Federal Program Name: COVID-19 - Education Stabilization Fund Federal Agency: Department of Education Federal Assistance Listing Title and Number: COVID-19 - Education Stabilization Fund, 84.425U Criteria or Specific Requirement: Reporting - CFR Part 200.302(b) states, “The financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329." This is a repeat finding from the prior year (2023-002). Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with federal requirements related to the reporting compliance requirements. (Other Instance of Noncompliance and Deficiency) Questioned Costs: None noted Context: The School Corporation submitted one ESSER III report where the expenses per the report did not tie to the ledger or the Schedule of Expenditures of Federal Awards by approximately $300,000. Effect: The ESSER III report was not supported by the School Corporation’s financial records. Cause: The School Corporation’s internal controls were not applied to the reporting process that required retention of documentation originally used to prepare the financial portion of the ESSER III report.. Recommendation: Management should establish a proper system of internal controls and strengthen its policies and procedures to ensure all reports submitted on behalf of the Education Stabilization Fund program funds are accurate and are reconciled to the School Corporation’s financial records. Views of Responsible Officials and Planned Corrective Action: The District notes the finding as presented. See Corrective Action Plan prepared by management Persons responsible for implementing: Matthew Miles, CFO Anticipated completion date: July 15, 2025.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2022-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: CFR § 200.329 indicates that the nonfederal entity is responsible for oversight of the operations of the Federal award supported activities. The nonfederal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Condition: The Organization did not have an independent review occurring where it could maintain supporting documentation showing an independent review and approval was occurring prior to the financial reports being filed. Questioned costs: N/A Context: For 4 of 8 financial reports selected for testing did not have an independent review occurring so there could be evidence of an independent review occurring prior to the financial report being filed. Cause: Error by management in having the reports reviewed by someone other than the preparer. Effect: Incorrect or inaccurate reports could be filed if they are not reviewed prior to being filed. Repeat Finding: Repeat Finding of 2023-006. Recommendation: We recommend the Organization revise its internal controls to require an independent review of financial and performance reports prior to the reports being filed. The Organization should also ensure appropriate supporting documentation is maintained which shows the person who completed the review as well as the date the review was completed. Views of responsible officials: The Organization will ensure the grant reports are reviewed by a separate individual prior to submitting to funders and document those reviews accordingly.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2022-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: CFR § 200.329 indicates that the nonfederal entity is responsible for oversight of the operations of the Federal award supported activities. The nonfederal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Condition: The Organization did not have an independent review occurring where it could maintain supporting documentation showing an independent review and approval was occurring prior to the financial reports being filed. Questioned costs: N/A Context: For 4 of 8 financial reports selected for testing did not have an independent review occurring so there could be evidence of an independent review occurring prior to the financial report being filed. Cause: Error by management in having the reports reviewed by someone other than the preparer. Effect: Incorrect or inaccurate reports could be filed if they are not reviewed prior to being filed. Repeat Finding: Repeat Finding of 2023-006. Recommendation: We recommend the Organization revise its internal controls to require an independent review of financial and performance reports prior to the reports being filed. The Organization should also ensure appropriate supporting documentation is maintained which shows the person who completed the review as well as the date the review was completed. Views of responsible officials: The Organization will ensure the grant reports are reviewed by a separate individual prior to submitting to funders and document those reviews accordingly.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2022-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: CFR § 200.329 indicates that the nonfederal entity is responsible for oversight of the operations of the Federal award supported activities. The nonfederal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Condition: The Organization did not have an independent review occurring where it could maintain supporting documentation showing an independent review and approval was occurring prior to the financial reports being filed. Questioned costs: N/A Context: For 4 of 8 financial reports selected for testing did not have an independent review occurring so there could be evidence of an independent review occurring prior to the financial report being filed. Cause: Error by management in having the reports reviewed by someone other than the preparer. Effect: Incorrect or inaccurate reports could be filed if they are not reviewed prior to being filed. Repeat Finding: Repeat Finding of 2023-006. Recommendation: We recommend the Organization revise its internal controls to require an independent review of financial and performance reports prior to the reports being filed. The Organization should also ensure appropriate supporting documentation is maintained which shows the person who completed the review as well as the date the review was completed. Views of responsible officials: The Organization will ensure the grant reports are reviewed by a separate individual prior to submitting to funders and document those reviews accordingly.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2022-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: CFR § 200.329 indicates that the nonfederal entity is responsible for oversight of the operations of the Federal award supported activities. The nonfederal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Condition: The Organization did not have an independent review occurring where it could maintain supporting documentation showing an independent review and approval was occurring prior to the financial reports being filed. Questioned costs: N/A Context: For 4 of 8 financial reports selected for testing did not have an independent review occurring so there could be evidence of an independent review occurring prior to the financial report being filed. Cause: Error by management in having the reports reviewed by someone other than the preparer. Effect: Incorrect or inaccurate reports could be filed if they are not reviewed prior to being filed. Repeat Finding: Repeat Finding of 2023-006. Recommendation: We recommend the Organization revise its internal controls to require an independent review of financial and performance reports prior to the reports being filed. The Organization should also ensure appropriate supporting documentation is maintained which shows the person who completed the review as well as the date the review was completed. Views of responsible officials: The Organization will ensure the grant reports are reviewed by a separate individual prior to submitting to funders and document those reviews accordingly.
Condition: During our audit of the Abandoned Mine Land and Reclamation Program, we noted that the submission of the quarterly SF-425 Federal Financial Reports was not completed within 30 days after the reporting period end date. Context: The SF-425 Federal Financial Reports for the four quarters of fiscal year 2024 were not submitted by their respective deadlines of 30 days after the reporting period end date. All fiscal year 2024 reports were filed in April 2025. Criteria: 2 C.F.R. § 1000.10 gives regulatory effect to the Department of Treasury for 2 C.F.R. § 200.328, which establishes requirements over federal reporting, and states: Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB approved common information collections, as applicable, when providing financial and performance reporting information. 2 C.F.R. § 1000.10 gives regulatory effect to the Department of Treasury for 2 C.F.R. § 200.329(b), which establishes requirements over federal reporting, and states: Reporting program performance. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information. As appropriate and in accordance with above mentioned information collections, the Federal awarding agency must require the recipient to relate financial data and accomplishments to performance goals and objectives of the Federal award. Also, in accordance with above mentioned common information collections, and when required by the terms and conditions of the Federal award, recipients must provide cost information to demonstrate cost effective practices (e.g., through unit cost data). In some instances (e.g., discretionary research awards), this will be limited to the requirement to submit technical performance reports (to be evaluated in accordance with Federal awarding agency policy). Reporting requirements must be clearly articulated such that, where appropriate, performance during the execution of the Federal award has a standard against which non-Federal entity performance can be measured. It is management's responsibility to implement internal control procedures to reasonably ensure the federal reports they submit are accurate, complete, and in compliance with program requirements. It is imperative that management be able to provide the underlying data and related program documentation required to prepare and support these reports. The Town’s management is responsible for the preparation of the quarterly SF-425 Federal Financial Report, as required by 2 C.F.R. § 200.328. Questioned Costs: $0 Cause: The Town did not have adequate controls in place to ensure the quarterly SF-425 Federal Financial Reports, were submitted within 30 days after the reporting period end date. Effect: The SF-425 Federal Financial Reports were not submitted by their respective deadlines of 30 days after the reporting period end date. Recommendation: We recommend the Town review these regulations and comply with the provisions set forth therein. A policy should be established to ensure that each SF-425 Federal Financial Report is submitted by its due date of 30 days after the reporting period end date. Management should periodically review these procedures to ensure they are operating as intended. Response: Management stated they have established a policy to ensure each quarterly report is submitted by its due date.
CONDITION: The District did not properly record its federal program expenditures for the ESSER and ARP ESER federal grant programs using the various funding source expenditure codes as prescribed by the Chart of Accounts for PA Local Educational Agencies maintained by the PA Office of the Budget, Office of Comptroller Operations and well as Section 2 CFR 200.302(a) of the Uniform Guidance. This is a repeat finding from (2023-003) from the previous fiscal year. CRITERIA: The financial management system of the District must provide for 1) identification in it’s accounts, of all Federal awards received and expended and the Federal programs under which they were received, and 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 sections 200.328 and 200.329 of the Uniform Guidance. EFFECT: The District was not in compliance with the financial reporting requirements in the Chart of Accounts for PA Local Educational Agencies maintained by the PA Office of the Budget, Office of Comptroller Operations and well as Section 2 CFR 200.302(a) of the Uniform Guidance. CAUSE: The District experienced turnover in key business office personnel during the last three fiscal years, which resulted in errors in posting federal expenditures to the appropriate general ledger account codes. This further lead to inaccurate reporting as outlined above. QUESTIONED COST: None RECOMMENDATION: I recommend that the District properly follow the guidance contained within the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts for recording all expenditures of the District, most specifically, federal program grant expenditures to 1) enhance internal controls for tracking and monitoring federal program expenditures and 2) comply with the recordkeeping requirements for federal funds as specified in 2 CFR Part 200 of the Uniform Guidance and PDE regulations. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: The District did not properly record its federal program expenditures for the ESSER and ARP ESER federal grant programs using the various funding source expenditure codes as prescribed by the Chart of Accounts for PA Local Educational Agencies maintained by the PA Office of the Budget, Office of Comptroller Operations and well as Section 2 CFR 200.302(a) of the Uniform Guidance. This is a repeat finding from (2023-003) from the previous fiscal year. CRITERIA: The financial management system of the District must provide for 1) identification in it’s accounts, of all Federal awards received and expended and the Federal programs under which they were received, and 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 sections 200.328 and 200.329 of the Uniform Guidance. EFFECT: The District was not in compliance with the financial reporting requirements in the Chart of Accounts for PA Local Educational Agencies maintained by the PA Office of the Budget, Office of Comptroller Operations and well as Section 2 CFR 200.302(a) of the Uniform Guidance. CAUSE: The District experienced turnover in key business office personnel during the last three fiscal years, which resulted in errors in posting federal expenditures to the appropriate general ledger account codes. This further lead to inaccurate reporting as outlined above. QUESTIONED COST: None RECOMMENDATION: I recommend that the District properly follow the guidance contained within the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts for recording all expenditures of the District, most specifically, federal program grant expenditures to 1) enhance internal controls for tracking and monitoring federal program expenditures and 2) comply with the recordkeeping requirements for federal funds as specified in 2 CFR Part 200 of the Uniform Guidance and PDE regulations. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: The District did not properly record its federal program expenditures for the ESSER and ARP ESER federal grant programs using the various funding source expenditure codes as prescribed by the Chart of Accounts for PA Local Educational Agencies maintained by the PA Office of the Budget, Office of Comptroller Operations and well as Section 2 CFR 200.302(a) of the Uniform Guidance. This is a repeat finding from (2023-003) from the previous fiscal year. CRITERIA: The financial management system of the District must provide for 1) identification in it’s accounts, of all Federal awards received and expended and the Federal programs under which they were received, and 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 sections 200.328 and 200.329 of the Uniform Guidance. EFFECT: The District was not in compliance with the financial reporting requirements in the Chart of Accounts for PA Local Educational Agencies maintained by the PA Office of the Budget, Office of Comptroller Operations and well as Section 2 CFR 200.302(a) of the Uniform Guidance. CAUSE: The District experienced turnover in key business office personnel during the last three fiscal years, which resulted in errors in posting federal expenditures to the appropriate general ledger account codes. This further lead to inaccurate reporting as outlined above. QUESTIONED COST: None RECOMMENDATION: I recommend that the District properly follow the guidance contained within the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts for recording all expenditures of the District, most specifically, federal program grant expenditures to 1) enhance internal controls for tracking and monitoring federal program expenditures and 2) comply with the recordkeeping requirements for federal funds as specified in 2 CFR Part 200 of the Uniform Guidance and PDE regulations. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
Criteria or Specific Requirement: In accordance with 2 CFR 200.302(b)(4) and 2 CFR 200.329(a), nonfederal entities must establish internal controls to ensure accountability over federal funds and must monitor grant activities to ensure compliance with applicable requirements and achievement of performance goals. These responsibilities include assigning oversight roles and implementing processes to track both financial and programmatic aspects of federal awards. Condition and Context: During the audit, it was noted that Solvista Health did not have clearly defined roles and responsibilities for monitoring grant activities. It was difficult to determine who within the organization was responsible for overseeing compliance with grant requirements, tracking grant performance, and ensuring proper financial management of the grant funds. When asked, management was unable to identify designated individuals or a department currently accountable for these duties. Questioned Costs: N/A Cause: Solvista Health does not have an established formal grant management structure or assigned responsibility for grant oversight. Effect: Lack of properly designed and implemented internal controls, including policies and procedures relating to accountability and oversight of federal programs, may result in noncompliance with federal grant requirements under 2 CFR § 200.329 (monitoring and reporting program performance) and § 200.302 (financial management). Identification as a Repeat Finding: Not a repeat finding. Recommendation: Solvista Health should design and implement internal controls related to federal program grant management, including assignment of responsibility for grant oversight to specific individuals or departments. This will help ensure that Solvista Health is in compliance with federal regulations related to the monitoring and oversight of grant activities.
Criteria or Specific Requirement: In accordance with 2 CFR 200.302(b)(4) and 2 CFR 200.329(a), nonfederal entities must establish internal controls to ensure accountability over federal funds and must monitor grant activities to ensure compliance with applicable requirements and achievement of performance goals. These responsibilities include assigning oversight roles and implementing processes to track both financial and programmatic aspects of federal awards. Condition and Context: During the audit, it was noted that Solvista Health did not have clearly defined roles and responsibilities for monitoring grant activities. It was difficult to determine who within the organization was responsible for overseeing compliance with grant requirements, tracking grant performance, and ensuring proper financial management of the grant funds. When asked, management was unable to identify designated individuals or a department currently accountable for these duties. Questioned Costs: N/A Cause: Solvista Health does not have an established formal grant management structure or assigned responsibility for grant oversight. Effect: Lack of properly designed and implemented internal controls, including policies and procedures relating to accountability and oversight of federal programs, may result in noncompliance with federal grant requirements under 2 CFR § 200.329 (monitoring and reporting program performance) and § 200.302 (financial management). Identification as a Repeat Finding: Not a repeat finding. Recommendation: Solvista Health should design and implement internal controls related to federal program grant management, including assignment of responsibility for grant oversight to specific individuals or departments. This will help ensure that Solvista Health is in compliance with federal regulations related to the monitoring and oversight of grant activities.
Criteria or Specific Requirement: In accordance with 2 CFR 200.302(b)(4) and 2 CFR 200.329(a), nonfederal entities must establish internal controls to ensure accountability over federal funds and must monitor grant activities to ensure compliance with applicable requirements and achievement of performance goals. These responsibilities include assigning oversight roles and implementing processes to track both financial and programmatic aspects of federal awards. Condition and Context: During the audit, it was noted that Solvista Health did not have clearly defined roles and responsibilities for monitoring grant activities. It was difficult to determine who within the organization was responsible for overseeing compliance with grant requirements, tracking grant performance, and ensuring proper financial management of the grant funds. When asked, management was unable to identify designated individuals or a department currently accountable for these duties. Questioned Costs: N/A Cause: Solvista Health does not have an established formal grant management structure or assigned responsibility for grant oversight. Effect: Lack of properly designed and implemented internal controls, including policies and procedures relating to accountability and oversight of federal programs, may result in noncompliance with federal grant requirements under 2 CFR § 200.329 (monitoring and reporting program performance) and § 200.302 (financial management). Identification as a Repeat Finding: Not a repeat finding. Recommendation: Solvista Health should design and implement internal controls related to federal program grant management, including assignment of responsibility for grant oversight to specific individuals or departments. This will help ensure that Solvista Health is in compliance with federal regulations related to the monitoring and oversight of grant activities.
Criteria or Specific Requirement: In accordance with 2 CFR 200.302(b)(4) and 2 CFR 200.329(a), nonfederal entities must establish internal controls to ensure accountability over federal funds and must monitor grant activities to ensure compliance with applicable requirements and achievement of performance goals. These responsibilities include assigning oversight roles and implementing processes to track both financial and programmatic aspects of federal awards. Condition and Context: During the audit, it was noted that Solvista Health did not have clearly defined roles and responsibilities for monitoring grant activities. It was difficult to determine who within the organization was responsible for overseeing compliance with grant requirements, tracking grant performance, and ensuring proper financial management of the grant funds. When asked, management was unable to identify designated individuals or a department currently accountable for these duties. Questioned Costs: N/A Cause: Solvista Health does not have an established formal grant management structure or assigned responsibility for grant oversight. Effect: Lack of properly designed and implemented internal controls, including policies and procedures relating to accountability and oversight of federal programs, may result in noncompliance with federal grant requirements under 2 CFR § 200.329 (monitoring and reporting program performance) and § 200.302 (financial management). Identification as a Repeat Finding: Not a repeat finding. Recommendation: Solvista Health should design and implement internal controls related to federal program grant management, including assignment of responsibility for grant oversight to specific individuals or departments. This will help ensure that Solvista Health is in compliance with federal regulations related to the monitoring and oversight of grant activities.
2024‐005 Reporting (2023‐009) Reporting (Significant Deficiency) (Repeat/Modified) Federal Program Information: Funding Agency: Department of the Justice Title: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16.710 Compliance Requirement: Reporting Award Year: July 1, 2023 to June 30, 2024 Condition: During our audit, we noted that the City did not submit all of its quarterly financial reports and one progress report in a timely manner. The City did make progress in this finding. In prior year, the City did not submit the proper reports, however, this year, all 4 quarterly reports were submitted, however, 3 out of 4 were late. Criteria: The City must submit the federal financial reports 30 days after the end of the end of each quarter (2 CFR 200.329 section (c)(1). Effect: The City was not in compliance with the reporting requirement; the City did not submit information in a timely manner for three quarters of the fiscal year. Questioned Costs: None Cause: The City had turnover that handled this duty during the time that the reports were due to be submitted and so it was not completed until the end of the fiscal year. Auditors’ Recommendation: We recommend that the City ensure that it has more than one position responsible for submitting these quarterly and any progress reports to the federal government to ensure that they are always completed even if one position is vacant. Agency’s Response: The City of acknowledges the audit finding regarding the untimely submission of reporting for the Cops Hiring program. This was a result of turnover, and the new grant manager was not hired until the middle of fiscal year 2024. The Procurement officer, who manages grants, as well as the Finance Director, have prioritized compliance with federal reporting requirements. To prevent future occurrences, the Finance Department has implemented internal controls ensuring multiple staff members are responsible for federal reporting. Specifically, both the Finance Director and the Financial Analyst now share the responsibility and authority to complete and submit these annual reports. This new process ensures continuity in reporting, even in the event of staff turnover, and strengthens the City’s commitment to compliance with federal funding requirements. Additionally, the Finance Director oversees this responsibility so there are now multiple controls to ensure timely completion. Responsible Parties: The Director of Finance. Timeline: June 30, 2025
Condition: During the test of 100 % of projects, sixteen (16) projects, for the Coronavirus State and Local Fiscal Recovery Funds, the following noncompliance with the Reporting compliance requirement was noted: • The third quarter report was not submitted. • The fourth quarter report was not timely submitted. • Four (4) projects were coded as revenue loss and should have been coded to an administrative expense code. • Four (4) projects were coded as revenue loss and should have been coded as a subrecipient. • Two (2) projects were coded as a subrecipient and were not a subrecipient relationship. After the review of the quarterly reports, the following exceptions were noted: • The second quarter report was understated by $257,160. • Health Department reported cumulative total of $1,090,483 in expenditures; however, disbursements totaled $1,089,725. • Emergency Management reported cumulative total of $276,279 in expenditures; however, disbursements totaled $333,169. • Rogers County Sheriff reported cumulative total of $300,000 in expenditures; however, disbursements totaled $233,344. • The consultant hired by the county to administer the grant reported cumulative total of $251,427 in expenditures; however, disbursements totaled was $287,346. Jail Remodel had expenditures of $231,765; however, it was no expenditures were listed on the report. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are properly reported in accordance with federal compliance requirements. Effect of Condition: This condition resulted in noncompliance with federal grant guidelines. Recommendation: OSAI recommends the County gain an understanding of the requirements for this program and implement internal controls to ensure compliance with these requirements Management Response: Board of County Commissioners: The Board of County Commissioners is responsible for the overall fiscal concerns of the county. See OKLA. STAT. Title 19, § 345. The Board of County Commissioners, with the cooperation and participation of all elected officials, reviews, develops and implements policies and procedures to create a strong internal control environment. The Board of County Commissioners will work with all elected officials, the third-party administrator, and federal, state and local partners to develop policies, procedures, and internal controls designed to accurately track grants, including the application process, verification, oversight, and reporting of grant requirements. These policies and procedures will be designed to identify requirements for recipients and sub-recipients of grants, ensure accurate equipment and real property management, procurement, recipient and subrecipient monitoring and reporting. Further, policies will ensure a proper understanding of all grant requirements and compliance of the same. To assist in this process, the Board of County Commissioners engaged a third-party administrator to oversee the grant process, including application, eligibility, review, requirements, contracting, recipient tracking and oversight, and documentation and reporting. The Board of County Commissioners will work with the third-party administrator to ensure proper grant administration. Criteria: Accountability and stewardship should be overall goals in management’s accounting of federal funds. Internal controls should be designed to monitor compliance with laws and regulations pertaining to grant contracts. Title 2 CFR § 200.303(a) Internal Controls, reads as follows: The non-federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal 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). Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting) reads as follows: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlines in Part 2 of this guidance. Expenditures may be reported on a cash of accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, your organization needs to establish internal controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. Further, 2 CFR 200.329-Monitoring and reporting Program Performance (c)(1) reads as follows: (c)(1) 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. Intervals must be no less frequent than annually nor more frequent 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. Reports submitted annually by the non-Federal entity and/or pass-through entity 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. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report submitted by the non-Federal entity and/or pass-through entity must be due no later than 120 calendar gays after the period of performance end date. A subrecipient must submit to the pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. See also §200.344. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report.
2024-004 – Reporting Required by the Uniform Grant Guidance Finding Type. Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance (Reporting) Program. COVID-19 State and Local Fiscal Recovery Funds Cluster (CFDA# 21.027); U.S. Department of Treasury; Passed through State of Oregon Department of Administrative Services. Criteria. Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.328 through 200.329. Condition. The District did not submit quarterly reports in compliance with 2 CFR sections 200.328 through 200.329. Cause. The District did not submit quarterly reports in compliance with grant requirements as no internal controls were in place to ensure compliance was maintained. Effect. As a result of this condition, the District did not fully comply with 2 CFR Part 200. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend that the District establish internal controls associated with grant reporting requirements to ensure compliance is maintained. View of Responsible Officials. We agree with the recommendation and will develop procedures to comply with the Uniform Guidance applicable to grants
2024-002 Improve Oversight Over Reporting of Federal Awards (Material Weakness) Federal Agency: Department of the Treasury Cluster/Program: COVID-19 Coronavirus State and Local Fiscal Recovery Fund AL Number(s): 21.027 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Material Noncompliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement A non-federal entity is required to submit a performance report annually using a form or format authorized by OMB (2 CFR section 200.329) based on expenditures reported in the Town’s general ledger. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal pro¬gram. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of per¬forming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. 2024-002 Improve Oversight Over Reporting of Federal Awards (Material Weakness) (Continued) Condition and Context When comparing annual amounts reported to the Treasury to the actual Town expenses, we noted several expenses were omitted from the Treasury reports. Cause The Town has not established adequate procedures to ensure expenditures reported on the annual report agree with the Town’s general ledger. Effect or Potential Effect The Town is not in compliance with the Uniform Guidance requirements for reporting. Questioned Costs There are no questioned costs as a result of this finding, as these costs were allowable and did occur, but they were reported in the incorrect reporting period. Recommendation The Town should implement controls to ensure that reports are reconciled to the general ledger prior to submission. Views of Responsible Official Management agrees with the finding.
Finding 2024-003 Improper Revenue Recognition (Material Weakness) Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: Management is responsible for establishing and maintaining effective internal control over financial report-ing. Internal controls should allow management or employees in the normal course of performing their assigned func-tions to prevent or detect material misstatements in the financial reporting of all district funds. 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 our audit, it was noted that revenue from certain grant-funded programs was not accurately recog-nized between state and federal sources. Specifically: • Some payments of federal revenue was recorded as state revenue, and some payments of state revenue was rec-orded as federal revenue. • In some cases, revenue was not recognized in the correct reporting period. This caused under recognition of current year federal revenue, and grant reimbursement to be therefore to be claimed in duplicate. Cause: Lack of clear procedures for distinguishing and recording revenue streams for blended funding sources. Internal controls to prevent, detect and correct accounting entries for grant revenues were weak or nonexistent allowing errors in reporting of revenues, overclaiming of federal revenues, and distinguishing revenue between state and federal sources. The lack of timely recognition of revenues caused the overclaiming of Title I. The accounting records were retroactively revised during the audit, for federal award and other reporting purposes. Dis-trict management did not have sufficient training or monitoring policies to recognize and correct the deficiency during the fiscal year. Effect or Potential Effect: Not accurately recording transactions timely into the general ledger, may result in transac-tions not being properly reported in the district’s financial statements and the ability to rely on the general ledger for correct and timely information. This may cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Due to improper recording of financial activity, Title I grant revenues were overclaimed, and general ledger required adjustment for proper state and federal presentation of grant revenues for National School Lunch Program. Repeat of a Prior-Year Finding: No. Recommendation: We recommend that Willamina School District implement accounting staff training programs, and implement a standardized revenue recognition policy that clearly distinguishes between state and federal funding sources. Additionally, we recommend that a reconciliation process be established to ensure all federal, state and matching funds are recorded timely and accurately. District's Response: The District concurs with the recommendation. Corrective Action Plan: The District will provide training for staff in order to devise and implement appropriate poli-cies and procedures for accurately recording all financial transactions, including federal award revenues and expendi-tures. Additional internal control policies will be adopted and procedures implemented as on-going improvement efforts are made. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager
Finding 2024-003 Improper Revenue Recognition (Material Weakness) Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: Management is responsible for establishing and maintaining effective internal control over financial report-ing. Internal controls should allow management or employees in the normal course of performing their assigned func-tions to prevent or detect material misstatements in the financial reporting of all district funds. 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 our audit, it was noted that revenue from certain grant-funded programs was not accurately recog-nized between state and federal sources. Specifically: • Some payments of federal revenue was recorded as state revenue, and some payments of state revenue was rec-orded as federal revenue. • In some cases, revenue was not recognized in the correct reporting period. This caused under recognition of current year federal revenue, and grant reimbursement to be therefore to be claimed in duplicate. Cause: Lack of clear procedures for distinguishing and recording revenue streams for blended funding sources. Internal controls to prevent, detect and correct accounting entries for grant revenues were weak or nonexistent allowing errors in reporting of revenues, overclaiming of federal revenues, and distinguishing revenue between state and federal sources. The lack of timely recognition of revenues caused the overclaiming of Title I. The accounting records were retroactively revised during the audit, for federal award and other reporting purposes. Dis-trict management did not have sufficient training or monitoring policies to recognize and correct the deficiency during the fiscal year. Effect or Potential Effect: Not accurately recording transactions timely into the general ledger, may result in transac-tions not being properly reported in the district’s financial statements and the ability to rely on the general ledger for correct and timely information. This may cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Due to improper recording of financial activity, Title I grant revenues were overclaimed, and general ledger required adjustment for proper state and federal presentation of grant revenues for National School Lunch Program. Repeat of a Prior-Year Finding: No. Recommendation: We recommend that Willamina School District implement accounting staff training programs, and implement a standardized revenue recognition policy that clearly distinguishes between state and federal funding sources. Additionally, we recommend that a reconciliation process be established to ensure all federal, state and matching funds are recorded timely and accurately. District's Response: The District concurs with the recommendation. Corrective Action Plan: The District will provide training for staff in order to devise and implement appropriate poli-cies and procedures for accurately recording all financial transactions, including federal award revenues and expendi-tures. Additional internal control policies will be adopted and procedures implemented as on-going improvement efforts are made. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager
Finding 2024-003 Improper Revenue Recognition (Material Weakness) Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: Management is responsible for establishing and maintaining effective internal control over financial report-ing. Internal controls should allow management or employees in the normal course of performing their assigned func-tions to prevent or detect material misstatements in the financial reporting of all district funds. 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 our audit, it was noted that revenue from certain grant-funded programs was not accurately recog-nized between state and federal sources. Specifically: • Some payments of federal revenue was recorded as state revenue, and some payments of state revenue was rec-orded as federal revenue. • In some cases, revenue was not recognized in the correct reporting period. This caused under recognition of current year federal revenue, and grant reimbursement to be therefore to be claimed in duplicate. Cause: Lack of clear procedures for distinguishing and recording revenue streams for blended funding sources. Internal controls to prevent, detect and correct accounting entries for grant revenues were weak or nonexistent allowing errors in reporting of revenues, overclaiming of federal revenues, and distinguishing revenue between state and federal sources. The lack of timely recognition of revenues caused the overclaiming of Title I. The accounting records were retroactively revised during the audit, for federal award and other reporting purposes. Dis-trict management did not have sufficient training or monitoring policies to recognize and correct the deficiency during the fiscal year. Effect or Potential Effect: Not accurately recording transactions timely into the general ledger, may result in transac-tions not being properly reported in the district’s financial statements and the ability to rely on the general ledger for correct and timely information. This may cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Due to improper recording of financial activity, Title I grant revenues were overclaimed, and general ledger required adjustment for proper state and federal presentation of grant revenues for National School Lunch Program. Repeat of a Prior-Year Finding: No. Recommendation: We recommend that Willamina School District implement accounting staff training programs, and implement a standardized revenue recognition policy that clearly distinguishes between state and federal funding sources. Additionally, we recommend that a reconciliation process be established to ensure all federal, state and matching funds are recorded timely and accurately. District's Response: The District concurs with the recommendation. Corrective Action Plan: The District will provide training for staff in order to devise and implement appropriate poli-cies and procedures for accurately recording all financial transactions, including federal award revenues and expendi-tures. Additional internal control policies will be adopted and procedures implemented as on-going improvement efforts are made. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager
Finding 2024-003 Improper Revenue Recognition (Material Weakness) Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: Management is responsible for establishing and maintaining effective internal control over financial report-ing. Internal controls should allow management or employees in the normal course of performing their assigned func-tions to prevent or detect material misstatements in the financial reporting of all district funds. 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 our audit, it was noted that revenue from certain grant-funded programs was not accurately recog-nized between state and federal sources. Specifically: • Some payments of federal revenue was recorded as state revenue, and some payments of state revenue was rec-orded as federal revenue. • In some cases, revenue was not recognized in the correct reporting period. This caused under recognition of current year federal revenue, and grant reimbursement to be therefore to be claimed in duplicate. Cause: Lack of clear procedures for distinguishing and recording revenue streams for blended funding sources. Internal controls to prevent, detect and correct accounting entries for grant revenues were weak or nonexistent allowing errors in reporting of revenues, overclaiming of federal revenues, and distinguishing revenue between state and federal sources. The lack of timely recognition of revenues caused the overclaiming of Title I. The accounting records were retroactively revised during the audit, for federal award and other reporting purposes. Dis-trict management did not have sufficient training or monitoring policies to recognize and correct the deficiency during the fiscal year. Effect or Potential Effect: Not accurately recording transactions timely into the general ledger, may result in transac-tions not being properly reported in the district’s financial statements and the ability to rely on the general ledger for correct and timely information. This may cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Due to improper recording of financial activity, Title I grant revenues were overclaimed, and general ledger required adjustment for proper state and federal presentation of grant revenues for National School Lunch Program. Repeat of a Prior-Year Finding: No. Recommendation: We recommend that Willamina School District implement accounting staff training programs, and implement a standardized revenue recognition policy that clearly distinguishes between state and federal funding sources. Additionally, we recommend that a reconciliation process be established to ensure all federal, state and matching funds are recorded timely and accurately. District's Response: The District concurs with the recommendation. Corrective Action Plan: The District will provide training for staff in order to devise and implement appropriate poli-cies and procedures for accurately recording all financial transactions, including federal award revenues and expendi-tures. Additional internal control policies will be adopted and procedures implemented as on-going improvement efforts are made. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager
Finding 2024-003 Improper Revenue Recognition (Material Weakness) Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: Management is responsible for establishing and maintaining effective internal control over financial report-ing. Internal controls should allow management or employees in the normal course of performing their assigned func-tions to prevent or detect material misstatements in the financial reporting of all district funds. 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 our audit, it was noted that revenue from certain grant-funded programs was not accurately recog-nized between state and federal sources. Specifically: • Some payments of federal revenue was recorded as state revenue, and some payments of state revenue was rec-orded as federal revenue. • In some cases, revenue was not recognized in the correct reporting period. This caused under recognition of current year federal revenue, and grant reimbursement to be therefore to be claimed in duplicate. Cause: Lack of clear procedures for distinguishing and recording revenue streams for blended funding sources. Internal controls to prevent, detect and correct accounting entries for grant revenues were weak or nonexistent allowing errors in reporting of revenues, overclaiming of federal revenues, and distinguishing revenue between state and federal sources. The lack of timely recognition of revenues caused the overclaiming of Title I. The accounting records were retroactively revised during the audit, for federal award and other reporting purposes. Dis-trict management did not have sufficient training or monitoring policies to recognize and correct the deficiency during the fiscal year. Effect or Potential Effect: Not accurately recording transactions timely into the general ledger, may result in transac-tions not being properly reported in the district’s financial statements and the ability to rely on the general ledger for correct and timely information. This may cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Due to improper recording of financial activity, Title I grant revenues were overclaimed, and general ledger required adjustment for proper state and federal presentation of grant revenues for National School Lunch Program. Repeat of a Prior-Year Finding: No. Recommendation: We recommend that Willamina School District implement accounting staff training programs, and implement a standardized revenue recognition policy that clearly distinguishes between state and federal funding sources. Additionally, we recommend that a reconciliation process be established to ensure all federal, state and matching funds are recorded timely and accurately. District's Response: The District concurs with the recommendation. Corrective Action Plan: The District will provide training for staff in order to devise and implement appropriate poli-cies and procedures for accurately recording all financial transactions, including federal award revenues and expendi-tures. Additional internal control policies will be adopted and procedures implemented as on-going improvement efforts are made. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager
Finding 2024-003 Improper Revenue Recognition (Material Weakness) Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: Management is responsible for establishing and maintaining effective internal control over financial report-ing. Internal controls should allow management or employees in the normal course of performing their assigned func-tions to prevent or detect material misstatements in the financial reporting of all district funds. 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 our audit, it was noted that revenue from certain grant-funded programs was not accurately recog-nized between state and federal sources. Specifically: • Some payments of federal revenue was recorded as state revenue, and some payments of state revenue was rec-orded as federal revenue. • In some cases, revenue was not recognized in the correct reporting period. This caused under recognition of current year federal revenue, and grant reimbursement to be therefore to be claimed in duplicate. Cause: Lack of clear procedures for distinguishing and recording revenue streams for blended funding sources. Internal controls to prevent, detect and correct accounting entries for grant revenues were weak or nonexistent allowing errors in reporting of revenues, overclaiming of federal revenues, and distinguishing revenue between state and federal sources. The lack of timely recognition of revenues caused the overclaiming of Title I. The accounting records were retroactively revised during the audit, for federal award and other reporting purposes. Dis-trict management did not have sufficient training or monitoring policies to recognize and correct the deficiency during the fiscal year. Effect or Potential Effect: Not accurately recording transactions timely into the general ledger, may result in transac-tions not being properly reported in the district’s financial statements and the ability to rely on the general ledger for correct and timely information. This may cause misstatement of financial statements, and inappropriate reporting of federal awards. Questioned Cost: No Context: Due to improper recording of financial activity, Title I grant revenues were overclaimed, and general ledger required adjustment for proper state and federal presentation of grant revenues for National School Lunch Program. Repeat of a Prior-Year Finding: No. Recommendation: We recommend that Willamina School District implement accounting staff training programs, and implement a standardized revenue recognition policy that clearly distinguishes between state and federal funding sources. Additionally, we recommend that a reconciliation process be established to ensure all federal, state and matching funds are recorded timely and accurately. District's Response: The District concurs with the recommendation. Corrective Action Plan: The District will provide training for staff in order to devise and implement appropriate poli-cies and procedures for accurately recording all financial transactions, including federal award revenues and expendi-tures. Additional internal control policies will be adopted and procedures implemented as on-going improvement efforts are made. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager
Condition: Expenditures for federal programs were not adequately reported on the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Compliance Reports. Federal expenditures were understated by $1,227,550. The actual expenditures to vendors were $1,272,002, the County reported $44,452. Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance with reporting compliance requirements. Effect of Condition: This condition could result in noncompliance to grant requirements and could result in unrecorded transactions, undetected errors, and misappropriation of assets and funds.Recommendation: OSAI recommends the County gain an understanding of the grant requirements for this program and implement internal controls to ensure compliance with these grant requirements. Management Response: Chairman of the Board of County Commissioners: I plan to communicate with the Budget Board regarding this finding and have already introduced to the Budget Board, a form guideline called “Payne County Grant Administration Plan” to aid in proper documentation, reporting and proper spending of all grant awards. I plan to discuss all findings with the Budget Board throughout the year during our Budget Board meetings to get updates on how the findings are actively being addressed by each department and get input on how to best combat future findings. I request that responses by the various departments be forwarded to me to ensure action is taken and for discussion during the meetings. Criteria: 2 CFR § 200.303 Internal Controls (a) reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting.) reads as follows: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, you organization needs to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. Further, 2 CFR § 200.329 Monitoring and Reporting Program Performance (c)(1) reads as follows: 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. Intervals must be no less frequent than annually nor more frequent 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. Reports submitted annually by the non-Federal entity and/or pass-through entity 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. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report submitted by the non-Federal entity and/or pass-through entity must be due no later than 120 calendar days after the period of performance end date. A subrecipient must submit to the pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. See also § 200.344. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report.
Finding 2024-002 – U.S. Department of Education (USDE) Higher Education Emergency Relief Fund (HEERF) Programs (significant deficiency): Information on the Federal Programs – HEERF Historically Black Colleges and Universities (HBCU), 18004(a)(2), FAL No. 84.425J, June 30, 2024. Criteria – Federal regulations: CARES Act 18004(e), CRRSAA 314(e), 2 CFR 200.328, 2 CFR 200.329, 34 CFR 75.720(b). Condition – Non-compliance noted regarding untimely filing of quarterly and annual report. Questioned Costs – Noted within each finding below. Context – We noted the following in connection with our testing of compliance: a) Our review of the required quarterly and annual report submissions revealed the College failed to submit the annual performance report, and one (1) quarterly report was submitted untimely. Cause – Administrative oversight. Effect – Reporting deadlines were missed. Repeat Finding – No. Auditor’s Recommendation – The College should strengthen controls and oversight over grant reporting to assure that all reporting requirements are being met accurately and timely. Views of Responsible Officials – The HEERF department and reporting systems were closed, and Grants personnel were unable to retrieve a copy of the required reports from the ESF Data Collection System by the suggested deadline of May 19, 2025. A reporting calendar was implemented in August 2025 along with other policies and procedures outlined in the corrective action plan attached. All future reports will be submitted timely under this protocol.
Condition and Context Bebashi failed to maintain an accurate trial balance and general ledger to support certain account balances resulting in auditor journal entries at year-end which were material to the current year financial statements and audit delays due to support not reconciling and multiple versions of the trial balance being provided. Criteria Accounting principles generally accepted in the United States of America and Government Auditing Standards require that the design or operation of internal control over financial reporting should allow management or employees in the normal course of performing their assigned functions to prevent, or detect and correct, misstatements on a timely basis. 2 CFR 200.303 states, “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework,’ issued by the Committee of Sponsoring Organizations of the Treadway Commission.” 2 CFR 200.302 states, “The financial management system of each non-Federal entity must provide for the following… accurate, current, and complete disclosure of each Federal award or program in accordance with the reporting requirements set forth in sections 200.328 and 200.329.” Cause As a result of financial constraints, and corresponding staffing challenges, the accounting and finance team at Bebashi was unable to prepare its accounting records on a timely and thorough basis. At the same time, the accounting and finance team was faced with other administrative and operational matters requiring immediate attention to help ensure Bebashi remained operational. The financial and staffing constraints resulted in lack of timely preparation and detailed review of accounting records and analysis which resulted in material audit adjustments. Effect or Potential Effect The accounting records of certain account balances and transactions provided to the auditors were inaccurate for a period of time during the fiscal year and for the year ended June 30, 2024. In certain instances, the related reconciliations and analysis were not performed on a timely basis. This caused adjustments proposed by the auditors that were material to the financial statements. Recommendation We recommend that management implements a more detailed and adequate review of the accounting records including strong processes and internal controls surrounding financial reporting. This process should identify the required accounting records and reconciliations, ensure the existence of preparer and reviewer requirements for the accounting records and reconciliations, and implement an appropriate time frame for the completion of accounting records and reconciliations. We recommend that management implements processes and procedures to identify the required financial reporting deadlines and controls to ensure compliance with the deadlines. Views of Responsible Officials Management agrees with the finding above. Management will review the existing accounting policies and procedures and implement additional steps and controls to incorporate the recommendations above. Subsequent to year-end, management of Bebashi hired a new Director of Finance. Management will review the operational resources available to further expand the finance team and do so accordingly.
2024-006 Performance Reporting Deadlines Compliance Requirement Reporting Category Significant Deficiency in Internal Control and Noncompliance ALN 12.607 Program Community Economic Adjustment of Establishment, Expansion, Realignment, or Closure of a Military Installation Federal Agency US Department of Defense Criteria Per 2 CFR § 200.328 and 2 CFR § 200.329, non-federal entities must submit performance and financial reports as required by the federal awarding agency or pass-through entity. These reports must be accurate, complete, and submitted timely, as outlined in the terms and conditions of the award. Condition The Authority failed to submit required federal reports in accordance with the deadlines established in the Notice of Award, with an average delay of approximately 146 days. Specifically, the Quarterly Performance Reports, Final Performance Report, and Federal Financial Report (FFR) were submitted after their respective due dates, resulting in noncompliance with federal reporting requirements. Cause The Authority did not implement adequate tracking and oversight mechanisms to ensure timely submission of required reports. This may reflect deficiencies in internal controls related to grant management and compliance monitoring. Effect Late submission of federally required reports hinders the ability of the awarding agency and pass-through entity to monitor project progress, assess financial accountability, and ensure compliance with grant terms. Continued noncompliance may result in administrative actions, including restrictions on future funding. Questioned Costs None Repeat Finding Disclosure This finding was reported in the prior year’s Single Audit and was marked as corrected. However, based on current audit procedures and documentation reviewed, the corrective action was not effectively implemented, and the condition persists. Therefore, this finding is considered repeated and unresolved. Refer to item 2022-001. Recommendation The Authority should strengthen its internal controls over grant reporting by assigning clear responsibilities for the preparation and timely submission of required reports. Additionally, relevant personnel should receive training on federal reporting requirements to ensure ongoing compliance. Views of Responsible Official (Unaudited) Refer to Corrective Action Plan
Finding 2024-014 – Noncompliance with Reporting Requirements Over Federal Grant – Coronavirus State and Local Fiscal Recovery Fund (Repeat Finding – 2022-0014, 2023-0014) PASS THROUGH GRANTOR: Direct Grant FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $0 Condition: In the review of forty-seven (47) expenditures for federal programs, eleven (11) instances were noted where the expenditures were not correctly reported on the Coronavirus State and Local Fiscal Recovery Funds compliance reports. The expenditures were not reported in the correct quarter. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are properly reported in accordance with federal compliance requirements. Effect of Condition: This condition resulted in noncompliance with grant requirements. Recommendation: OSAI recommends the County design and implement a system of internal controls to ensure the accuracy and completeness of information submitted. Management Response: Chairman of the Board of County Commissioners: The Board of County Commissioners have hired a grant administrator to assist with the reporting process. We will ensure that the reports are accurate and reported in the proper period. Criteria: GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part: Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. 2 CFR § 200.303(a) Internal Controls reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Additionally, Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting.) reads as follows: 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, you organization needs to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. Further, 2 CFR § 200.329 Monitoring and Reporting Program Performance (c)(1) reads as follows: 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. Intervals must be no less frequent than annually nor more frequent 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. Reports submitted annually by the non-Federal entity and/or pass-through entity 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. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report submitted by the non-Federal entity and/or pass-through entity must be due no later than 120 calendar days after the period of performance end date. A subrecipient must submit to the pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. See also § 200.344. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report.
Finding 2024-013 – Noncompliance with Reporting Requirements Over Federal Grant Coronavirus State and Local Fiscal Recovery Funds (Repeat Finding – 2022-013, 2023-013) PASS-THROUGH GRANTOR: Direct Grant FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $-0- Condition: The County has not established internal controls to ensure the correct expenditure category is used for reporting payments to the grant administrative contractor. The quarterly reports improperly classified payments totaling $29,578 to a contractor as a ‘Revenue Replacement’ expense instead of using the ‘Administrative’ expense category. Also, the quarterly reports improperly classified payments totaling $513,944 for the Resurrection House as a ‘Revenue Replacement’ expense instead of using the ‘Negative Economic Impact’ expense category as stated in the agreement with the Board of County Commissioners. This entity was also not reflected as a Beneficiary in the quarterly reports. Further, subrecipient agreements for the following pass-through entities were signed and approved by the Board of County Commissioners; however, the entities were not reported as subrecipients in the quarterly reports: • Town of Rush Springs • Grady County Rural Water #6 • Grady County Rural Water #7 • City of Chickasha • City of Minco Additionally, the expense category listed in the quarterly reports differs from the expense category listed in the subrecipient agreements for the following entities: • City of Chickasha • City of Minco Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements. Effect of Condition: This condition could result in noncompliance to grant requirements. Recommendation: OSAI recommends the County gain an understanding of the requirements for this program and implement internal controls to ensure compliance with these requirements. Management Response: Chairman of the Board of County Commissioners: The Board of County Commissioners will take measures to ensure future compliance with all requirements of federal grants. Criteria: Accountability and stewardship should be overall goals in management’s accounting of federal funds. Internal controls should be designed to monitor compliance with laws and regulations pertaining to grant contracts. Title 2 CFR § 200.303(a) Internal Controls reads (a) reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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 Controls Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting.) reads as follows: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, your organization needs to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. Further, 2 CFR § 200.329 Monitoring and Reporting Program Performance (c)(1) reads as follows: 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. Intervals must be no less frequent than annually nor more frequent 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. Reports submitted annually by the non-Federal entity and/or pass-through entity 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. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report submitted by the non-Federal entity and/or pass-through entity must be due no later than 120 calendar days after the period of performance end date. A subrecipient must submit to the pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. See also § 200.344. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report.
2024-002 – Reporting Federal Program Information: US Department of the Treasury, passed through State of Maine Efficiency Maine CFDA -21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria: The following CFR(s) apply to this finding: 2 CFR 200.329 Condition: During audit procedures it was identified that the Town could not provide report documentation for the performance reporting requirements of 2 CFR 200.329. Cause: The Town does not have sufficient internal controls to ensure compliance with reporting requirements. Effect: Required performance expectations may not have been met, unallowable activities may have occurred, resulting in noncompliance. Identification of Questioned Costs: No known Questioned Costs. Context: Quarterly performance reports were required in the grant award. The Town could not provide reports for testing. Repeat Finding: This is not repeat finding. Recommendation: It is recommended that the Town implement internal control processes and procedures to ensure that federal reporting requirements are met. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan.
2024-002 – Reporting Federal Program Information: US Department of the Treasury, passed through State of Maine Efficiency Maine CFDA -21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria: The following CFR(s) apply to this finding: 2 CFR 200.329 Condition: During audit procedures it was identified that the Town could not provide report documentation for the performance reporting requirements of 2 CFR 200.329. Cause: The Town does not have sufficient internal controls to ensure compliance with reporting requirements. Effect: Required performance expectations may not have been met, unallowable activities may have occurred, resulting in noncompliance. Identification of Questioned Costs: No known Questioned Costs. Context: Quarterly performance reports were required in the grant award. The Town could not provide reports for testing. Repeat Finding: This is not repeat finding. Recommendation: It is recommended that the Town implement internal control processes and procedures to ensure that federal reporting requirements are met. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan.
Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing No. 21.027 U.S. Department of Treasury Missouri Primary Care Association Criteria or specific requirement – Reporting (2 CFR 200.329) Condition – The Organization’s internal controls over compliance were not able to ensure progress reporting required to be submitted to the pass-through entity was completed timely. Cause – The Organization does not have internal controls over compliance in place to ensure all grant reporting requirements are satisfied timely. Effect or potential effect – The Organization did not submit the required quarterly and annual performance reports in a timely manner. Questioned costs – None Context – The Organization is required to submit quarterly status reports and an annual performance report to the pass-through entity in a timely manner. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should consider implementing a grant reporting calendar for all grants with reporting requirements. Views of responsible officials and planned corrective actions – Our quarterly status progress report was inadvertently sent two days past the due date in to our state office. We have corrected this by implementing controls by placing the quarterly due dates on our calendars so these due dates are no longer overlooked going forward.
Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing No. 21.027 U.S. Department of Treasury Missouri Primary Care Association Criteria or specific requirement – Reporting (2 CFR 200.329) Condition – The Organization’s internal controls over compliance were not able to ensure progress reporting required to be submitted to the pass-through entity was completed timely. Cause – The Organization does not have internal controls over compliance in place to ensure all grant reporting requirements are satisfied timely. Effect or potential effect – The Organization did not submit the required quarterly and annual performance reports in a timely manner. Questioned costs – None Context – The Organization is required to submit quarterly status reports and an annual performance report to the pass-through entity in a timely manner. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should consider implementing a grant reporting calendar for all grants with reporting requirements. Views of responsible officials and planned corrective actions – Our quarterly status progress report was inadvertently sent two days past the due date in to our state office. We have corrected this by implementing controls by placing the quarterly due dates on our calendars so these due dates are no longer overlooked going forward.
Assistance Listing, Federal Agency, and Program Name - 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - According to 2 CFR section 200.329, entities are required to submit performance reports. Management is responsible for ensuring expenses are allowable and for the accuracy of the reports submitted. Condition - Controls in place were not adequate to ensure expenses were allowable and reported in the proper categories on the performance reports. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During reporting testing, we noted certain expenses were reported in incorrect categories. During our review of the report submitted for the period of October through December 2023, we noted $531,349 of premium pay costs were included in category 4.1, Public Sector Employees, but should have been included in category 6.1, Provision of Government Services, since premium pay is no longer an allowable expense in category 4.1. Cause and Effect - While the Charter Township did have controls in place around reporting and allowability of expenses, they were not sufficient to ensure expenses were properly recorded on the report in line with changing requirements under the terms of the grant. As a result, reports were not in compliance. Recommendation - We recommend the Charter Township ensure the effectiveness of controls to ensure expenditures get reported properly. Views of Responsible Officials and Corrective Action Plan - The Charter Township agrees with the findings. The Charter Township's management will ensure procedures are put into place to ensure expenditures are reported under the correct categories.
Assistance Listing, Federal Agency, and Program Name - 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - According to 2 CFR section 200.329, entities are required to submit performance reports. Management is responsible for ensuring expenses are allowable and for the accuracy of the reports submitted. Condition - Controls in place were not adequate to ensure expenses were allowable and reported in the proper categories on the performance reports. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During reporting testing, we noted certain expenses were reported in incorrect categories. During our review of the report submitted for the period of October through December 2023, we noted $531,349 of premium pay costs were included in category 4.1, Public Sector Employees, but should have been included in category 6.1, Provision of Government Services, since premium pay is no longer an allowable expense in category 4.1. Cause and Effect - While the Charter Township did have controls in place around reporting and allowability of expenses, they were not sufficient to ensure expenses were properly recorded on the report in line with changing requirements under the terms of the grant. As a result, reports were not in compliance. Recommendation - We recommend the Charter Township ensure the effectiveness of controls to ensure expenditures get reported properly. Views of Responsible Officials and Corrective Action Plan - The Charter Township agrees with the findings. The Charter Township's management will ensure procedures are put into place to ensure expenditures are reported under the correct categories.
FINDING 2023-003 Assistance Listing Number 21.023 COVID-19 Emergency Rental Assistance Program Federal Agency U.S. Department of Treasury Pass-through Agency Not applicable Award Numbers / Years ERA2 City Department Department of Housing (DOH) Criteria: Under the requirements of 2CFR 200.329, 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. The U.S. Treasury requires program performance reports to be filed quarterly. Condition/Context: Two out of the four quarterly ERA Compliance reports were sampled. It was noted that DOH did not file the second quarter report on a timely basis. The portal did not allow a report to be filed after the due date. The sample was not statistically valid. Effect: DOH was not in compliance with the reporting guidelines for the program. Questioned Costs: Not applicable. Cause: DOH did not have a process put in place to ensure that each required quarterly performance report was filed by the deadline. Recommendation: We recommend that DOH review its reporting process to ensure that reports are filed in a timely basis. Views of Responsible Officials: See Corrective Action Plan.
FINDING 2023-003 Assistance Listing Number 21.023 COVID-19 Emergency Rental Assistance Program Federal Agency U.S. Department of Treasury Pass-through Agency Not applicable Award Numbers / Years ERA2 City Department Department of Housing (DOH) Criteria: Under the requirements of 2CFR 200.329, 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. The U.S. Treasury requires program performance reports to be filed quarterly. Condition/Context: Two out of the four quarterly ERA Compliance reports were sampled. It was noted that DOH did not file the second quarter report on a timely basis. The portal did not allow a report to be filed after the due date. The sample was not statistically valid. Effect: DOH was not in compliance with the reporting guidelines for the program. Questioned Costs: Not applicable. Cause: DOH did not have a process put in place to ensure that each required quarterly performance report was filed by the deadline. Recommendation: We recommend that DOH review its reporting process to ensure that reports are filed in a timely basis. Views of Responsible Officials: See Corrective Action Plan.
Federal Agency: U.S. Small Business Administration Federal Program: Microloan Program Assistance Listing Numbers: 59.046 Federal Award Identification Number and Year: SBAOCAML220344– 2022 SBACAML230551 – 2023 Award Period: January 1, 2023 – December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance - Other Matter Criteria or Specific Requirement: Federal regulations require submission of performance reports at an interval required by the federal awarding agency. Those reports submitted quarterly must be due no later than 30 calendar days after the reporting period. These requirements are outlined in 2 CFR 200.329(c) Monitoring and reporting program performance. Condition: During our testing, we tested two quarterly performance reports and it was noted both were submitted after the required due date outlined in the grant agreement. Questioned Costs: None Context: During our testing, it was noted the Organization did not have proper procedures in place for ensuring timely submission of the quarterly performance reports as required in the federal fund notice of awards. Cause: Management did not have a system in place to ensure the completion and submission of the required performance reporting by the specified due date. Effect: By submitting untimely performance reports, the Organization is not in compliance with the terms and conditions of the award. This did not result in any disallowed costs. Repeat Finding: Yes Recommendation: We recommend management develop procedures to ensure the required reporting is completed within the timeline allowed by the granting agency. Views of Responsible Officials: Management agrees with finding.
Federal Agency: U.S. Small Business Administration Federal Program: Microloan Program Assistance Listing Numbers: 59.046 Federal Award Identification Number and Year: SBAOCAML220344– 2022 SBACAML230551 – 2023 Award Period: January 1, 2023 – December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance - Other Matter Criteria or Specific Requirement: Federal regulations require submission of performance reports at an interval required by the federal awarding agency. Those reports submitted quarterly must be due no later than 30 calendar days after the reporting period. These requirements are outlined in 2 CFR 200.329(c) Monitoring and reporting program performance. Condition: During our testing, we tested two quarterly performance reports and it was noted both were submitted after the required due date outlined in the grant agreement. Questioned Costs: None Context: During our testing, it was noted the Organization did not have proper procedures in place for ensuring timely submission of the quarterly performance reports as required in the federal fund notice of awards. Cause: Management did not have a system in place to ensure the completion and submission of the required performance reporting by the specified due date. Effect: By submitting untimely performance reports, the Organization is not in compliance with the terms and conditions of the award. This did not result in any disallowed costs. Repeat Finding: Yes Recommendation: We recommend management develop procedures to ensure the required reporting is completed within the timeline allowed by the granting agency. Views of Responsible Officials: Management agrees with finding.
Recipients must use the standard financial reporting forms or such other forms as may be authorized by OMB (approval is indicated by an OMB paperwork control number on the form) when reporting to the Federal awarding agency. Each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the Federal awarding agency. The standard financial reporting forms for grants and cooperative agreements for the Emergency Rental Assistance program are as follows: Federal Financial Report (FFR) (SF-425/SF-425A) (OMB No. 0348-0061). Recipients use the FFR as a standardized format to report expenditures under Federal awards, as well as, when applicable, cash status (lines 10.a, 10.b, and 10c). References to this report include its applicability as both an expenditure and a cash status report unless otherwise indicated. Non-Federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR 200.329(c)(1)). They also may be required to submit special reports as required by the terms and conditions of the Federal award. During testing we noted reported expenditures per quarter did not agree with supporting invoices paid by the County. Additionally, beginning with the second quarter report 2023, key line items which included area demographics were not included in the reports provided. By not properly filing the required reports, the County is in noncompliance with the requirements set forth by the U.S. Department of Treasury. This could result in the Treasury not fully being aware of how the County is utilizing the funding in determining if the County is following other requirements and using the funding properly. We recommend the County add additional procedures or controls to ensure all components of reporting federal expenditures are accurately reported.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): ILBC-2023-Body Camera-00052 Pass-Through Entity: Indiana Department of Homeland Security Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 KOSCIUSKO COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County Sheriff applied for the Indiana Local Body Camera Grant (ILBC). The grant is a reimbursable grant through the Indiana Department of Homeland Security. The County Sheriff was awarded this grant on January 1, 2023, with a grant cost amount of up to $31,920 to be spent from January 1, 2023 to December 31, 2023. The County Sheriff ordered body-worn cameras and other equipment on April 26, 2023. A Reimbursement Claim Form (Form) was submitted for the cameras and other equipment on September 11, 2023. The Form shows the County Sheriff requested the full $31,920; however, the County had only spent $9,581 from the grant fund towards the purchase. The reimbursement of $31,920 from the Indiana Department of Homeland Security was received on September 27, 2023. The fund had a balance of $22,339 as of December 31, 2023. As there are no grant expenditures for the remaining reimbursements received and the period of performance had ended, the County should have reimbursed the Indiana Department of Homeland Security $22,339. On May 9, 2023, the County Sheriff's grant administrator submitted a Program Report for the ILBC grant. The report was completed and submitted by the County Sheriff's grant administrator without a documented oversight or review process to ensure the completeness and accuracy of the report. The report incorrectly indicated that all expenditures had been completed. However, as of the date of the submission, the County had not purchased the body-worn cameras, and all federal funds had not been expended. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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." INDIANA STATE BOARD OF ACCOUNTS 14 KOSCIUSKO COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.344(d) states in part: "The non-Federal entity must promptly refund any balances of unobligated cash that the Federal awarding agency or pass-through entity paid in advance or paid and that are not authorized to be retained by the non-Federal entity for use in other projects. . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not designed by management of the County to ensure the accuracy of the reimbursement invoice and the Program Report. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County'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 design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, federal reimbursement was requested in excess of the amount spent. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure reimbursement invoices are complete and accurate prior to submission. Furthermore, we recommended the County contact the awarding agency to discuss the funds remaining. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19: Coronavirus State and Local Fiscal Recovery Funds - Body Camera - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 71391 Pass-Through Entity: Indiana Department of Homeland Security Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The City 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. Recipients were required to submit quarterly progress reports to the Indiana Department of Homeland Security. Information to be reported included progress or performance on the project for the appropriate reporting period. The City should have submitted two progress reports during the audit period since the grant agreement was signed on March 3, 2023, and a final quarterly report. The final quarterly report was submitted on October 30, 2023. However, the City only submitted one progress report which was prepared and submitted by a single employee without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the quarterly reports that were not submitted. 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 20 CITY OF MICHIGAN CITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.329(c) states: "Non-construction performance reports. The Federal awarding agency must use standard, governmentwide OMB-approved data elements for collection of performance information including performance progress reports, Research Performance Progress Reports. (1) 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. Intervals must be no less frequent than annually nor more frequent 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. Reports submitted annually by the non- Federal entity and/or pass-through entity 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. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report submitted by the non-Federal entity and/or pass-through entity must be due no later than 120 calendar days after the period of performance end date. A subrecipient must submit to the pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report. (2) As appropriate in accordance with above mentioned performance reporting, these reports will contain, for each Federal award, brief information on the following unless other data elements are approved by OMB in the agency information collection request: (i) A comparison of actual accomplishments to the objectives of the Federal award established for the period. Where the accomplishments of the Federal award can be quantified, a computation of the cost (for example, related to units of accomplishment) may be required if that information will be useful. Where performance trend data and analysis would be informative to the Federal awarding agency program, the Federal awarding agency should include this as a performance reporting requirement. (ii) The reasons why established goals were not met, if appropriate. (iii) Additional pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs." The Grant Agreement states in part: "The Subrecipient shall submit to the State written progress reports until completion of the project. These reports shall be submitted on a quarterly basis and shall contain such detail of progress or performance on the Project or as requested by the State." Cause Management had not developed a system of internal controls that would have prevented or detected and allowed for correction of material noncompliance. The City did not complete and submit quarterly reports as required because the officials were unaware of the requirement. INDIANA STATE BOARD OF ACCOUNTS 21 CITY OF MICHIGAN CITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper design or implementation of the components of a system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, noncompliance. As such, not all the required reports were not submitted. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City design and implement a proper system of internal controls, including policies and procedures to ensure the City completes and submits all required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-006 Subject: COVID-19: Coronavirus State and Local Fiscal Recovery Funds - US 12 Stormwater Drainage Improvement Project - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Number and Year (or Other Identifying Number): TRSW222046 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The City 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. Recipients were required to submit quarterly expenditure reports and a final report to the Indiana Finance Authority. Information to be reported included the expenditures of the grant and the status on the project for the appropriate reporting period. The City should have submitted four expenditure reports and a final report since the grant agreement was signed on February 25, 2022. However, the City only submitted one expenditure report for the fourth quarter and a final report. In addition, a single employee prepared and submitted the progress report without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the missing reports noted above. 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 200.329(c) states: "Non-construction performance reports. The Federal awarding agency must use standard, governmentwide OMB-approved data elements for collection of performance information including performance progress reports, Research Performance Progress Reports. INDIANA STATE BOARD OF ACCOUNTS 24 CITY OF MICHIGAN CITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) 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. Intervals must be no less frequent than annually nor more frequent 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. Reports submitted annually by the non- Federal entity and/or pass-through entity 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. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report submitted by the non-Federal entity and/or pass-through entity must be due no later than 120 calendar days after the period of performance end date. A subrecipient must submit to the pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report. (2) As appropriate in accordance with above mentioned performance reporting, these reports will contain, for each Federal award, brief information on the following unless other data elements are approved by OMB in the agency information collection request: (i) A comparison of actual accomplishments to the objectives of the Federal award established for the period. Where the accomplishments of the Federal award can be quantified, a computation of the cost (for example, related to units of accomplishment) may be required if that information will be useful. Where performance trend data and analysis would be informative to the Federal awarding agency program, the Federal awarding agency should include this as a performance reporting requirement. (ii) The reasons why established goals were not met, if appropriate. (iii) Additional pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs." The Grant Agreement states in part: "The Participant will report to the Finance Authority on the Participant's expenditure of the Grant and the status of the Project on the first day of each quarter following the date of this Agreement, and on the first day of every quarter thereafter until the Participant extends all the Grant funds and completes the Project, whichever is later. At the time the Participant completes the Project, the Participant will provide promptly to the Finance Authority a final report (the "Final Report"). All reports to the Finance Authority will be in form and substance satisfactory to the Finance Authority and as may be required by the United States Department of Treasury . . ." Cause Management had not developed a system of internal controls that would have prevented or detected and allowed for correction of material noncompliance. The City did not complete and submit quarterly reports as required because the officials were unaware of the requirement. INDIANA STATE BOARD OF ACCOUNTS 25 CITY OF MICHIGAN CITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Without the proper design or implementation of the components of a system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, noncompliance. As such, not all the required reports were not submitted. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City design and implement a proper system of internal controls, including policies and procedures, to ensure the City completes and submits all required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-004 Assistance Listing Number: 21.023 Program Title: COVID-19 Emergency Rental Assistance (ERA) Award Number / Year: 1505-0270 / 2023 Federal Agency: U.S. Department of Treasury Pass-Through Entity: Not applicable Criteria: 2 CFR Part 200.329(b) and ERA Reporting Guidance requires quarterly reporting to the Treasury portal contain all expenditures and obligations to be clearly identified by type including subawards, contracts, direct payments, or beneficiaries. The required information includes identification of subrecipients which are entities that receive a subaward from a recipient to carry out the purposes (program or project) of the ERA award on behalf of the recipient. Subrecipient relationships require additional monitoring and compliance steps. The direct recipient (the County) is responsible for determining if an entity is considered to be a subrecipient. Condition/Context: Both of the two reports selected for testing contained a contractor that was incorrectly reported as a subaward. Our sample was not statistically valid. Cause: The County did not have internal controls in place requiring an independent person with an understanding of the subrecipient terminology and classification to review the report prior to submission to the U.S. Department of Treasury. Effect: The report was submitted with subrecipient misclassifications. Questioned Costs: None noted. Recommendation: The County should review its internal control procedures to ensure there are proper review and approval processes in place over completeness and accuracy of reports before submissions to federal agencies are completed. Management's Response: Effective with the 2024 third quarter reporting, the contractor incorrectly reported as a subaward with Treasury was corrected.
#2023-008 – Major Federal Award Finding – Reporting Nature of Finding: Material Weakness in Internal Controls Over Compliance This is a partial repeat of prior year finding #2022-009. Criteria/Condition: Federal regulations 2 CFR 200.328 - 200.329 provide that required reporting under the federal program must be completed timely and accurately. The federal award agreement includes specific report filing due dates. Segregation of duties is also a key element of internal controls, including controls over compliance, and involves processes whereby the activities of one employee are reviewed or checked by the activities of another individual, and avoids one employee having the ability to perform a transaction or process from beginning to end. We noted during testing that no review procedures are in place surrounding these reports. Cause/Context: Controls were not in place to ensure accurate reporting. Only one individual was involved in the reporting process. Effect: Controls in place do not sufficiently ensure complete, accurate, and timely reporting compliance. Recommendation: We recommend that a full-range of controls related to reporting, including federal program reporting be implemented. The Organization should devote the resources necessary to ensure that reports are timely and accurately prepared, reviewed, and approved prior to filing. All controls, including review and approval should be documented and that documentation be maintained. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a full – range of controls relating to reporting, including federal program reporting. MARR will take such steps as necessary to ensure that reports are timely and accurately prepared, reviewed, and approved prior to filing. All controls, including review and approval will be documented in such documentation to be maintained.
#2023-008 – Major Federal Award Finding – Reporting Nature of Finding: Material Weakness in Internal Controls Over Compliance This is a partial repeat of prior year finding #2022-009. Criteria/Condition: Federal regulations 2 CFR 200.328 - 200.329 provide that required reporting under the federal program must be completed timely and accurately. The federal award agreement includes specific report filing due dates. Segregation of duties is also a key element of internal controls, including controls over compliance, and involves processes whereby the activities of one employee are reviewed or checked by the activities of another individual, and avoids one employee having the ability to perform a transaction or process from beginning to end. We noted during testing that no review procedures are in place surrounding these reports. Cause/Context: Controls were not in place to ensure accurate reporting. Only one individual was involved in the reporting process. Effect: Controls in place do not sufficiently ensure complete, accurate, and timely reporting compliance. Recommendation: We recommend that a full-range of controls related to reporting, including federal program reporting be implemented. The Organization should devote the resources necessary to ensure that reports are timely and accurately prepared, reviewed, and approved prior to filing. All controls, including review and approval should be documented and that documentation be maintained. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a full – range of controls relating to reporting, including federal program reporting. MARR will take such steps as necessary to ensure that reports are timely and accurately prepared, reviewed, and approved prior to filing. All controls, including review and approval will be documented in such documentation to be maintained.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context Recipients may use COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 and amended by the Consolidated Appropriations Act of 2023. The SLFRF program provides substantial flexibility for each recipient to meet local needs within seven separate eligible use categories. Recipients may use SLFRF funds to: Respond to the COVID-19 public health emergency and its negative economic impacts; Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; Make necessary investments in water, sewer, or broadband infrastructure; Provide emergency relief from natural disasters or their negative economic impacts; Fund eligible Surface Transportation projects; and Fund Title I projects that are eligible activities under the Community Development Block Grant and Indiana Community Development Block Grant programs. As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City did not properly design or implement such a system. The City elected to receive the standard revenue loss allowance, allowing it to claim its total SLFRF allocation of $2,290,914 as revenue loss to use for government services. The allocated funds may only be used to cover costs incurred from the period beginning on March 3, 2021, and ending on December 31, 2024. Obligations for costs incurred are required to be liquidated no later than December 31, 2026 (the end of the period of performance). During the audit period, the City completed three separate transfers of SLFRF funds from the ARPA Coronavirus Local Fiscal fund to the Comm Crossing Grant Fund and Water Utility-Operating funds, totaling $976,431 and $494,159, respectively. The transfers allowed for federal grant funds to be commingled with other grant and operating funds. Subsequently, expenditures were disbursed from the Comm Crossing Grant Fund and Water Utility-Operating funds. However, since the transfer of SLFRF funds into the Comm Crossing Grant Fund and Water Utility-Operating funds commingled receipts, and the City did not ensure there was an appropriate system of internal controls in place to account for the federal expenditures separately from other grant and operating expenditures, we were unable to determine a complete population of federal expenditures. Without a complete population of expenditures, we were unable to determine the City's compliance with the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. As such, the $976,431 and $494,159 transferred from the ARPA Coronavirus Local Fiscal fund are considered questioned costs. The lack of internal controls and appropriate documentation to test the compliance requirements was isolated to the situation described above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." Cause Due to the lack of internal controls, the City was unable to differentiate expenditures made from federal and nonfederal funds once it commingled other grant, operating, and federal grant awards into a single fund within its ledger without consideration of the need to separately identify and account for federal expenditures. Effect Without the proper implementation of an effectively designed system of internal controls, the Town cannot identify the expenditures paid with federal grant funds. As such the Town cannot ensure nor can we determine that expenditures of the grant were not unallowable and fell within the period of performance. Questioned Costs We identified $1,470,590 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the City establish a system of internal controls to ensure that grant award funds are accounted for and tracked in a designated grant fund. All activity of the grant should be in this fund with supporting documentation for each transaction. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): PO 20011717 Pass-Through Entity: Indiana State Department of Health Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context The County Department of Health, a department within the County, was awarded the Health Issues and Challenges grant through the Indiana State Department of Health financed through the American Rescue Plan Act for the purpose of funding programs that focus on the improvement of chronic disease, specifically, elevated blood lead level reduction. The Health Issues and Challenges grant is a reimbursable grant, whereby the County received reimbursement on a per-case basis at a stated rate for Case Management and Environmental Investigation activities performed. The County Department of Health received federal receipts related to the grant in the amount of $130,479 during 2023. As part of sound management of the federal award, the County Department of Health was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The County Department of Health did not properly design or implement such a system. Receipts of the program were adequately identified through the use of an account number within the County Health Fund (285) in the County's ledger (ledger) which was unique to the Health Issues and Challenges grant receipts. However, the ledger did not adequately identify the expenditures of the grant program within the County Health Fund. Through inquiry with the County Department of Health employees and review of unit-prepared support of grant expenditures, we determined expenditures were made with grant funds during the audit period; however, we were unable to distinguish between the expenditures of the Health Issues and Challenges grant and all other activities of the County Department of Health in the County Health fund. Due to the lack of separate identification of expenditures in the financial records, we were not able to establish a population from which to audit the Health Issues and Challenges grant for compliance with the following compliance requirements of the program: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Procurement and Suspension and Debarment As such, the full award amount of $130,479, as reported on the Schedule of Expenditures of Federal Awards, was determined to be questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." Cause The County Department of Health was unable to differentiate expenditures made from federal and non-federal funds within its ledger for the Heath Issues and Challenges grant. Effect Without the proper implementation of an effectively designed system of internal controls, a population of expenditures associated with the Health Issues and Challenges grant could not be determined. As such, the County Department of Health cannot ensure nor can we determine that expenditures of the grant were not unallowable, within the proper period, and adhered to established practices and policies. Questioned Costs We identified $130,479 in known questioned costs as noted in the Condition and Context. Recommendation We recommended that management of the County Department of Health establish a system of internal controls to ensure that grant award funds are adequately accounted for and tracked in such a manner as to determine the activity, receipts, and disbursements associated with the grant. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to receipt of direct COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds, all eligible entities were required to execute a Financial Assistance Agreement (Agreement) which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the Town was responsible for the effective administration of the federal award as well as the application of sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 and amended by the Consolidated Appropriations Act of 2023. The SLFRF program provides substantial flexibility for each recipient to meet local needs within seven separate eligible use categories. Recipients may use SLFRF funds to: Respond to the COVID-19 public health emergency and its negative economic impacts; Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; INDIANA STATE BOARD OF ACCOUNTS 17 TOWN OF UPLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; Make necessary investments in water, sewer, or broadband infrastructure. Provide emergency relief from natural disasters or their negative economic impacts. Fund eligible Surface Transportation projects; and Fund Title I projects that are eligible activities under the Community Development Block Grant and Indiana Community Development Block Grant programs. As part of sound management of the federal award, the Town was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The Town had not properly designed or implemented such a system. There was no evidence of segregation of duties, such as an oversight, review, or approval process, that would have ensured that expenditures of award funds were made only for activities and costs that were allowable under the federal award and federal regulations and that were within the period of performance. The Town completed five transfers totaling $224,050 to the Town Utility funds. The amounts transferred to these Utility funds were commingled with other receipts; therefore, the expenditures that went with the SLFRF money, if any, could not be identified. Therefore, the $224,050 could not be tested to ensure compliance with the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. The lack of internal controls and noncompliance were isolated to the transfers noted above. Criteria 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and programspecific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . INDIANA STATE BOARD OF ACCOUNTS 18 TOWN OF UPLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." 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). . . ." Cause A proper system of internal controls was not designed by management of the Town. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Town's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Due to the lack of internal controls, the Town was unable to differentiate expenditures made from federal and nonfederal funds once it commingled nonfederal funds and federal grant awards. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system was not effective in preventing, or detecting and correcting, material noncompliance within the grant. The Town was unable to identify all the expenditures paid with federal funds and cannot ensure, nor can we determine, expenditures of the grant were allowable activity, within the proper period, and were an allowable cost. Questioned Costs We identified $224,050 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the Town establish a system of internal controls to ensure that grant award funds are accounted for and tracked in a designated grant fund. All activity of the grant should be in this fund with supporting documentation for each transaction. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance Federal Agency: U.S. Department of Defense Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations Assistance Listing Number: 12.005 Federal Award Identification Number and Year: H79TI083313 - 2020 Award Period: September 28, 2020, through September 27, 2025 Criteria or specific requirement: 2 CFR 200.303(a) states that a non-Federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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)." In addition, 2 CFR 200.329(c)(1) states 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”. Per the award agreement for contract W912DW-20-2-0003, "Recipient shall submit to the Agreement Administrator (see paragraph 1.2.1) progress reports on a quarterly basis utilizing the form included in Attachment B of this agreement. Reports are due no later than 30 days following the end of each reporting period. A final performance progress report shall be submitted within 90 days after the expiration date of the award." Condition: During testing it was noted that 3 of the 6 financial reports tested did not include documentary evidence of Executive Director review and approval. In addition, 2 of the 2 performance reports tested were filed after the filing deadline. Questioned costs: None. Context: A sample of 6 was made from a population of 17 financial reports, and a sample of 2 was made from a population of 4 performance reports. Of the 6 financial reports sampled, 3 did not have documentary evidence of Executive Director review and approval. Of the 2 performance reports sampled, both were filed after the submission deadline date. Cause: Late filing is due to a lack of adherence to the due dates as defined within the contract terms. The Organization does not have adequate controls in place to document the Executive Director's review and approval of the Federal Financial Reports (SF-425). Effect: Not filing reports on a timely basis can present risks, such as outdated and unreliable information or the inability to detect potential fraud or irregularities. In addition, delayed reports can impede regulatory authorities' ability to monitor compliance, detect patterns or trends, and assess risks in a timely manner. Without adequate documentary evidence around the review of financial reports, there is an increased risk of errors and fraud in the reporting process, which could result in inaccurate financial reporting and misappropriation of funds. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-004. Recommendation: CLA recommends for the Organization to place emphasis on stronger controls around the timely filing of required reports, such as retaining a monthly checklist of required reconciliations and reports. CLA also recommends implementing a procedure that documents the Executive Director's review and approval of the Federal Financial Reports (SF-425s), whether that be via an email chain or retaining a copy that also includes the Executive Director's signature on the report. Views of responsible officials: There is no disagreement with the audit finding.