FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in 200.328 and 200.329. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in 200.328 and 200.329. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in 200.328 and 200.329. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in 200.328 and 200.329. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in 200.328 and 200.329. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in 200.328 and 200.329. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
SPECIAL EDUCATION CLUSTER (IDEA) – 84.027, 84.173 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: HO27A220054-22A, H173A220057 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The Department of Education (RIDE) has not implemented adequate subrecipient monitoring activities to ensure compliance with federal regulations. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. RIDE performs its subrecipient monitoring through the review of audit reports, desk reviews and performing site visits deemed high risk. High-risk subrecipients are determined through the review of audit reports, completion of a desk review checklist, and the completion of an annual survey completed by the subrecipients then scored by RIDE. Criteria: Federal regulations 2 CFR §200.329, require Pass Through Entities (PTE), such as the State, to monitor grant subrecipients to ensure that federal funds are spent appropriately. Federal Regulation 2 CFR §200.332 Subpart B requires that the PTE provide subrecipients with clear grant information, including grant terms, required financial reporting, and audit requirements. Per 2 CFR § 200.328, PTEs must collect financial data from subrecipients no less than annually. Condition: We identified some deficiencies in internal controls relating to subrecipient monitoring during our audit. Deficiencies included a lack of required monitoring documentation (e.g., annual surveys, Single Audit Reports) submitted by subrecipients and failure by RIDE to appropriately consider these deficiencies within their consideration of subrecipient risk. Of the 65 subrecipients receiving $55.3 million, we selected 25 subrecipients for testing and found 4 subrecipients with control deficiencies that prevented RIDE from complying with the subrecipient monitoring requirement as follows: • RIDE was unable to provide documentation supporting grant award information communicated to one subrecipient. Additionally, the required risk assessment for the Special Education Cluster was not performed for this subrecipient. • RIDE was unable to provide the completed Desk Review checklist for 3 subrecipients. These 3 subrecipients also did not complete RIDE’s required annual survey. We found that the lack of annual survey completion did not result in RIDE assessing higher risk for one subrecipient and thus no site visit was performed. The other 2 subrecipients were assessed at high risk, however, no site visit was performed for these subrecipients. • A subrecipient did not submit its fiscal year 2022 and 2023 Single Audit Reports and RIDE did not modify its risk assessment accordingly. RIDE was also unable to provide documentation supporting its follow-up (i.e., meeting discussing the submission of the Single Audit Report) with the subrecipients. Additionally, RIDE’s risk assessment was not adequate to identify this subrecipient as high risk. Internal controls over subrecipient monitoring would be improved by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed. Implementing site visits when subrecipients do not comply with documentation requirements would ensure that monitoring procedures align with the risk associated with the subrecipient. Cause: Lack of adequate dedicated agency resources and insufficient controls to ensure compliance with federal requirements. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-047 Improve internal controls over subrecipient monitoring by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed.
SPECIAL EDUCATION CLUSTER (IDEA) – 84.027, 84.173 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: HO27A220054-22A, H173A220057 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The Department of Education (RIDE) has not implemented adequate subrecipient monitoring activities to ensure compliance with federal regulations. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. RIDE performs its subrecipient monitoring through the review of audit reports, desk reviews and performing site visits deemed high risk. High-risk subrecipients are determined through the review of audit reports, completion of a desk review checklist, and the completion of an annual survey completed by the subrecipients then scored by RIDE. Criteria: Federal regulations 2 CFR §200.329, require Pass Through Entities (PTE), such as the State, to monitor grant subrecipients to ensure that federal funds are spent appropriately. Federal Regulation 2 CFR §200.332 Subpart B requires that the PTE provide subrecipients with clear grant information, including grant terms, required financial reporting, and audit requirements. Per 2 CFR § 200.328, PTEs must collect financial data from subrecipients no less than annually. Condition: We identified some deficiencies in internal controls relating to subrecipient monitoring during our audit. Deficiencies included a lack of required monitoring documentation (e.g., annual surveys, Single Audit Reports) submitted by subrecipients and failure by RIDE to appropriately consider these deficiencies within their consideration of subrecipient risk. Of the 65 subrecipients receiving $55.3 million, we selected 25 subrecipients for testing and found 4 subrecipients with control deficiencies that prevented RIDE from complying with the subrecipient monitoring requirement as follows: • RIDE was unable to provide documentation supporting grant award information communicated to one subrecipient. Additionally, the required risk assessment for the Special Education Cluster was not performed for this subrecipient. • RIDE was unable to provide the completed Desk Review checklist for 3 subrecipients. These 3 subrecipients also did not complete RIDE’s required annual survey. We found that the lack of annual survey completion did not result in RIDE assessing higher risk for one subrecipient and thus no site visit was performed. The other 2 subrecipients were assessed at high risk, however, no site visit was performed for these subrecipients. • A subrecipient did not submit its fiscal year 2022 and 2023 Single Audit Reports and RIDE did not modify its risk assessment accordingly. RIDE was also unable to provide documentation supporting its follow-up (i.e., meeting discussing the submission of the Single Audit Report) with the subrecipients. Additionally, RIDE’s risk assessment was not adequate to identify this subrecipient as high risk. Internal controls over subrecipient monitoring would be improved by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed. Implementing site visits when subrecipients do not comply with documentation requirements would ensure that monitoring procedures align with the risk associated with the subrecipient. Cause: Lack of adequate dedicated agency resources and insufficient controls to ensure compliance with federal requirements. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-047 Improve internal controls over subrecipient monitoring by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed.
SPECIAL EDUCATION CLUSTER (IDEA) – 84.027, 84.173 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: HO27A220054-22A, H173A220057 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The Department of Education (RIDE) has not implemented adequate subrecipient monitoring activities to ensure compliance with federal regulations. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. RIDE performs its subrecipient monitoring through the review of audit reports, desk reviews and performing site visits deemed high risk. High-risk subrecipients are determined through the review of audit reports, completion of a desk review checklist, and the completion of an annual survey completed by the subrecipients then scored by RIDE. Criteria: Federal regulations 2 CFR §200.329, require Pass Through Entities (PTE), such as the State, to monitor grant subrecipients to ensure that federal funds are spent appropriately. Federal Regulation 2 CFR §200.332 Subpart B requires that the PTE provide subrecipients with clear grant information, including grant terms, required financial reporting, and audit requirements. Per 2 CFR § 200.328, PTEs must collect financial data from subrecipients no less than annually. Condition: We identified some deficiencies in internal controls relating to subrecipient monitoring during our audit. Deficiencies included a lack of required monitoring documentation (e.g., annual surveys, Single Audit Reports) submitted by subrecipients and failure by RIDE to appropriately consider these deficiencies within their consideration of subrecipient risk. Of the 65 subrecipients receiving $55.3 million, we selected 25 subrecipients for testing and found 4 subrecipients with control deficiencies that prevented RIDE from complying with the subrecipient monitoring requirement as follows: • RIDE was unable to provide documentation supporting grant award information communicated to one subrecipient. Additionally, the required risk assessment for the Special Education Cluster was not performed for this subrecipient. • RIDE was unable to provide the completed Desk Review checklist for 3 subrecipients. These 3 subrecipients also did not complete RIDE’s required annual survey. We found that the lack of annual survey completion did not result in RIDE assessing higher risk for one subrecipient and thus no site visit was performed. The other 2 subrecipients were assessed at high risk, however, no site visit was performed for these subrecipients. • A subrecipient did not submit its fiscal year 2022 and 2023 Single Audit Reports and RIDE did not modify its risk assessment accordingly. RIDE was also unable to provide documentation supporting its follow-up (i.e., meeting discussing the submission of the Single Audit Report) with the subrecipients. Additionally, RIDE’s risk assessment was not adequate to identify this subrecipient as high risk. Internal controls over subrecipient monitoring would be improved by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed. Implementing site visits when subrecipients do not comply with documentation requirements would ensure that monitoring procedures align with the risk associated with the subrecipient. Cause: Lack of adequate dedicated agency resources and insufficient controls to ensure compliance with federal requirements. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-047 Improve internal controls over subrecipient monitoring by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed.
SPECIAL EDUCATION CLUSTER (IDEA) – 84.027, 84.173 Federal Awarding Agency: U.S. Department of Agriculture (USDA) Federal Award Fiscal Year: 2024 Federal Award Numbers: HO27A220054-22A, H173A220057 Administered by: Rhode Island Department of Elementary and Secondary Education (RIDE) Compliance Requirement: Subrecipient Monitoring SUBRECIPIENT MONITORING The Department of Education (RIDE) has not implemented adequate subrecipient monitoring activities to ensure compliance with federal regulations. Background: The State relies on grantee agencies to perform subrecipient monitoring, when required, and ensure compliance with federal regulations. There is no statewide monitoring of subrecipient activities to ensure compliance with federal regulations. RIDE performs its subrecipient monitoring through the review of audit reports, desk reviews and performing site visits deemed high risk. High-risk subrecipients are determined through the review of audit reports, completion of a desk review checklist, and the completion of an annual survey completed by the subrecipients then scored by RIDE. Criteria: Federal regulations 2 CFR §200.329, require Pass Through Entities (PTE), such as the State, to monitor grant subrecipients to ensure that federal funds are spent appropriately. Federal Regulation 2 CFR §200.332 Subpart B requires that the PTE provide subrecipients with clear grant information, including grant terms, required financial reporting, and audit requirements. Per 2 CFR § 200.328, PTEs must collect financial data from subrecipients no less than annually. Condition: We identified some deficiencies in internal controls relating to subrecipient monitoring during our audit. Deficiencies included a lack of required monitoring documentation (e.g., annual surveys, Single Audit Reports) submitted by subrecipients and failure by RIDE to appropriately consider these deficiencies within their consideration of subrecipient risk. Of the 65 subrecipients receiving $55.3 million, we selected 25 subrecipients for testing and found 4 subrecipients with control deficiencies that prevented RIDE from complying with the subrecipient monitoring requirement as follows: • RIDE was unable to provide documentation supporting grant award information communicated to one subrecipient. Additionally, the required risk assessment for the Special Education Cluster was not performed for this subrecipient. • RIDE was unable to provide the completed Desk Review checklist for 3 subrecipients. These 3 subrecipients also did not complete RIDE’s required annual survey. We found that the lack of annual survey completion did not result in RIDE assessing higher risk for one subrecipient and thus no site visit was performed. The other 2 subrecipients were assessed at high risk, however, no site visit was performed for these subrecipients. • A subrecipient did not submit its fiscal year 2022 and 2023 Single Audit Reports and RIDE did not modify its risk assessment accordingly. RIDE was also unable to provide documentation supporting its follow-up (i.e., meeting discussing the submission of the Single Audit Report) with the subrecipients. Additionally, RIDE’s risk assessment was not adequate to identify this subrecipient as high risk. Internal controls over subrecipient monitoring would be improved by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed. Implementing site visits when subrecipients do not comply with documentation requirements would ensure that monitoring procedures align with the risk associated with the subrecipient. Cause: Lack of adequate dedicated agency resources and insufficient controls to ensure compliance with federal requirements. Effect: Noncompliance with federal compliance requirements by subrecipients could occur without being identified by the State in a timely manner. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-047 Improve internal controls over subrecipient monitoring by 1) updating subrecipients’ risk assessments when they fail to comply with documentation requirements, and 2) implementing monitoring procedures to identify instances where RIDE’s monitoring is not consistent with the risk assessed.
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.
Federal Agency: U.S. Department of Homeland Security Pass-Through Agency: Central Office of Recovery, Reconstruction and Resiliency of Puerto Rico (COR3) Program: Disaster Grants – Public Assistance (Presidentially-Declared Disaster) (ALN 97.036) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency in Internal Control (SD), Instance of Noncompliance (NC) This finding is similar to prior year finding 2023-009. Statement of Condition In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of nine (9) projects for two quarters of fiscal year 2023-2024. During our audit procedures, we noted that the reports did not agree with the accounting and project records. Criteria 2 CFR 200.302 (a) states that the states’ and other non-Federal entities’ financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Cause of Condition The Municipality’s accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities. Effect of Condition The expenses reported in the Quarterly Progress Reports do not agree with the accounting records. Recommendation We recommend the Program Administrators reconcile the differences between the quarterly report and the accounting records before the submission to the pass-through entity. Questioned Costs None Views of Responsible Officials and Planned Corrective Action We will give instructions to the accounting staff in charge of the preparation of the quarterly progress reports of the Program, in order to comply with the FEMA reporting requirements. Responsible Official: Mrs. Irma M. Vargas Aguirre, Finance and Budget Director Implementation Date: December 31, 2025
Federal agency: Federal Aviation Administration Federal program title: Airport Improvement Program Assistance Listing Number: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 to June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria: Federal Aviation Administration (FAA) guidelines require Airport Improvement Program recipients to submit periodic financial reports, including SF-425 (Federal Financial Report), Form 5100- 127 (Operating and Financial Summary), Form 5100-126 (Financial Government Payment Report), Form 5370-1 (Construction Progress and Inspection Report), and Form SF-271 (Requests for Reimbursement) in accordance with 2 CFR §200.328 and §200.329. Condition: During our testing, we noted that for each of the County’s seven Airport Improvement Program grants, only Form SF-271 was submitted for the audit period, despite requirements to submit five distinct report types per grant. Questioned costs: None Context: We initially sampled 31 of 105 reports required to be submitted during the year by the granting agency. 11 of the 11 SF-271 reports were received from the county and tested without exception. The department explained that Forms SF-425, 5100-127, 5100-126, and 5370-1 had not been submitted for the year under audit and therefore could not be provided. Cause: The aviation department was previously not aware of the reporting requirements of the grant. When the department became aware of the requirements they began working with the FAA to ensure all required reports were submitted. The delay in becoming aware of these requirements resulted in a significant backlog to be submitted which was exacerbated by understaffing at the department. Effect: The County’s failure to submit four of the five required reports for each of its seven Airport Improvement Program grants resulted in noncompliance with FAA reporting requirements under 2 CFR §200.328 and §200.329. This lack of reporting may impact the County’s ability to demonstrate proper stewardship of federal funds, delay reimbursement processing, and potentially affect future grant eligibility or funding decisions. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends that the County provide staff with training related to identifying and complying with grant requirements. Additionally, CLA recommends that the County implement tracking procedures, such as a monitoring checklist, to ensure all required reports are submitted in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003: U.S. Department of Housing and Urban Development, Community Project Funding Statement of Condition: During the fiscal year ended June 30, 2024, the Organization failed to submit the required Federal Financial Report (SF-425) and Real Property Status Report (SF-429) during the reporting period. These reports are essential for federal oversight and accountability of grant funds and federally funded property. Criteria: Under 2 CFR §200.329(c)(2) and (d), recipients of federal awards must submit financial reports using the SF-425 on a semi-annual basis and must submit the SF-429 annually to report the status of real property purchased, constructed, or renovated with federal funds. These requirements are reinforced by the terms and conditions of the grant agreement and the Office of Management and Budget (OMB) guidance. Cause: The Organization's staff charged with grant management were unaware of the reporting requirements, indicating a lack of training and internal controls to ensure compliance with federal reporting obligations. Effect: Failure to submit the SF-425 and SF-429 reports compromises the federal governments' ability to monitor the financial and property management of the grant, which may result in delays in future funding disbursements, increased risk of questioned costs, and potential noncompliance with federal grant regulations. Context: Neither semi-annual SF-425 nor the annual SF-429 was submitted by the Organization during the fiscal year ended June 30, 2024. Questioned costs: $0 Recommendation: Management should review the grant agreement and applicable federal regulations to identify all required reports, and implement procedures to ensure submission of all required reports by their due dates. Management's Response and Corrective Action Plan: Management agrees with the finding and is taking steps to file all required reports.
Finding: 2024-003 Timely Financial and Programmatic Reporting (Significant Deficiency) Information on the Federal Programs: ALN #10.937 Partnerships for Climate-Smart Commodities Criteria or Specific Requirement (including Statutory, Regulatory, or Other Citation): Per 2 CFR 200.328(b)(1), recipients must submit financial reports at intervals required by the Federal awarding agency, but no less frequently than annually and no more frequently than quarterly. Reports must be submitted no later than 30 calendar days after the reporting period end date. Per 2 CFR 200.329(b), recipients are required to submit performance reports at intervals required by the Federal awarding agency, but no less frequently than annually and no more frequently than quarterly. Performance reports must also be submitted no later than 30 calendar days after the reporting period end date.Condition: During our testing of quarterly reporting requirements, we noted the following: Financial Reports: Four of four (100%) quarterly financial reports were submitted after the 30-day deadline. Performance Reports: Three of four (75%) quarterly performance reports were submitted after the 30-day deadline. Detailed Progress Reports: CIF was unable to provide evidence of submission (such as electronic confirmation or date-stamped copies). As a result, we were unable to determine whether these reports were submitted timely. Cause: These issues occurred due to delays in internal review processes and the absence of a robust tracking system for reporting deadlines. Additionally, documentation supporting the submission of the detailed progress reports was not retained. Effect or Potential Effect: Untimely submission of required reports limits the Federal awarding agency’s ability to evaluate financial and program performance in a timely manner. The lack of submission documentation for detailed progress reports also creates a risk that required reports may not be submitted at all, which could impact continued funding, create compliance findings, and impair the Federal awarding agency’s oversight responsibilities. Questioned Costs: N/A Context: Our testing included 100% of required quarterly reports for the audit period. We identified late submission for 100% of financial reports and 75% of performance reports. For detailed progress reports, no documentation was available to confirm submission for the entire period reviewed. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that management: 1. Implement controls, such as a reporting calendar with automated reminders, to ensure that financial and performance reports are prepared, reviewed, and submitted within 30 days of the quarter-end, in compliance with 2 CFR 200.328(b)(1) and 2 CFR 200.329(b). 2. Retain submission confirmations for all reports, including detailed progress reports, to provide an audit trail and evidence of compliance with Federal requirements.
FINDING 2024-014 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-014. Condition and Context The system of internal controls over the applicable reports, as established by the School Corporation, was not properly implemented nor was it operating effectively to ensure that sufficient audit evidence was maintained to support the requests for reimbursement, as well as the Final Expenditure Reports submitted by the School Corporation. The Title I Director approved the requests for reimbursement and the Final Expenditure Reports prior to submission; however, this review was not effective. The fiscal years 2021-2022 and 2022-2023 Final Expenditure Reports and the six reimbursement requests were selected for testing. The School Corporation was unable to provide for audit documentation to support the underlying data accumulated and summarized in each of the Financial Expenditure Reports or the six reimbursement requests. The reported data could not be traced to records that accumulate or summarize the data; therefore, the accuracy and completeness of the reports could not be verified. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 47 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Due to turnover of staffing in the School Corporation's administrative office, the School Corporation's management had not designed nor implemented a system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and available for audit related to the Reporting compliance requirement. Effect Without a proper system of internal controls in place that operated effectively, the School Corporation did not retain and provide appropriate supporting documentation. This prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation will be maintained and made available for audit as related to the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.