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.
Criteria: 2 CFR 200.303 Internal Controls (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control- Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.329 Monitoring and reporting program performance (a) Monitoring by the recipient and subrecipient. The recipient and subrecipient are responsible for the oversight of the Federal award. The recipient and subrecipient must monitor their activities under Federal awards to ensure they are compliant with all requirements and meeting performance expectations. Monitoring by the recipient and subrecipient must cover each program, function, or activity. See also § 200.332. Condition: • Supporting documentation was not available for 4 out of 8 monitoring reports selected for testing. • None of the monitoring reports selected were approved by a second individual as required by the WIB’s policy. Cause: • Documentation was not retained as required. • Internal controls are not in place over eligibility and monitoring as required by the WIB’s policy. Effect: • Funding may be provided to individuals or entities who are not eligible to receive funding under the federal award programs. • Possible reduction of future funding due to noncompliance with federal award program requirements. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend that the WIB implement controls and document procedures over eligibility monitoring to ensure compliance with federal award requirements.
Condition: Expenditures for federal program, Coronavirus State and Local Fiscal Recovery Funds were not accurately reported on the Compliance Report. Federal expenditures were underreported by $753,744. The County reported $0, resulting in an understatement of $753,744 This was due to the County failing to report expenditures on a cash basis. 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 with grant requirements. 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: This issue originated under the prior County Clerk’s administration where key reporting processes were not followed. The Board of County Commissioners and the other elected officials have made correcting this a top priority. Together, we are: • developing a comprehensive SOP to ensure accurate and timely tracking and reporting of federal funds, • improving communication and oversight between all county offices to ensure consistent reporting standards, • and ensuring annual compliance with federal reporting requirements. Our collective goal is to implement the policies and structures that will keep Osage County operating with the highest standard of accountability and excellence. County Clerk: I was not the County Clerk in office at this time. To correct this issue. the County plans to develop a SOP to timely and accurately track and report on federal funds. The SOP will be reviewed, adopted, and monitored by the Board of County Commissioners. County Treasurer: The County was under the understanding that once we established we were reporting as Loss Revenue, we would not have to submit the report annually. The final reporting was submitted prior to deadline. Criteria: 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 2024-006 – Compliance; Internal Control over Compliance, Reporting (Material Weakness) Name of Federal Agency: U.S. Environmental Protection Agency Federal Program Name: Nonpoint Source Implementation Grants Assistance Listing Numbers: 66.460 Pass-Through Entity: Oregon Department of Environmental Quality Name of Federal Agency: U.S. Department of Commerce – National Oceanic and Atmospheric Administration Federal Program Name: Pacific Coast Salmon Recovery Program Assistance Listing Numbers: 11.438, 15.015, 15.244 Pass-Through Entity: State of Oregon – Oregon Watershed Enhancement Board (OWEB) Name of Federal Agency: U.S. Department of Agriculture Federal Program Name: National Fish and Wildlife Foundation Assistance Listing Numbers: 10.665 Pass-Through Entity: U.S. Forest Service Name of Federal Agency: U.S. Department of AgricultureFederal Program Name: Natural Resources Conservation Service Assistance Listing Numbers: 10.905 Pass-Through Entity: U.S. Forest Service Name of Federal Agency: U.S. Department of the Interior Federal Program Name: Wildlife, Sport Fish and Restoration Program Assistance Listing Numbers: 15.244 Pass-Through Entity: Bureau of Land Management Name of Federal Agency: U.S. Department of the Interior Federal Program Name: Secure Rural Schools and community Self-Determination – Watershed and water-quality improvements Assistance Listing Numbers: 15.234 Pass-Through Entity: Bureau of Land Management Criteria: Under 2 CFR 200, recipients must submit performance and financial reports as required by the terms and conditions of the award and must retain records sufficient to demonstrate compliance (see (§200.301Monitoring and reporting program performance, and §200.328 Financial reporting, §200.329 Monitoring and reporting program performance, and §200.334 Retention requirements for records). The grant agreements for awards above require timely submission of performance / progress reports by specified due dates, with documentation maintained to support the submitted information. Condition: For the fiscal year ended June 30, 2024, the auditee could not provide sufficient evidence that required reports for the programs listed were prepared, reviewed, and submitted in accordance with grant terms. Specifically: No provided required financial reports, and Partnership for the Umpqua Rivers lacked copies or evidence of submission, and support for reported amounts requested. Auditors were not provided with performance/progress reports and were instructed that Partnership for the Umpqua Rivers had no retained copies, review sign-offs, or submission confirmation. Where payments were received, support for the required reports or metrics were not retained and could not be supplied to auditors for reconciling to underlying records. Cause: Management has not implemented formal reporting controls, including: A documented reporting calendar with due dates and responsible staff, Reconciliation of report amounts to the accounting records, Retention procedures for report copies, underlying support, and submission confirmations, and Supervisory review evidenced by signatures or workflow approvals. Effect or Potential Effect: Absent evidence of timely, accurate reporting and adequate record retention: The organization is at risk of noncompliance with federal award conditions, Inaccurate financial or performance information may be reported to the funding agency, and The entity may be subject to remedial actions, including heightened monitoring, repayment of questioned amounts, or potential suspension of funding. Questioned Cost: None directly noted, but potential risk if reports were incomplete or inaccurate.Context: During our audit, it was found that the Partnership for the Umpqua Rivers experienced complete staff turnover in Financial Management for the year being audited. No current finance employees had worked for the organization during the year being audited. Award files provided to auditors did not contain information related to reporting of activity, expenditures, or progress of the awards. Repeat of a Prior-Year Finding: No, Prior- year did not require a Single Audit. Recommendation: We recommend that Partnership for the Umpqua Rivers: Establish a formal reporting and retention policy aligned with 2 CFR 200 and grant terms. Implement a centralized reporting calendar that tracks due dates, preparers, reviewers, and submission methods. Require reconciliations of financial reports to the general ledger and supporting schedules, retain the reconciliation with the reporting package. Create standard workpapers for performance metrics for each award. Configure the grant portal or document management system to retain submission confirmations, reports, receipts, and version -controlled copies of all reports for awards. Document supervisory review through sign-offs prior to submission and with evidence retained. Provide training to staff on Uniform Guidance requirements and record retention (§200.334). District Response: Partnership for the Umpqua Rivers acknowledges the deficiencies. Corrective Action Plan: ____________ (To be completed by Partnership for the Umpqua Rivers) Planned Implementation Date: _____________ Responsible Person: Partnership for the Umpqua Rivers Finance Manager
SA2024-001: Lack of preparing and submitting the report based on Federal Funding Accountability and Transparency Act (FFATA) Assistance Listing Numbers: 14.218 Assistance Listing Title: CDBG Entitlement Grants Cluster Name of Federal Agency: U.S. Department of Housing and Urban Development Criteria: Per 2 CFR 200.329(b), reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with program requirements. For direct recipients of grants or cooperative agreements who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) and report subaward date. Condition: The City failed to prepare and submit the FFATA report through FSRS. Cause: The City’s internal controls did not ensure the FFATA reporting was completed in accordance with governing requirements. Effect: Information was not reported to the federal awarding agency. Recommendation: We recommend the City enhance internal controls to ensure FFATA reporting is prepared in accordance with program requirements. Management Response: The City hired a new senior accountant that would be assigned to ensure that required reports from various agencies filed timely.
SIGNIFICANT DEFICIENCY 2024-002 - Reporting Federal Program Information: Department of Education ALN 84.425 – Elementary and Secondary School Emergency Relief ALN 21.027 – Coronavirus Local Fiscal Recovery Fund Criteria: The following CFRs apply to this finding: 2 CFR section 200.328 and 2 CFR section 200.329 Condition: During audit procedures, it was identified that the School could not provide copies of the Annual Performance Report/Annual Performance and Expenditure Report filed for the period under audit. Cause: The School did not have the necessary internal controls over reporting and did not complete and submit or did not appropriately maintain copies of the reports submitted. Effect: Reports may not have been completed and submitted within the 90 day allotted time after the end of the reporting period. Identification of Questioned Costs: None identified Context: The ESSER Performance report was due on April 12, 2024 for the period ending 6/30/23. Information was gathered and notes were made on the report form. No copy of the submitted report was maintained in the client file and client was unable to obtain a copy from the online submission program. A copy of the Coronavirus annual performance report was not maintained in the client files and client was unable to access the a copy of the report online. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the School familiarize themselves with federal Reporting Requirements and implement internal control processes and procedures to ensure that they are following the criteria above. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Limestone Community School and the Town of Limestone, Maine.
Finding 2024-003: Reporting - Significant Deficiency Name of Federal Agency: U.S. Department of the Treasury Federal Program Name and Assistance Listing Number: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, 21.027 Federal Award Identification Numbers and Years: 194586 (2024), 196178 (2024) Name of Pass-through Entity: California Community Foundation Criteria: According to 2 CFR 200.329, management is responsible for ensuring that all reports are submitted timely, in accordance with organizational policies and compliance requirements. Condition: During the audit we noted that the Organization had not retained documentation showing that the required reports were submitted timely for subawards 194586 and 196178. Cause: The Organization's financial management did not retain documentation indicating that the reports were submitted timely. Effect or Potential Effect: This condition may lead to non-compliance with reporting requirements. Questioned Costs: N/A Context: This issue was noted across multiple reporting instances. While management submitted complete and accurate reports, documentation confirming timely submission was not retained. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization implement policies, procedures, and controls to ensure that there are documented and retrievable records to indicate that reports were submitted timely. Views of Responsible Officials: Management concurs with the finding and will ensure that records are maintained to indicate timely submission of reports.
Finding 2024-013 – Noncompliance with Reporting Over Major Federal Program - Coronavirus State and Local Fiscal Recovery Funds (Repeat Finding – 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: During the test of 100% of expenditures for the Coronavirus State and Local Fiscal Recovery Funds, totaling $1,152,068, twenty-three (23) expenditures totaling $905,330 were not accurately reported in the proper period on the quarterly reports as required by the Reporting compliance requirement. 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 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 reports and to ensure compliance with federal 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.
FINDING REFERENCE NUMBER 2024-022 (See Finding Reference Number 2024-003) FEDERAL PROGRAM (ALN – 10.542) PANDEMIC EBT FOOD BENEFITS (P-EBT) U.S. DEPARTMENT OF AGRICULTURE AWARD NUMBERS 2301PR456S9032 (Federal Award Years: 10/1/2022 through 3/31/2024) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT ACTIVITIES ALLOWED OR UNALLOWED // ELIGIBILITY // REPORTING TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA Uniform Guidance at 2 CFR 200 §200.302, Financial Management, establishes that: “(a) Each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State's funds. All recipient and subrecipient 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 the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. (See § 200.450). (b) The recipient's and subrecipient's financial management system must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a Federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. In accordance with the approved State Plan, no summer 2023 P-EBT benefits may be issued to children who did not attend an NSLP-participating school at the end of the school year immediately preceding the summer. STATEMENT OF CONDITION As part of our internal control procedures for the financial management system regarding reporting requirements, we found the following deficiencies regarding the only report submitted during the fiscal year of September 30, 2023: • The amount reported as total Federal share of outlays (line 10.g.), was $35,356,789, and the amount of $879,121 (line 10.h) as total unliquidated obligations. The accounting system (PRIFA) reported total expenditures in the amount of $36,235,910, which is the sum of lines 10.g and 10.h. No unliquidated obligations are included in the database of PRIFA. • In addition, we noted an expenditure dated October 31, 2023, in the database for $92,157 that was not reported. This amount was not included as unliquidated obligation in the report of September and no other report was submitted that included this expenditure. • We have no administrative expenses recorded in the database; however, the reports provided listed $307,733 as administrative expenses. In relation to the allowable activities, we obtained a list of all participants that received the benefits. We noted that the information provided from SAIC system does not agree with the reports provided by Service EBT Provider. We noted that the lists of emissions from June 2023 through October 2023 totalized $36,181,839, in accordance with a list from SAIC. Emissions from the Service EBT Provider and accounting records presented expenditures in the amount of $36,328,067, a total difference of $146,228. This difference represents 1,052 participants that are not in the list provided from SAIC, but whose benefits were issued according to the reports from the Service EBT Provider. In relation to the evaluation of the eligibility requirements, we noted that 27 participants were duplicated in the lists from SAIC. In addition, we were unable to verify if the participant attended a private school that participated in the NSLP, because no evidence of the lists from the Puerto Rico Department of Education was provided. QUESTIONED COSTS $146,228. This amount is the total amount of benefits issued for 1,052 participants whose information was not provided. PERSPECTIVE INFORMATION These deficiencies are a systemic problem that is related to lack of proper training and segregation of duties when reporting (preparer and reviewer not being the same person). No proper internal controls are in place to ensure that all data used to issue the benefits is safeguarded and properly reconciled with accounting records. STATEMENT OF CAUSE ADSEF did not establish and implement adequate internal controls to ensure the accuracy, completeness, and supervisory review of financial information used in the preparation of Federal reports. In addition, financial data reported to the Federal agency was not consistently reconciled to the supporting accounting records and database prior to submission. Furthermore, no proper records are maintained of the data used to issue the benefits and how the reconciliation process from the SAIC system and benefits processed by the Service EBT Provider is made. POSSIBLE ASSERTED EFFECT The discrepancies between reported amounts and supporting records, along with lack of supervisory review, create a risk that Federal reports are inaccurate, incomplete, or unsupported, resulting in noncompliance with Federal reporting requirements. We were unable to verify the complete lists of beneficiaries of the P-EBT. IDENTIFICATION OF REPEAT FINDING This is a repeat of a finding reported in the prior audit as Finding Numbers 2023-001/2023-029. RECOMMENDATIONS We recommend that management establish an internal control process that includes having more than one person review the reports submitted to the Federal government. In addition, we recommend proper internal controls that require a structured process of compiling, reviewing and safeguarding all required data for benefits issued.
FINDING REFERENCE NUMBER 2024-023 (See Finding Reference Number 2024-004) FEDERAL PROGRAMS (ALN – 10.566) NUTRITION ASSISTANCE FOR PUERTO RICO U.S. DEPARTMENT OF AGRICULTURE (ALN – 93.558) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) (ALN – 93.560) PAYMENT TO TERRITORIES – ADULT (ALN – 93.568) LOW-INCOME HOME ENERGY ASSISTANCE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 231PR426S7003/4; 241PR426S7003/4 (Federal Award Years: 10/1/2022 through 9/30/2024) 2022G996117; 2023996117 (Federal Award Years: 10/1/2021 through 9/30/2023) 2401PRTANF1 (Federal Award Years: 10/1/2023 through 9/30/2026) 2301PRTABD; 2401PRTABD (Federal Award Years: 10/1/2022 through 9/30/2026) 2201PRLIEA; 2301PRLIEA; 2401PRLIEA (Federal Award Years: 10/1/2021 through 9/30/2025) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT ALLOWABLE COSTS/COSTS PRINCIPLES TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA Uniform Guidance at 2 CFR 200 §200.302, Financial Management, establishes that: “(a) Each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State's funds. All recipient and subrecipient 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 the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. (See § 200.450). (b) The recipient's and subrecipient's financial management system must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a Federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. (4) Effective control over and accountability for all funds, property, and assets. The recipient or subrecipient must safeguard all assets and ensure they are used solely for authorized purposes. See § 200.303. (5) Comparison of expenditures with budget amounts for each Federal award. (6) Written procedures to implement the requirements of § 200.305. (7) Written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award.” STATEMENT OF CONDITION As part of our audit procedures, we conducted an analysis of the process used to distribute administrative costs among the various programs administered by ADSEF. Administrative expenses are distributed based on a methodology called "Random Moment Sampling" (RMS). We identified the following deficiencies in the implementation and execution of this process: i. There is no written procedure that outlines the process for applying this formula for distributing administrative expenses. ii. There is no standardized monitoring or communication to ensure that employees who are required to complete this form are fully assigned to the roles subject to this process. In other words, the Human Resources Department or the Appointments Office do not communicate periodically or whenever a staff change occurs, in order to adjust the population subject to this questionnaire. iii. Among the options provided for responding to the RMS survey, three options are not assigned to a Federal program. These options include licenses; other types of work not directly tied to a Federal program function for which administrative expenses can be allocated. According to the State Plan, 3,300 questionnaires will be administered for functions performed by employees who are not at the central level, and 300 for employees who are at the central level. Two quarters of the Fiscal Year 2023-2024 fiscal year were observed, in which these three options represented between 25% and 18% for local offices and 38% at the central level. Because these options are not tied to a Federal program function, they reduce the percentage to zero and redistribute the percentage among Federal programs. QUESTIONED COSTS None. PERSPECTIVE INFORMATION We consider this deficiency a systemic problem. This allocation of administrative expenses is made quarterly; however, the adjustment in the accounting system (PRIFAS) is not necessarily made in the same period. The administrative expenses of each program contain the redistribution of expenses not assigned to a Federal program. STATEMENT OF CAUSE ADSEF does not have a written procedure establishing the process for implementing and monitoring the execution of this methodology. Additionally, among the responses regarding functions performed, time may be allocated to functions not related to Federal programs. POSSIBLE ASSERTED EFFECT They lack a standardized process that ensures that the methodology used allocates reasonable administrative costs among Federal programs, ensures that the distribution base is complete, and is periodically monitored. Furthermore, by redistributing the percentage of responses not directly related to a Federal program function, administrative costs could be claimed from Federal programs that should likely be allocated to state funds. IDENTIFICATION OF REPEAT FINDING This is a repeat of a finding reported in the prior audit as Finding Numbers 2023-004/2023-032. RECOMMENDATIONS We recommend that management establish a written internal control procedure that provides certainty, monitoring frequency, data validation, and responsibilities for those responsible for executing this process. Additionally, it should be considered that there are functions performed by the personnel in charge of answering the RMS that are not directly linked to a Federal program and should be assigned to state funds.
FINDING REFERENCE NUMBER 2024-024 (See Finding Reference Number 2024-005) FEDERAL PROGRAMS (ALN – 10.566) NUTRITION ASSISTANCE FOR PUERTO RICO U.S. DEPARTMENT OF AGRICULTURE (ALN – 93.558) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 231PR426S7003/4 (Federal Award Years: 10/01/2022 through 09/30/2023); 241PR426S7003/4 (Federal Award Years: 10/01/2023 through 09/30/2024) 2023996117 (Federal Award Years: 10/01/2022 through 09/30/2023) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT ALLOWABLE COSTS/COSTS PRINCIPLES TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA Uniform Guidance at 2 CFR 200 §200.302, Financial Management, establishes that: “(a) Each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State's funds. All recipient and subrecipient 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 the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. (See § 200.450). (b) The recipient's and subrecipient's financial management system must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a Federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. … (6) Written procedures to implement the requirements of § 200.305. (7) Written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award.” STATEMENT OF CONDITION As part of our audit procedures, we requested evidence of the indirect costs transactions. ADSEF is allowed to claim 16.80% of indirect costs. As part of our audit procedures over the Nutrition Assistance for Puerto Rico and TANF program, we selected some transactions to evaluate the compliance with the indirect cost’s claims. The TANF program reported three (3) transactions related to indirect costs in the amount of $569,998.55, and for the Nutrition Assistance for Puerto Rico three (3) transactions were reported in the amount of $4,815,418.41. We requested evidence of one (1) transaction for the TANF program and one (1) for the Nutrition Assistance for Puerto Rico, no evidence of class object was provided in order to ascertain that only allowable expenditure transactions were considered in the calculation and claim of indirect costs. QUESTIONED COSTS None. PERSPECTIVE INFORMATION We consider this deficiency a systemic problem. ADSEF does not have an internal control process that allows for proper authorization and monitoring of the claims made for indirect costs. STATEMENT OF CAUSE ADSEF does not have a written procedure establishing the process for claiming and documenting indirect costs claims. The process of recording indirect costs is based on an excel spreadsheet, no detail of costs indicating the class object and transactions considered are maintained. POSSIBLE ASSERTED EFFECT Indirect costs calculation may include unallowable costs and not be detected timely. ADSEF cannot provide proper audit evidence of the amounts claimed as indirect costs. IDENTIFICATION OF REPEAT FINDING This is a repeat of a finding reported in the prior audit as Finding Numbers 2023-005/2023-033. RECOMMENDATIONS We recommend that management establish internal control processes to reconcile PRIFAS and the various sources of information used for reporting. Additionally, maintain clear records of indirect costs claimed and awarded.
FINDING REFERENCE NUMBER 2024-041 FEDERAL PROGRAM (ALN – 93.568) LOW-INCOME HOME ENERGY ASSISTANCE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 2301PRLIEA (Federal Award Year: 10/1/2022 – 9/30/2024) 2401PRLIEA (Federal Award Year: 10/1/2023 – 9/30/2025) 2301PRLIEE (Federal Award Year: 10/1/2022 – 9/30/2024) 2301PRLIEI (Federal Award Year: 10/1/2022 – 9/30/2024) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT REPORTING – PERFORMANCE TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA Uniform Guidance at 2 CFR § 200.302, Financial Management, establishes that: (a) Each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State's funds. All recipient and subrecipient 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 the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. (See § 200.450.) (b) The recipient's and subrecipient's financial management system must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a Federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. (4) Effective control over and accountability for all funds, property, and assets. The recipient or subrecipient must safeguard all assets and ensure they are used solely for authorized purposes. See § 200.303. … (6) Written procedures to implement the requirements of § 200.305 and (7) Written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. LlHEAP Performance Data Form (OMB No 0970-0449) – State grant recipients must submit this report by January 3lst regarding the prior Federal fiscal year. The first section of the report is the Grant recipient Survey that collects and reports data on sources and uses of LIHEAP funds. The Grant recipient Survey includes Section III: Estimated Sources of Funds and Section IV: Estimated Use of LIHEAP Funds. Note: that these are referencing obligated not expended funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. The Grantee Survey obligation amounts should be compared with the Carryover and Reallotment and FFR-425 reports. This reconciliation is needed to make sure the obligated balances for the program year being tested are accurate. Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) https://omb.report/icr/202211-0970-005 – As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Quarterly Performance and Management Report (OMB No. 0970-0589) https://omb.report/icr/202205-0970-017/doc/121847100 – Grant recipients must submit data and information about LIHEAP during the current FY, including success, challenges, needs and innovations. The quarterly reports focus on assisted households, performance management, obligation of funding, changes made due to anticipated increase in energy bills, collaboration with other utility programs, training and technical assistance needs. STATEMENT OF CONDITION As part of our audit procedures over the financial reporting requirements for LIHEAP program, we selected three reports submitted during our fiscal year. We noted that the administrative expenditures do not reconcile with the accounting information from PRIFAS. In addition, there are no written procedures describing internal controls over this requirement. We requested the LIHEAP Performance Data (OMB No 0970-0449), but no evidence of the report was provided. We obtained a copy of the Annual Report on Households Assisted by LlHEAP (OMB No. 0970-0060), but no supporting documentation regarding the information reported was provided. We requested two quarterly reports for the Quarterly Performance and Management Report (OMB No. 0970-0589) for the 2301LIEA grant, but no documentation was provided. QUESTIONED COSTS None. PERSPECTIVE INFORMATION This is a systematic deficiency. Procedures and internal controls manuals should provide for and ensure the segregation of duties, and the reconciliation of financial information reported to federal agencies against the accounting records used to prepare financial statements and SEFA. ADSEF failure to support reported amounts with verifiable documentation and the absence of independent review increases the risk of inaccurate or misstated financial data being reported to the Federal awarding agency. In relation to Special and Performance Reports, there are no proper controls over the data reported and the supporting information. STATEMENT OF CAUSE During our interviews and understanding of the internal controls over financial reporting, we noted that only one person prepares, submits and certifies the SF– 425 reports. No proper segregation of duties exists, that allows for validation of all accounting data before submitting the reports. In addition, the procedures manual for preparing reports does not establish a clear process for obtaining information, validating it, recording it, preparing it, and reporting it, as well as the responsibilities and segregation of duties to ensure that the reported information is consistent with ADSEF's accounting records. ADSEF lacks internal controls that allow for the timely validation and reconciliation of financial information. Furthermore, they lack a written procedures manual detailing the processes to follow in obtaining accounting data and reporting it to the Federal government, ensuring that the responsibility does not fall on a single individual. In relation to the Special and Performance Reports, the lack of written procedures and proper safeguarding of documentation does not allow for demonstrating compliance with the requirements of these reports. POSSIBLE ASSERTED EFFECT ADSEF does not ensure that the reports are accurate and traceable to the accounting database used to prepare their financial reports to the Federal Agencies and their financial statement. We were unable to evaluate internal controls and compliance over the Special and Performance Reports. ADSEF might not comply with the requirements of the program and not report it on time to the regulatory agencies. IDENTIFICATION OF REPEAT FINDING This is a repeat of a finding reported in the prior audit as Finding Numbers 2023-021/2023-051. RECOMMENDATIONS We recommend ADSEF to establish written procedures and internal controls manuals to provide and document the segregation of duties related to the reporting compliance requirement. In addition, in relation to the Special and Performance Reports create internal controls that provide for obtaining information, preparing reports, and filing evidence of reports.
FINDING REFERENCE NUMBER 2024-046 (See Finding Reference Number 2024-018) FEDERAL PROGRAMS (ALN – 93.558) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) (ALN – 93.560) PAYMENT TO TERRITORIES – ADULT U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 2022G996117 (Federal Award Year: 10/1/2021 – 9/30/2022) 2023G996117 (Federal Award Year: 10/1/2022 – 9/30/2023) 2022G9922PT (Federal Award Years: 10/1/2022 through 9/30/2025) 2301PRTABD (Federal Award Years: 10/1/2023 through 9/30/2026) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT REPORTING – FINANCIAL REPORTING TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA The 2 CFR 200 §200.302, Financial Management, establishes that: “(a) Each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State's funds. All recipient and subrecipient 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 the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. See § 200.450. (b) The recipient's and subrecipient's financial management system must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a Federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. (4) Effective control over and accountability for all funds, property, and assets. The recipient or subrecipient must safeguard all assets and ensure they are used solely for authorized purposes. See § 200.303. … (6) Written procedures to implement the requirements of § 200.305 and (7) Written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. STATEMENT OF CONDITION As part of our audit procedures over the reporting requirements for the Temporary Assistance for Needy Families (TANF) and Payment to Territories – Adult (PTTA) programs, we reviewed two ACF-196TR reports submitted during the fiscal year under audit. Our review disclosed deficiencies related to the accuracy, support, reconciliation, and timeliness of reported expenditures. Specifically, we noted the following: • Administrative expenditures for both TANF and PTTA are recorded under the same accounting account number and Assistance Listing Number associated with TANF. As a result, the PRIFA accounting system does not segregate administrative expenditures by federal award or Assistance Listing Number, limiting the ability to identify and track expenditures attributable to each program. • Amounts reported in the ACF-196TR reports could not be reconciled to the PRIFA accounting records, particularly for administrative expenditures. Upon request, management was unable to provide supporting schedules, reconciliations, or documentation demonstrating how the reported amounts were derived. Supporting information was prepared only after it was requested during the audit. • For grant award 2023G996117, reported expenditures in the quarterly report of September 30, 2023, that did not agree with the underlying accounting records. We identified differences of $7,266.40 in Line 6A (Work-Related Activities and Expenses), $1,745,668.00 in Line 5A (Basic Assistance), $1,645,366.55 in Line 6J (Administration), $2,007,611.62 in Line 3 (Transfer to SSBG), and $103,052.41 in Line 10 (Total Expenditures). In addition, the report was submitted after the applicable due date. • For grant award 2401PRTANF, reported expenditures in the June 30, 2024 quarterly report that also differed from the accounting records. We identified differences of $12,312.07 in Line 6A (Work-Related Activities and Expenses), $1,898,639.95 in Line 6J (Administration), $3,786,696.14 in Line 3 (Transfer to SSBG), and $1,902,297.08 in Line 10 (Total Expenditures). Furthermore, the report maintained by ADSEF did not contain evidence of the submission date; therefore, we were unable to determine whether the report was submitted within the required timeframe. QUESTIONED COSTS None. PERSPECTIVE INFORMATION This is a systematic deficiency. Procedures and internal controls manuals should provide for and ensure the segregation of duties, and the reconciliation of financial information reported to Federal agencies against the accounting records used to prepare financial statements and SEFA. In addition, the financial management system should provide to account separately the administrative expenditures incurred among all Federal programs administered. ADSEF failure to support reported amounts with verifiable documentation and the absence of independent review increases the risk of inaccurate or misstated financial data being reported to the Federal awarding agency. STATEMENT OF CAUSE During our interviews and understanding of the internal controls over financial reporting, we noted that only one person prepares, submits and certifies the ACF-196TR reports. No proper segregation of duties exists, that allows for validation of all accounting data before submitting the reports. In addition, the procedures manual for preparing reports does not establish a clear process for obtaining information, validating it, recording it, preparing it, and reporting it, as well as the responsibilities and segregation of duties to ensure that the reported information is consistent with ADSEF's accounting records. PRIFAS accounting data base as configured, does not provide for the administrative expenditures incurred from the TANF and Payment to Territories – Adult programs to be segregated. ADSEF lacks internal controls that allow for the timely validation and reconciliation of financial information. Furthermore, they lack a written procedures manual detailing the processes to follow in obtaining accounting data and reporting it to the Federal government, ensuring that the responsibility does not fall on a single individual. POSSIBLE ASSERTED EFFECT ADSEF does not ensure that the reports are accurate and traceable to the accounting database used to prepare their financial reports to the Federal Agencies and their financial statement. IDENTIFICATION OF REPEAT FINDING This is a repeat of a finding reported in the prior audit as Finding Numbers is 2023-025/2023-056. RECOMMENDATIONS We recommend ADSEF to establish written procedures and internal controls manuals to provide and document the segregation of duties related to the reporting compliance requirement. Additionally, work with the Puerto Rico Department of the Treasury to provide accounting records to segregate the administrative expenditures of both programs.
Condition: Expenditures for federal programs were not adequately reported on the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Compliance Reports. The actual expenditures to vendors were $1,163,327. The County reported $941,437, resulting in an understatement of $221,890. In addition, it was noted one vendor was reported under the wrong category in the amount of $135,409. This amount was reported as revenue loss and should have been reported as administrative expense. 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 resulted in noncompliance with grant requirements. Management Response: Chairman of the Board of County Commissioners: To correct this issue, the County will develop policy and procedures to timely and accurately track and report on federal funds. The policy and procedures will be reviewed, adopted, and monitored by the Board of County Commissioners. County Clerk: County will implement internal controls to ensure compliance with grant requirements. 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. Criteria: 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.
2024-011– EDUCATION STABILIZATION FUND - REPORTING – ALN 84.425 - MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE FINDING TYPE: MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE Finding 2024-011 Federal Program: Education Stabilization Fund ALN: 84.425 Federal Award Number(s) and Year(s): S425U210007, 2024 Federal Agency: U.S. Department of Education Pass Through Agency: North Dakota Department of Public Instruction Questioned Cost: N/A Condition Williston Basin Public School District No. 7 did not maintain documentation for the data that was submitted to the North Dakota Department of Public Instruction (NDDPI) for the state’s completion of the Annual Report for the Education Stabilization Fund program. We were able to obtain the information that was submitted from NDDPI; however, due to issues identified with the accuracy of underlying accounting records we were unable to determine if the information included in the report is accurate. Effect The School District may have reported incorrect data to NDDPI, which was then improperly reported to the U.S. Department of Education in the Annual Report on the use of Education Stabilization Funds. Cause Williston Basin Public School District No. 7 does not have sufficient procedures in place to ensure that support documentation for federal grants is maintained and tracked accurately. Criteria Per the grant agreement, "the LEA will comply with all reporting requirements, including those in Section 15011(b)(2) of Division B of the CARES Act, and submit required quarterly reports to the NDDPI at such time and in such manner and containing such information as the Secretary may subsequently require. (See also 2 CFR 200.327-200.329). Additional reporting may be required in the future, which may include: the methodology LEAs will use to provide services or assistance to students and staff in both public and non-public schools, the uses of funds by the LEAs or other entities and demonstration of their compliance with Section 18003(d), such as any use of funds addressing the digital divide, including securing access to home-based connectivity and remote-use devices, related issues in supporting remote learning for all students, including disadvantaged populations." Context Williston Basin Public School District No. 7 had ESSER expenses of $1,588,987.54 during the year. Repeat Finding Yes. See finding 2023-012. Recommendation We recommend that Williston Basin Public School District No. 7 maintain documentation for the data that is submitted to NDDPI for the completion of the Annual Report for the Educations Stabilization Fund. Williston Basin Public School District No. 7’s Response See Corrective Action Plan.
FINDING 2024-006 Subject: Title I Grants to Local Educational Agencies 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, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Matching, Level of Effort, Earmarking; Reporting; Special Tests and Provisions - Participation of Private School Children; Special Tests and Provisions - Annual Report Card, High School Graduation Rate; Special Tests and Provisions - Assessment Testing Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 39 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report for control activities - activities allowed or unallowed; allowable costs/cost principles; cash management; reporting; matching, level of effort, earmarking; and special tests and provisions - participation in private school children. The prior audit finding numbers were 2022-005, 2022-006, 2022-008, and 2022-009. Condition and Context Internal control is generally defined as a process affected by an entity's oversight body, management, and other personnel that provides reasonable assurance that the entity will achieve its objectives. For federal awards, nonfederal entities, such as the School Corporation, are required to establish and maintain internal control over federal awards to provide reasonable assurance that the entity will comply with applicable federal statutes, regulations, and the terms and conditions of its awards. Internal control is not a single event but an ongoing process that operates through five integrated components: Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring. Each component must function effectively, and the components must operate together in an integrated manner, for an internal control system to be effective. Deficiencies in the internal control system were identified across the five components and are described below. Control Environment - Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Matching, Level of Effort, Earmarking; Reporting; Special Tests and Provisions - Participation of Private School Children; Special Tests and Provisions - Annual Report Card, High School Graduation Rate; Special Tests and Provisions - Assessment Testing The School Corporation had not established a strong foundation for an effective internal control system. There was no demonstrated emphasis on the importance of internal controls or on compliance with federal program requirements. Risk Assessment - Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Matching, Level of Effort, Earmarking; Reporting; Special Tests and Provisions - Participation of Private School Children; Special Tests and Provisions - Annual Report Card, High School Graduation Rate; Special Tests and Provisions - Assessment Testing The School Corporation had not defined objectives necessary to identify risks or determine risk tolerances. Management did not identify, analyze, or respond to risks that could affect the achievement of objectives, including risks arising from significant changes to operations or the potential for fraud. Control Activities The School Corporation did not maintain sufficient financial records for its Title I programs. Although separate funds were established, expenditures were not accurately recorded, preventing the auditors from properly testing compliance with the federal requirements for the Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Matching, Level of Effort, Earmarking; Reporting; Special Tests and Provisions - Participation of Private School Children compliance requirements. Notable errors included payroll mapping errors, as well as unsupported reimbursement requests. INDIANA STATE BOARD OF ACCOUNTS 40 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenditures as reported on the Schedule of Expenditures of Federal Awards are based on reimbursements received during the audit period. To determine the specific expenditures associated with each reimbursement request the corresponding ledger activity or other applicable supporting documentation was requested. Based on the documentation provided, or lack thereof, it was determined that reimbursement requests were not prepared using expenditures recorded in the Title I funds. Instead, other undocumented or inconsistently retained records were used, and the amounts in those records did not align with the reimbursement requests submitted or the related fund activity. Of the 13 reimbursement claims submitted: There were 5 reimbursement requests totaling $854,889 filed in fiscal year 2022-2023 that had no supporting documentation, and the amounts requested did not agree with the disbursement activity recorded in the grant program funds. There were 8 reimbursement requests totaling $496,155 and received in 2023-2024 that had supporting documentation; however, the documentation agreed with reimbursement request amount in only 4 instances. For the other 4 reimbursement requests where documentation was provided, discrepancies totaling $15,982 were identified between the documentation and the amounts requested. Additionally, the documentation used to support 2023-2024 reimbursement requests did not correspond to the ledger activity recorded in the Title I program funds; instead, the School Corporation relied on separate individual payroll reports that were not tied to the program's financial records. Due to the lack of adequate documentation, we were unable to determine the validity of expenditures claimed for reimbursement, and, therefore, could not determine a population of expenditures to verify for compliance testing. This resulted in questioned costs totaling $1,351,044. Additional issues included: The former Chief Financial Officer did not direct the payroll clerk to allocate salaries and benefits for Title I personnel to the appropriate funds. As a result, salary and benefit costs were charged to the Title I funds for employees who did not work on the program, while costs for employees who did work on the program were charged to non-Title I funds. Receipt activity recorded in the Title I program funds did not always reflect actual Title I grant receipts. For example, receipts totaling $63,901 for the Supportive Effective Instruction State Grants program (formerly Improving Teacher Quality State Grants), Assistance Listings Number 84.367, were incorrectly recorded in the Title I fund. A separate fund was not created for the 2022-2023 grant project year as required by the pass-through entity; instead, an existing project year fund was used. Transfers totaling $993,763 in 2022-2023 and $73,107 in 2023-2024 were made into the Title I program funds from other funds or between Title I project years without adequate supporting documentation explaining the composition of the transfer amounts. Transfers totaling $650,150 in 2022-2023 were made out of the Title I program funds to other funds or other Title I project years, without sufficient supporting documentation identifying the nature of the transferred amounts. INDIANA STATE BOARD OF ACCOUNTS 41 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Information and Communication - Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Matching, Level of Effort, Earmarking; Reporting; Special Tests and Provisions - Participation of Private School Children; Special Tests and Provisions - Annual Report Card, High School Graduation Rate; Special Tests and Provisions - Assessment Testing The School Corporation had not established adequate communication methods or practices to ensure that reliable information was identified, captured, and communicated to the appropriate internal and external parties. Monitoring - Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Matching, Level of Effort, Earmarking; Reporting; Special Tests and Provisions - Participation of Private School Children; Special Tests and Provisions - Annual Report Card, High School Graduation Rate; Special Tests and Provisions - Assessment Testing The School Corporation did not perform ongoing or periodic evaluations to determine whether internal controls were operating effectively or to identify needed improvement. In addition, the School Corporation did not have a process in place to track or to follow-up on corrective actions written in response to audit findings. Due to the number and severity of the issues identified with the program's financial records and supporting documentation, we were unable to perform the procedures necessary to test the program for compliance. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following (see also §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . INDIANA STATE BOARD OF ACCOUNTS 42 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. See § 200.303. . . ." 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. . . ." Cause The School Corporation had not implemented an effective system of internal controls. Changes in key financial personnel, along with insufficient employee training, contributed to processes and procedures not being properly developed or consistently followed. Additionally, employees' salaries and benefits associated with the Title I programs were not mapped to the proper funds in the accounting software. Finally, reimbursement requests were completed based upon documentation, other than the ledger, that was not always retained or when retained did not agree with the amounts requested. Transfers in and out of Title I program funds did not contain sufficient supporting documentation to determine the specific purposes of the transfers Effect Because the five components of internal control were not properly designed or implemented, the School Corporation's internal control system could not be effective. As a result, general and fraud-related risks, as well as risks arising from significant operational changes, could negatively impact the School Corporation. Existing internal control deficiencies may continue undetected, and additional weaknesses may exist without being identified. Additionally, because the School Corporation did not establish an effective system of internal controls to ensure that the required documentation was obtained and retained, we were unable to obtain sufficient appropriate audit evidence to determine whether the School Corporation complied with the applicable federal program compliance requirements. This lack of documentation created a scope limitation for the audit and increased the risk that noncompliance, if present, may not have been detected. The inability to demonstrate compliance with federal requirements may affect the School Corporation's ability to support current program expenditures and may place eligibility for future federal funding at risk. Finally, salary and benefit expenditures were recorded to the Title I grant program funds for employees who were not involved with the program and expenditures for those involved with the program were recorded to non-Title I funds. Reimbursement requests could not be reconciled to the detailed ledger of expenditures. As such, a complete and accurate population of expenditures, that reconciled to the Schedule of Expenditures of Federal Awards or the financial statement could not be determined. INDIANA STATE BOARD OF ACCOUNTS 43 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs Questioned costs in the amount of $1,351,044 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation design and implement a system of internal controls, which would include policies and procedures related to the five components of internal control. Management should define clear objectives, identify and assess risks, and develop policies and procedures to address those risks. Regular monitoring should be conducted to ensure internal controls are operating effectively and deficiencies are addressed promptly. We also recommended that the School Corporation ensure employees' salaries and benefits are properly mapped within the accounting system. Additionally, we recommended that all documentation to support a reimbursement request be attached to the reimbursement request and reconciled to the ledger at the time of request. We also recommended that any necessary transfers contain sufficient supporting documentation. Finally, we recommended that the School Corporation maintain complete and accurate records for all grant funds and project years. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-008 Subject: Special Education Cluster (IDEA) Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-138-PN01, 23611-138-PN01, 24611-138-PN01, 22611-138-ARP, 22619-138-PN01, 23619-138-PN01, 24619-138-PN01, 22619-138-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Matching, Level of Effort, Earmarking; Period of Performance; Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding numbers were 2022-010, 2022-011, and 2022-012. Condition and Context Internal control is generally defined as a process affected by an entity's oversight body, management, and other personnel that provides reasonable assurance that the entity will achieve its objectives. For federal awards, nonfederal entities, such as the School Corporation, are required to establish and maintain internal control over federal awards to provide reasonable assurance that the entity will comply with applicable federal statutes, regulations, and the terms and conditions of its awards. INDIANA STATE BOARD OF ACCOUNTS 47 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Internal control is not a single event but an ongoing process that operates through five integrated components: Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring. Each component must function effectively, and the components must operate together in an integrated manner, for an internal control system to be effective. Deficiencies in the internal control system were identified across the five components and are described below. Control Environment The School Corporation had not established a strong foundation for an effective internal control system. There was no demonstrated emphasis on the importance of internal controls or on compliance with federal program requirements. Risk Assessment The School Corporation had not defined objectives necessary to identify risks or determine risk tolerances. Management did not identify, analyze, or respond to risks that could affect the achievement of objectives, including risks arising from significant changes to operations or the potential for fraud. Control Activities The School Corporation receives federal funding through the Special Education Cluster (IDEA), including the Special Education Grants to States and Special Education Preschool Grants programs, administered by the Indiana Department of Education. These funds are subject to federal requirements regarding activities allowed or unallowed; allowable costs/cost principles; cash management; matching, level of effort, earmarking; period of performance; reporting; and financial documentation. The School Corporation did not maintain sufficient financial records for its special education programs. Although separate funds were established expenditures were not accurately recorded, preventing the auditors from properly testing compliance with the federal requirements for the Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Matching, Level of Effort, Earmarking; Period of Performance; and Reporting compliance requirements. Notable errors included payroll and fund mapping errors, as well as unsupported reimbursement requests. Salaries and benefits for special education staff were incorrectly mapped, resulting in expenditures being charged to the wrong funds. Additionally, program reimbursement requests were not based upon ledger expenditures and relied on documentation that was either missing or inconsistent with the amounts claimed. Due to insufficient documentation, most expenditures claimed for reimbursement could not be verified, resulting in questioned costs totaling $1,694,906. Of the 23 claims for reimbursement filed: There were 11 reimbursements totaling $1,289,892 that lacked supporting documentation and the amount claimed did not agree with the ledger disbursement activity. There were 11 reimbursements totaling $404,904 that either agreed with the grant fund ledger activity or documentation was retained to support the amount claimed for reimbursement. INDIANA STATE BOARD OF ACCOUNTS 48 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) There was 1 reimbursement totaling $110 that differed from the amount claimed by $1,837, with the amount claimed being less than the supporting documentation. Additional issues included: Receipt activity within the funds was not always reflective of the program grant money received. Special education program receipts totaling $47,913 were receipted to nonspecial education grant funds. A separate fund was not created to identify and record financial activity for each grant project year as required by the pass-through entity. Specifically, separate funds were not created for the Special Education Preschool grant for project years 2022 and 2023. Transfers between funds were made to address deficit fund balances, either due to financial activity being misallocated or errors discovered in transaction recording. However, supporting documentation for these corrections was not kept. In fiscal year 2022-2023, a total of $222,602 was moved into program funds from other sources or between various special education grant project year funds, while $6,653 was transferred in during 2023-2024. Conversely, funds totaling $699,655 in 2022-2023 and $722,283 in 2023-2024 were transferred out of program grant funds to other accounts or between special education grant project year funds. Information and Communication The School Corporation had not established adequate communication methods or practices to ensure that reliable information was identified, captured, and communicated to the appropriate internal and external parties. Monitoring The School Corporation did not perform ongoing or periodic evaluations to determine whether internal controls were operating effectively or to identify needed improvement. In addition, the School Corporation did not have a process in place to track or to follow-up on corrective actions written in response to audit findings. Due to the number and severity of the issues identified with the program's financial records and supporting documentation, we were unable to perform the procedures necessary to test the program for compliance. 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 49 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following (see also §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. See § 200.303. . . ." 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. . . ." Cause The School Corporation had not implemented an effective system of internal controls. Changes in key financial personnel, along with insufficient employee training, contributed to processes and procedures not being properly developed or consistently followed. Additionally, employees' salaries and benefits associated with the special education programs were not mapped to the proper funds in the accounting software. Finally, reimbursement requests were completed based on documentation, other than the ledger, that was not always retained or when retained did not agree with the amounts being requested. Effect Because the five components of internal control were not properly designed or implemented, the School Corporation's internal control system could not be effective. As a result, general and fraud-related risks, as well as risks arising from significant operational changes, could negatively impact the School Corporation. Existing internal control deficiencies may continue undetected, and additional weaknesses may exist without being identified. INDIANA STATE BOARD OF ACCOUNTS 50 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Additionally, because the School Corporation did not establish an effective system of internal controls to ensure that the required documentation was obtained and retained, we were unable to obtain sufficient appropriate audit evidence to determine whether the School Corporation complied with the applicable federal program compliance requirements. This lack of documentation created a scope limitation for the audit and increased the risk that noncompliance, if present, may not have been detected. The inability to demonstrate compliance with federal requirements may affect the School Corporation's ability to support current program expenditures and may place eligibility for future federal funding at risk. Finally, salary and benefit expenditures were recorded to the special education grant program funds for employees who were not involved with the program and expenditures for those involved with the program were recorded to nonspecial education funds. Reimbursement requests could not be reconciled to the detailed ledger of expenditures. As such, a complete and accurate population of expenditures, that reconciled to the Schedule of Expenditures of Federal Awards or the financial statement could not be determined. Questioned Costs Questioned costs in the amount of $1,694,906 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation design and implement a system of internal controls, which would include policies and procedures related to the five components of internal control. Management should define clear objectives, identify and assess risks, and develop policies and procedures to address those risks. Regular monitoring should be conducted to ensure internal controls are operating effectively and deficiencies are addressed promptly. We also recommended that the School Corporation ensure employees' salaries and benefits are properly mapped within the accounting system. Additionally, we recommended that all documentation to support a reimbursement request be attached to the reimbursement request and reconciled to the ledger at the time of request. We also recommended that any necessary transfers contain sufficient supporting documentation. Finally, we recommended that the School Corporation maintain complete and accurate records for all grant funds and project years. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund Federal Agency: Department of Education Federal Programs: 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 Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Equipment and Real Property Management; Matching, Level of Effort, Earmarking; Reporting; Special Tests and Provisions - Wage Rate Requirements; Special Tests and Provisions - Participation of Private School Children Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report for activities allowed or unallowed, allowable costs/cost principles, cash management, equipment and real property management, and reporting. The prior audit finding numbers were 2022-013, 2022-014, 2022-015, and 2022-016. Condition and Context Internal control is generally defined as a process affected by an entity's oversight body, management, and other personnel that provides reasonable assurance that the entity will achieve its objectives. For federal awards, nonfederal entities, such as the School Corporation, are required to establish and maintain internal control over federal awards to provide reasonable assurance that the entity will comply with applicable federal statutes, regulations, and the terms and conditions of its awards. Internal control is not a single event but an ongoing process that operates through five integrated components: Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring. Each component must function effectively, and the components must operate together in an integrated manner, for an internal control system to be effective. Deficiencies in the internal control system were identified across the five components and are described below. Control Environment The School Corporation had not established a strong foundation for an effective internal control system. There was no demonstrated emphasis on the importance of internal controls or on compliance with federal program requirements. Risk Assessment The School Corporation had not defined objectives necessary to identify risks or determine risk tolerances. Management did not identify, analyze, or respond to risks that could affect the achievement of objectives, including risks arising from significant changes to operations or the potential for fraud. INDIANA STATE BOARD OF ACCOUNTS 52 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Control Activities The School Corporation did not maintain sufficient financial records for its COVID-19 - Education Stabilization Fund program. Although separate funds were established, expenditures were not accurately recorded, preventing the auditors from properly testing compliance with the federal requirements for Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Cash Management; Equipment and Real Property Management; Matching, Level of Effort, Earmarking; Reporting; Special Tests and Provisions - Wage Rate Requirements; and Special Tests and Provision - Participation of Private School Children compliance requirements. Notable errors included expenditures recorded to the grant funds in the amount of $1,623,704 more than the grant amount awarded, as well as unsupported reimbursement requests. The School Corporation attempted to identify expenditures that they no longer wanted to be considered costs under the grant program to correct the overspending. However, instead of reclassifying the expenditures to the proper funds, monies were transferred into the grant funds from other School Corporation funds. The documentation to support the expenditures to be reallocated was not complete as $296,202 of the transfer amount could not be associated with specific expenditure transactions. Additionally, $839,096 in transactions identified to be reclassified were associated with the prior fiscal year 2021-2022 financial activity. After considering transactions recorded in the fund during 2022-2023 and 2023-2024 that were reallocated to other funds the remaining expenditures in the grant program funds were $138,134 less than the total grant funds claimed for reimbursement during the audit period. Due to insufficient documentation, expenditures claimed for reimbursement could not be verified, resulting in questioned costs totaling $1,654,481. Information and Communication The School Corporation had not established adequate communication methods or practices to ensure that reliable information was identified, captured, and communicated to the appropriate internal and external parties. Monitoring The School Corporation did not perform ongoing or periodic evaluations to determine whether internal controls were operating effectively or to identify needed improvement. In addition, the School Corporation did not have a process in place to track or to follow-up on corrective actions written in response to audit findings. Due to the number and severity of the issues identified with the program's financial records and supporting documentation, we were unable to perform the procedures necessary to test the program for compliance. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 53 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following (see also §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. See § 200.303. . . ." 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. . . ." Cause The School Corporation had not implemented an effective system of internal controls. Changes in key financial personnel, along with insufficient employee training, contributed to processes and procedures not being properly developed or consistently followed. Additionally, expenditures were not properly reviewed to determine if costs were properly recorded to grant funds. Finally, reimbursement requests were completed based on documentation, other than the ledger, that was not always retained or when retained did not agree with the amounts being requested. INDIANA STATE BOARD OF ACCOUNTS 54 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Because the five components of internal control were not properly designed or implemented, the School Corporation's internal control system could not be effective. As a result, general and fraud-related risks, as well as risks arising from significant operational changes, could negatively impact the School Corporation. Existing internal control deficiencies may continue undetected, and additional weaknesses may exist without being identified. Additionally, because the School Corporation did not establish an effective system of internal controls to ensure that the required documentation was obtained and retained, we were unable to obtain sufficient appropriate audit evidence to determine whether the School Corporation complied with the applicable federal program compliance requirements. This lack of documentation created a scope limitation for the audit and increased the risk that noncompliance, if present, may not have been detected. The inability to demonstrate compliance with federal requirements may affect the School Corporation's ability to support current program expenditures and may place eligibility for future federal funding at risk. Finally, reimbursement requests could not be reconciled to the detailed ledger of expenditures. As such, a complete and accurate population of expenditures, that reconciled to the Schedule of Expenditures of Federal Awards or the financial statement could not be determined. Questioned Costs Questioned costs in the amount of $1,654,481 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation design and implement a system of internal controls, which would include policies and procedures related to the five components of internal control. Management should define clear objectives, identify and assess risks, and develop policies and procedures to address those risks. Regular monitoring should be conducted to ensure internal controls are operating effectively and deficiencies are addressed promptly. We also recommended that the School Corporation review expenditures and financial ledger reports to ensure activity is recorded to the correct fund. Additionally, we recommended that all documentation to support a reimbursement request be attached to the reimbursement request and reconciled to the ledger at the time of request. Finally, we recommended that the School Corporation maintain complete and accurate records for all grant funds and project years. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing No. 21.027 U.S. Department of Treasury Missouri Primary Care Association Criteria or specific requirement – Reporting (2 CFR 200.329) Condition – The Organization’s internal controls over compliance were not able to ensure progress reporting required to be submitted to the pass-through entity was completed timely. Cause – The Organization does not have internal controls over compliance in place to ensure all grant reporting requirements are satisfied timely. Effect or potential effect – The Organization did not submit the required quarterly and annual performance reports in a timely manner. Questioned costs – None Context – The Organization is required to submit quarterly status reports and an annual performance report to the pass-through entity in a timely manner. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should consider implementing a grant reporting calendar for all grants with reporting requirements. Views of responsible officials and planned corrective actions – Our quarterly status progress report was inadvertently sent two days past the due date in to our state office. We have corrected this by implementing controls by placing the quarterly due dates on our calendars so these due dates are no longer overlooked going forward.
Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing No. 21.027 U.S. Department of Treasury Missouri Primary Care Association Criteria or specific requirement – Reporting (2 CFR 200.329) Condition – The Organization’s internal controls over compliance were not able to ensure progress reporting required to be submitted to the pass-through entity was completed timely. Cause – The Organization does not have internal controls over compliance in place to ensure all grant reporting requirements are satisfied timely. Effect or potential effect – The Organization did not submit the required quarterly and annual performance reports in a timely manner. Questioned costs – None Context – The Organization is required to submit quarterly status reports and an annual performance report to the pass-through entity in a timely manner. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should consider implementing a grant reporting calendar for all grants with reporting requirements. Views of responsible officials and planned corrective actions – Our quarterly status progress report was inadvertently sent two days past the due date in to our state office. We have corrected this by implementing controls by placing the quarterly due dates on our calendars so these due dates are no longer overlooked going forward.
Assistance Listing, Federal Agency, and Program Name - 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - According to 2 CFR section 200.329, entities are required to submit performance reports. Management is responsible for ensuring expenses are allowable and for the accuracy of the reports submitted. Condition - Controls in place were not adequate to ensure expenses were allowable and reported in the proper categories on the performance reports. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During reporting testing, we noted certain expenses were reported in incorrect categories. During our review of the report submitted for the period of October through December 2023, we noted $531,349 of premium pay costs were included in category 4.1, Public Sector Employees, but should have been included in category 6.1, Provision of Government Services, since premium pay is no longer an allowable expense in category 4.1. Cause and Effect - While the Charter Township did have controls in place around reporting and allowability of expenses, they were not sufficient to ensure expenses were properly recorded on the report in line with changing requirements under the terms of the grant. As a result, reports were not in compliance. Recommendation - We recommend the Charter Township ensure the effectiveness of controls to ensure expenditures get reported properly. Views of Responsible Officials and Corrective Action Plan - The Charter Township agrees with the findings. The Charter Township's management will ensure procedures are put into place to ensure expenditures are reported under the correct categories.
Assistance Listing, Federal Agency, and Program Name - 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - According to 2 CFR section 200.329, entities are required to submit performance reports. Management is responsible for ensuring expenses are allowable and for the accuracy of the reports submitted. Condition - Controls in place were not adequate to ensure expenses were allowable and reported in the proper categories on the performance reports. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During reporting testing, we noted certain expenses were reported in incorrect categories. During our review of the report submitted for the period of October through December 2023, we noted $531,349 of premium pay costs were included in category 4.1, Public Sector Employees, but should have been included in category 6.1, Provision of Government Services, since premium pay is no longer an allowable expense in category 4.1. Cause and Effect - While the Charter Township did have controls in place around reporting and allowability of expenses, they were not sufficient to ensure expenses were properly recorded on the report in line with changing requirements under the terms of the grant. As a result, reports were not in compliance. Recommendation - We recommend the Charter Township ensure the effectiveness of controls to ensure expenditures get reported properly. Views of Responsible Officials and Corrective Action Plan - The Charter Township agrees with the findings. The Charter Township's management will ensure procedures are put into place to ensure expenditures are reported under the correct categories.
FINDING 2023-003 Assistance Listing Number 21.023 COVID-19 Emergency Rental Assistance Program Federal Agency U.S. Department of Treasury Pass-through Agency Not applicable Award Numbers / Years ERA2 City Department Department of Housing (DOH) Criteria: Under the requirements of 2CFR 200.329, the non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. The U.S. Treasury requires program performance reports to be filed quarterly. Condition/Context: Two out of the four quarterly ERA Compliance reports were sampled. It was noted that DOH did not file the second quarter report on a timely basis. The portal did not allow a report to be filed after the due date. The sample was not statistically valid. Effect: DOH was not in compliance with the reporting guidelines for the program. Questioned Costs: Not applicable. Cause: DOH did not have a process put in place to ensure that each required quarterly performance report was filed by the deadline. Recommendation: We recommend that DOH review its reporting process to ensure that reports are filed in a timely basis. Views of Responsible Officials: See Corrective Action Plan.
FINDING 2023-003 Assistance Listing Number 21.023 COVID-19 Emergency Rental Assistance Program Federal Agency U.S. Department of Treasury Pass-through Agency Not applicable Award Numbers / Years ERA2 City Department Department of Housing (DOH) Criteria: Under the requirements of 2CFR 200.329, the non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. The U.S. Treasury requires program performance reports to be filed quarterly. Condition/Context: Two out of the four quarterly ERA Compliance reports were sampled. It was noted that DOH did not file the second quarter report on a timely basis. The portal did not allow a report to be filed after the due date. The sample was not statistically valid. Effect: DOH was not in compliance with the reporting guidelines for the program. Questioned Costs: Not applicable. Cause: DOH did not have a process put in place to ensure that each required quarterly performance report was filed by the deadline. Recommendation: We recommend that DOH review its reporting process to ensure that reports are filed in a timely basis. Views of Responsible Officials: See Corrective Action Plan.