORTING REQUIREMENTS, NO QUESTIONED COSTS, MANAGEMENT DID NOT HAVE CONTROLS IN PLACE TO ENSURE THAT ALL GRANT REPORTS WERE FILED TIMELY. I WAS NOT ABLE TO REVIEW THE 4 QUARTERLY FINANCIAL OR NARRATIVE REPORTS FOR THESE THREE GRANTS, THE COUNCIL IS DELINQUENT IN THE REPORTING FOR THESE GRANTS.
I NOTED THAT ALL OF THE REQUIRED FINANCIAL QUARTERLY AND NARRATIVE REPORTS WERE NOT FILED OR RETAINED BY THE BIA 638 GRANTS. PER 2 CFR, SECTION 200.328 AND 200.329, THE COUNCIL MUST COMPLY WITH ANY FINANCIAL AND PROGRAMATIC REPORTING REQUIREMENTS, NO QUESTIONED COSTS, MANAGEMENT DID NOT HAVE CONTROLS IN PLACE TO ENSURE THAT ALL GRANT REPORTS WERE FILED TIMELY. I WAS NOT ABLE TO REVIEW THE 4 QUARTERLY FINANCIAL OR NARRATIVE REPORTS FOR THESE THREE GRANTS, THE COUNCIL IS DELINQUENT IN THE REPORTING FOR THESE GRANTS.
I NOTED THAT ALL OF THE REQUIRED FINANCIAL QUARTERLY AND NARRATIVE REPORTS WERE NOT FILED OR RETAINED BY THE BIA 638 GRANTS. PER 2 CFR, SECTION 200.328 AND 200.329, THE COUNCIL MUST COMPLY WITH ANY FINANCIAL AND PROGRAMATIC REPORTING REQUIREMENTS, NO QUESTIONED COSTS, MANAGEMENT DID NOT HAVE CONTROLS IN PLACE TO ENSURE THAT ALL GRANT REPORTS WERE FILED TIMELY. I WAS NOT ABLE TO REVIEW THE 4 QUARTERLY FINANCIAL OR NARRATIVE REPORTS FOR THESE THREE GRANTS, THE COUNCIL IS DELINQUENT IN THE REPORTING FOR THESE GRANTS.