Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "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 Federal awards that are renewed quarterly or annually, from the date of the 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." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "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 Federal awards that are renewed quarterly or annually, from the date of the 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." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "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 Federal awards that are renewed quarterly or annually, from the date of the 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." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "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 Federal awards that are renewed quarterly or annually, from the date of the 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." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Federal Program: ALN 14.218 - Community Development Block Grants/Entitlement Grants Category: Compliance/Internal control Compliance Requirement: Allowable Costs/Cost Principles Criteria: As part of the standards for documentation of personnel expenses (2 CFR §200.430 (i)), it is required that charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed and be supported by a system of internal control that ensures accuracy, allowability, and proper allocation. According to the record retention requirements (2 CFR §200.334), recipients and subrecipients are required to retain all records for three years from the date of submission of their final financial report, or from the date of submission of the respective reports if the award is renewed quarterly or annually. The federal regulations require employers to verify the identity and employment authorization of individuals hired for employment in the United States using the Employment Eligibility Verification form (I-9). The EEOC's Enforcement Guidance on Harassment in the Workplace recommends that employers periodically update their sexual harassment policies and conduct regular training to ensure compliance with federal antidiscrimination laws. 2 CFR §200.112 requires that Federal agencies establish conflict of interest policies for Federal awards. Recipients or subrecipients must disclose in writing any potential conflict of interest to the Federal agency or pass-through entity in accordance with the established Federal agency policies. Regular updates to conflict-of-interest certifications are recommended to ensure ongoing compliance. As part of the BGCPR recruitment, selection, and hiring process, it is required that the employee file includes a copy of form I-9 and a signed copy of the job description. The protocol for disclosure of conflicts of interest establishes that as part of the recruitment procedures and on an annual basis, all candidates for the board of directors, management teams, employees, and, in certain cases, investors and donors are required to complete a conflict-of-interest disclosure form. Condition: There were significant gaps in the documentation of employee files, which pose potential noncompliance risks. Cause: Lack of monitoring procedures to ascertain compliance with federal, local and internal requirements.Effect or potential effect: Failure to maintain proper documentation can result in non-compliance with federal regulations and organizational policies, potentially leading to legal penalties and ethical breaches. Questioned costs: Not determined Context: The allowable activities/cost test revealed the following: • One (1) of fifty (50) employees’ files tested did not have a copy of the Employment eligibility verification form (I- 9) • Nineteen (19) of fifty (50) employees’ files tested did not have a copy of the signed job description. • Forty-nine (49) of fifty (50) employees’ files tested did not have evidence of certification regarding compliance with conflicts of interest protocol. • Twenty-nine (29) of fifty (50) employees’ files tested did not have evidence of annual training of sexual harassment. Recommendation: We recommended that BGCPR implement comprehensive record retention policies and ensure strict adherence to established procedures. Additionally, BGCPR should establish monitoring procedures to ascertain the completeness of employee files in compliance with regulatory requirements. Views of responsible officials: BGCPR acknowledges that document retention policy does not comply with the requirements set forth in Title 2 of the Code of Federal Regulations (2 CFR §200.334). This regulation requires that all financial records, supporting documents, statistical data, and other files related to federal grants be retained for a minimum period of three years from the date of submission of the final financial report. In the absence of this policy, BGCPR exposes itself to risks of non-compliance and possible sanctions during federal audits or reviews. Therefore, it is considered a priority to develop and implement a document retention policy that ensures compliance with this regulation and strengthens institutional transparency and accountability. As a corrective measure, BGCPR will take the following actions and will anticipate completing on June 30, 2025: a. Establish clear guidelines for the creation, storage, access, updating, and disposal of records. b. Define retention periods in accordance with legal requirements. c. Develop periodic monitoring procedures to verify record completeness and compliance. d. Implement scheduled internal reviews and standardized checklists. e. Assign specific responsibilities to Human Resources personnel for policy enforcement.
Criteria or Specific Requirement: In accordance with the grant agreements and applicable federal record retention standards (2 CFR 200.334), recipients of federal funds must maintain all records pertinent to the grant—including required progress and financial reports—for a minimum of three years from the date of submission of the final expenditure report. Condition and Context: Solvista Health did not retain certain key documents required to be retained under federal regulation and specific grant agreements. Specifically, Solvista Health was unable to provide quarterly reports, expenditure reimbursement packets submitted to the grantors, project expenditure reports, or other grant-related records necessary to demonstrate compliance with federal reporting and record retention standards under the federal programs. Questioned Costs: N/A Cause: Solvista Health did not implement adequate internal controls to ensure that submitted reports and expenditure reimbursement packets were archived and retained in accordance with grant and federal requirements. Effect: The absence of these records could impede the ability to verify proper grant administration and verify submitted expenditures were allowable costs incurred in accordance with the federal award agreement, which could impact future funding eligibility. It also represents a potential noncompliance with federal grant requirements. Identification as a Repeat Finding: Not a repeat finding. Recommendation: Solvista Health should strengthen its document retention policies and processes and implement internal controls to ensure that all required grant reports are consistently reviewed, approved, submitted, retained and retrievable for the required retention period.
Criteria or Specific Requirement: In accordance with the grant agreements and applicable federal record retention standards (2 CFR 200.334), recipients of federal funds must maintain all records pertinent to the grant—including required progress and financial reports—for a minimum of three years from the date of submission of the final expenditure report. Condition and Context: Solvista Health did not retain certain key documents required to be retained under federal regulation and specific grant agreements. Specifically, Solvista Health was unable to provide quarterly reports, expenditure reimbursement packets submitted to the grantors, project expenditure reports, or other grant-related records necessary to demonstrate compliance with federal reporting and record retention standards under the federal programs. Questioned Costs: N/A Cause: Solvista Health did not implement adequate internal controls to ensure that submitted reports and expenditure reimbursement packets were archived and retained in accordance with grant and federal requirements. Effect: The absence of these records could impede the ability to verify proper grant administration and verify submitted expenditures were allowable costs incurred in accordance with the federal award agreement, which could impact future funding eligibility. It also represents a potential noncompliance with federal grant requirements. Identification as a Repeat Finding: Not a repeat finding. Recommendation: Solvista Health should strengthen its document retention policies and processes and implement internal controls to ensure that all required grant reports are consistently reviewed, approved, submitted, retained and retrievable for the required retention period.
Criteria or Specific Requirement: In accordance with the grant agreements and applicable federal record retention standards (2 CFR 200.334), recipients of federal funds must maintain all records pertinent to the grant—including required progress and financial reports—for a minimum of three years from the date of submission of the final expenditure report. Condition and Context: Solvista Health did not retain certain key documents required to be retained under federal regulation and specific grant agreements. Specifically, Solvista Health was unable to provide quarterly reports, expenditure reimbursement packets submitted to the grantors, project expenditure reports, or other grant-related records necessary to demonstrate compliance with federal reporting and record retention standards under the federal programs. Questioned Costs: N/A Cause: Solvista Health did not implement adequate internal controls to ensure that submitted reports and expenditure reimbursement packets were archived and retained in accordance with grant and federal requirements. Effect: The absence of these records could impede the ability to verify proper grant administration and verify submitted expenditures were allowable costs incurred in accordance with the federal award agreement, which could impact future funding eligibility. It also represents a potential noncompliance with federal grant requirements. Identification as a Repeat Finding: Not a repeat finding. Recommendation: Solvista Health should strengthen its document retention policies and processes and implement internal controls to ensure that all required grant reports are consistently reviewed, approved, submitted, retained and retrievable for the required retention period.
Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,152 items totaling $1,077,416 • ALN No. 93.788 – 1,222 items totaling $2,537,080 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 41 items totaling $25,810, including projected errors over the total population totaling $191,145 • ALN No. 93.788 - 10 items totaling $72,347, including projected errors over the total population totaling $207,012 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $25,810 • ALN No. 93.788 - $72,347 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Repeat finding (see 2023-003) Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,152 items totaling $1,077,416 • ALN No. 93.788 – 1,222 items totaling $2,537,080 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 41 items totaling $25,810, including projected errors over the total population totaling $191,145 • ALN No. 93.788 - 10 items totaling $72,347, including projected errors over the total population totaling $207,012 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $25,810 • ALN No. 93.788 - $72,347 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Repeat finding (see 2023-003) Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
Criteria: In accordance with 2 CFR § 200.334, recipients and subrecipients of federal awards are required to retain all records pertinent to a federal award for a period of three years from the date of submission of the final expenditure or financial report. These records include, but are not limited to, financial records, supporting documentation, statistical records, and all other records pertinent to the federal award. The County is expected to retain copies of all grant agreements to ensure it can identify and comply with all applicable terms, conditions, and regulatory requirements associated with the funding. Condition: CLA observed that the County did not retain copies of the grant agreements for the Home Partnership Investment Program, and the Local Assistance and Tribal Consistency Fund Program. Questioned costs: None noted. Context: CLA was unable to obtain the grant agreements for the Home Partnership Investment Program, and the Local Assistance and Tribal Consistency Fund Program, as the County was unable to provide copies upon request. Cause: The management was unable to retain copies of the grant agreements due to the considerable passage of time since their issuance. Effect: Due to the absence of the original grant agreements, the County may not be fully aware of, or in compliance with, all applicable grant requirements. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management establish and maintain a formal process for the retention and organization of all grant-related documentation. This process should ensure that key documents are securely stored, easily accessible, and periodically reviewed to support ongoing compliance with grant requirements. Additionally, the County should work with granting agencies to obtain copies of any missing agreements and perform a comprehensive review to identify and address any outstanding compliance requirements. Views of responsible officials: There is no disagreement with the audit finding.
Criteria: In accordance with 2 CFR § 200.334, recipients and subrecipients of federal awards are required to retain all records pertinent to a federal award for a period of three years from the date of submission of the final expenditure or financial report. These records include, but are not limited to, financial records, supporting documentation, statistical records, and all other records pertinent to the federal award. The County is expected to retain copies of all grant agreements to ensure it can identify and comply with all applicable terms, conditions, and regulatory requirements associated with the funding. Condition: CLA observed that the County did not retain copies of the grant agreements for the Home Partnership Investment Program, and the Local Assistance and Tribal Consistency Fund Program. Questioned costs: None noted. Context: CLA was unable to obtain the grant agreements for the Home Partnership Investment Program, and the Local Assistance and Tribal Consistency Fund Program, as the County was unable to provide copies upon request. Cause: The management was unable to retain copies of the grant agreements due to the considerable passage of time since their issuance. Effect: Due to the absence of the original grant agreements, the County may not be fully aware of, or in compliance with, all applicable grant requirements. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management establish and maintain a formal process for the retention and organization of all grant-related documentation. This process should ensure that key documents are securely stored, easily accessible, and periodically reviewed to support ongoing compliance with grant requirements. Additionally, the County should work with granting agencies to obtain copies of any missing agreements and perform a comprehensive review to identify and address any outstanding compliance requirements. Views of responsible officials: There is no disagreement with the audit finding.
2024-001: Department of Health and Human Services - Temporary Assistance for Needy Families (TANF), Federal Assistance Listing #93.558; Pass Through Virginia Department of Social Services, Pass Through Entity Identifying Number BEN-21-054. Criteria: The Organization should have processes and procedures in place to keep and maintain client eligibility records, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, we noted that the Organization was unable to locate records substantiating the eligibility of clients served. Context: During testing, the Organization was unable to find supporting eligibility records for 31 out of the 60 samples that received services as part of a federal program. The sample was not intended to be, and was not, a statistically valid sample. Cause/Effect: Internal control processes over proper maintenance of clients’ records were not operating effectively, causing documentation to not be located. Questioned Costs: Unknown. Identification of Repeat Finding: Repeat Finding 2023-003. Recommendation: We recommend procedures are implemented to ensure proper maintenance of client records. Views of Responsible Officials: Management agrees with the recommendation and will implement stronger processes to ensure that records confirming the eligibility of program participants are obtained and properly maintained. All program staff will receive updated training on eligibility requirements, supporting documents to track such requirements, and supports throughout the year to ensure eligibility requirements are met and documented. Documents will also be reviewed regularly to ensure completeness against eligibility requirements. This process will be led by the Vice President of Family Empowerment and Self Sufficiency with support from operational and compliance staff.
2024-002: Department of Health and Human Services - Temporary Assistance for Needy Families (TANF), Federal Assistance Listing # 93.558; Pass Through Virginia Department of Social Services, Pass Through Entity Identifying Number BEN-21-054. Criteria: The Organization should have effective policies and procedures in place to ensure there is proper documentation supporting funds were used in compliance with the federal award, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, it was noted that there was not an effective process in place to keep and maintain the required records to support pay-for-performance outputs and outcomes. Context: The Organization was unable to provide documentation supporting the allowability of 6 of the 60 samples selected for testing. Cause/Effect: Internal control processes over maintenance of records supporting pay-for-performance outcomes and ouputs were not operating effectively from July 2023 through June 2024. Questioned Costs: $6,800 Identification of Repeat Finding: N/A Recommendation: We recommend that the Organization implements a review process to ensure that documentation is retained to support pay-for-performance outputs and outcomes submitted to the grantor. Views of Responsible Officials: Management agrees with the recommendation and will implement stronger review processes to ensure proper documentation is in place to support program activities and reports submitted to the grantor. All staff charged with maintaining client documentation will receive updated training on recordkeeping requirements, supporting documents specifying such requirements, and supports throughout the year to ensure documents are properly maintained and verified. Documents will be reviewed regularly for completeness and specifically cross-checked with quarterly report and invoice information directly by program leadership prior to submission. This process will be led by the Vice President of Family Empowerment and Self Sufficiency with support from operational and compliance staff.
Finding 2024-002: Failure to Follow Recordkeeping Requirements for Expenditures (Material Weakness) Federal Agency: United States Department of Agriculture Federal Program Name: COVID-19 - Pandemic Relief Activities: Local Food Purchase Agreements with States, Tribes, and Local Governments Assistance Listing Number: 10.182 Pass-Through Entity: State of Florida Department of Agriculture Compliance Requirement: Allowable Costs/Cost Principles Criteria: 2 CFR Section 200.334, requires recipients and subrecipients to retain all Federal award records for three years from the date of submission of their final financial reports (quarterly or annually). Records include, but are not limited to, financial records, supporting documentation, and statistical information. Additionally, 2 CFR Section 200.403, requires that costs must meet certain criteria to be allowable under federal awards, specifically 2 CFR Section 200.403(g), requires adequate documentation of those costs. Condition: During our testing, the Organization was unable to provide appropriate supporting documentation that evidenced a proper activity was conducted using federal funding, and further we could not determine if the costs incurred were allowable. Additionally, we noted that the Organization did not establish adequate internal controls to ensure supporting documentation was maintained to evidence that compliance was achieved. Cause: The Organizations internal controls were not effectively designed over recordkeeping of food purchases. Known Questioned Costs: $166,610 Context: The total sample size was 100 items of expense, which was determined to be a statistically valid sample. 10 out of the 100 items tested were not supported by appropriate documentation. 5 out of 100 items tested included freight costs that were included in the food costs. Freight should have been separated and classified as an administrative cost. These items resulted in the questioned costs calculated above and the noncompliance reported. The total population of expenditures charged to the federal program, from which our sample was selected, was $14,401,876. Effect: Federal funds may have been used for unallowable costs and therefore the purpose of the award may not have been met. Overall, this results in noncompliance with federal award requirements. Recommendation: We recommend the Organization evaluate its internal controls over allowable costs, recordkeeping and recording of federal expenditures and implement internal control procedures to ensure documentation is appropriately maintained for the required timeframe. Ongoing monitoring of the controls designed should be established to ensure future failures are minimized.
Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID 19 ARPA Local Fiscal Recovery EXP Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Various Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-OPM20600-29669 Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires allowable costs to be adequately documented and records be retained for a minimum of three years from the date of submission of the final expenditure report. Condition: The Town does not have adequate controls in place to ensure supporting documentation is retained for expenditures that are charged to the grant. Questioned costs: None Context: During our testing, it was noted that the Town could not provide documentation to support that one invoice totaling $10,975 charged to the grant was reviewed and approved as an allowable cost to the grant. Cause: The Town did not retain documentation that the expenditure was an approved cost of the grant. Effect: We noted no instances of noncompliance with the provisions of allowable costs, however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend the Town design controls to ensure all documentation is retained in accordance with the UG record retention requirements under 2 CFR 200.334. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 22-23, SY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 2022-003. Condition and Context The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Vendor Transactions A sample of 61 vendor transactions from the Food Service fund was selected for testing to verify the transactions were for allowable activities and costs under the Child Nutrition programs. There were 3 of the 61 transactions, totaling $3,698, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost for the food service program. In addition, 12 of the 61 vendor transactions, totaling $427, were refunds of student meal accounts that should have been paid out of the Prepaid Food fund. Of the 61 vendor transactions, there was 1 in the amount of $536 that was not related to food service. Payroll Transactions During testing, stipends totaling $1,142 were paid to 4 employees with no documentation to show support or approval of the stipend amount. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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 Federal awards that are renewed quarterly or annually, from the date of the 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . INDIANA STATE BOARD OF ACCOUNTS 22 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (g) Be adequately documented. . . ." Cause Due to turnover of staffing in both the food service personnel and the School Corporation's administrative office, an effective system of internal controls was not established that would have ensured compliance, or that would have ensured supporting documentation would have been maintained and made available for audit, with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect Without a proper system in place, noncompliance remained undetected, resulting in grant expenditures being spent for unallowable costs and without the proper supporting documentation. Noncompliance with grant agreement and the Activities Allowed or Unallowed and the Allowable Cost/Costs Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs We identified $5,803 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls to ensure that expenditures made from federal awards are allowable per the terms and conditions of the federal award as well as the Allowable Costs/Cost Principles compliance requirement and that adequate supporting documentation is retained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: Special Education Cluster (IDEA) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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): 21611-045-PN01, 22611-045-PN01, 22611-045-ARP, 21619-045-PN01, 22619-045-PN01, 22619-045-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 26 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-006. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls to ensure that proper documentation was retained for audit. A sample of 60 expenditures made from the School Corporation's Special Education funds during the audit period was selected for testing. Of the sample of 60, there were 47 transactions that were fringe benefit claims for which there was no detail to identify the employees included in the payment amount. In addition, documentation and contracts were not provided for another 6 transactions. As a result, 53 expenditures, totaling $32,097, could not be verified as allowable activities or costs for the Special Education program. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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. . . ." 34 CFR 300.202(a) states: "General. Amounts provided to the LEA under Part B of the Act— (1) Must be expended in accordance with the applicable provisions of this part; (2) Must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with paragraph (b) of this section; and (3) Must be used to supplement State, local, and other Federal funds and not to supplant those funds." INDIANA STATE BOARD OF ACCOUNTS 27 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 34 CFR 300.208 states: "(a) Uses. Notwithstanding §§ 300.202, 300.203(b), and 300.162(b), funds provided to an LEA under Part B of the Act may be used for the following activities: (1) Services and aids that also benefit nondisabled children. For the costs of special education and related services, and supplementary aids and services, provided in a regular class or other education-related setting to a child with a disability in accordance with the IEP of the child, even if one or more nondisabled children benefit from these services. (2) Early intervening services. To develop and implement coordinated, early intervening educational services in accordance with § 300.226. (3) High cost special education and related services. To establish and implement cost or risk sharing funds, consortia, or cooperatives for the LEA itself, or for LEAs working in a consortium of which the LEA is a part, to pay for high cost special education and related services. (b) Administrative case management. An LEA may use funds received under Part B of the Act to purchase appropriate technology for recordkeeping, data collection, and related case management activities of teachers and related services personnel providing services described in the IEP of children with disabilities, that is needed for the implementation of those case management activities." 34 CFR 300.800 states: "The Secretary provides grants under section 619 of the Act to assist States to provide special education and related services in accordance with Part B of the Act— (a) To children with disabilities aged three through five years; and (b) At a State's discretion, to two-year-old children with disabilities who will turn three during the school year." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." INDIANA STATE BOARD OF ACCOUNTS 28 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to turnover of staffing in both the Special Education personnel and the School Corporation's administrative office, an effective system of internal controls was not established that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. 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 compliance requirements listed above. Questioned Costs We identified $32,097 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation to support all grant expenditures will be maintained and made available for audit as related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-007 Subject: Special Education Cluster (IDEA) - Cash Management 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): 21611-045-PN01, 22611-045-PN01, 22611-045-ARP, 21619-045-PN01, 22619-045-PN01, 22619-045-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management 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 2022-007. INDIANA STATE BOARD OF ACCOUNTS 29 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. The School Corporation submitted six reimbursement requests to the Indiana Department of Education during the audit period. The School Corporation was unable to provide documentation to support the underlying data accumulated and summarized in each of the reimbursement requests. The reported data could not be traced to the records that accumulate or summarize the data; therefore, we were unable to verify the accuracy and completeness of the reimbursement requests. As a result, we were unable to verify that program funds were expended prior to requesting reimbursement. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 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 200.305(b)(3) states in part: "Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per § 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." Cause Due to turnover of staffing in both the Special Education personnel and the School Corporation's administrative office, the School Corporation's management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, as it related to the grant agreement and the Cash Management compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 30 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without a proper system of internal controls in place that operated effectively, the School Corporation did not retain and provide appropriate supporting documentation to support the reimbursement requests. This prevented the determination of the School Corporation's compliance with the compliance requirements listed above. 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 for the reimbursement requests will be maintained and made available for audit as related to the grant agreement and the Cash Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-011 Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 2022-010. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls to ensure that proper documentation was retained for audit. A sample of 60 transactions charged to the Title I grant during the audit period was selected for testing. The following errors were noted: • A total of 29 transactions, totaling $13,621, were fringe benefit claims; however, the supporting documentation provided did not include details to identify the employees for which the benefit was paid. As a result, we were unable to determine if the payments were on behalf of allowable staff related to the Title I program. • The School Corporation was unable to provide supporting documentation for 2 transactions totaling $551. As such, these transactions were unable to be verified as allowable activities or costs for the Title I program. The errors noted above were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 39 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Due to turnover of staffing in the School Corporation's administrative office, the School Corporation's management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 40 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compliance requirements listed above. Questioned Costs We identified $14,172 in known questioned costs as noted above in the Condition and Context. 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 Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-013 Subject: Title I Grants to Local Educational Agencies - Eligibility 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: Eligibility 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 2022-013. Condition and Context The School Corporation submits the October Real Time report each year to the Indiana Department of Education (IDOE). This data is used to report the School Corporation's enrollment and poverty (socioeconomic) status of the students enrolled in each school. The School Corporation had not properly designed or implemented a system of internal controls to ensure a proper review and approval of the October Real Time report took place before submission to the IDOE. Enrollment and poverty numbers for any nonpublic schools are manually entered into the Title I Application by the School. Summary data of nonpublic enrollment and poverty status was provided to the School Corporation by the participating nonpublic school. The enrollment counts and the poverty counts included in the summary data should have been supported by nonpublic school records, such as a list of students and their poverty status. The School Corporation did not retain the supporting documentation for the audit period for the nonpublic schools. The lack of internal controls and lack of supporting documentation was systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 45 NORTH LAWRENCE COMMUNITY SCHOOLS 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 200.334 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. . . ." 34 CFR 200.78(a)(1) states: "After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school." Cause Due to turnover of staffing in the School Corporation's administrative office, the School Corporation's management had not established a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, related to the Eligibility compliance requirement. Effect The School Corporation did not establish an effective system of internal controls and retain and provide appropriate supporting documentation for the audit period which enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Eligibility compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, real time reports and nonpublic school enrollment documentation were not maintained for audit, and, as such, the Indiana State Board of Accounts could not determine if the School Corporation complied with the Eligibility compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 46 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
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.
FINDING 2024-015 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 2022-018. Condition and Context The School Corporation had not properly implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. Vendor Disbursements Per inquiry with the School Corporation, one employee prepares the reimbursement requests, and another employee reviews the requests to ensure all costs are correct and allowable before giving their approval. A total of 60 claims were sampled for audit. Of the 30 vendor claims tested, there were 3 claims, totaling $2,563, that had no supporting documentation provided to determine if they were an allowable cost nor did they provide support of review and approval of the expenditure. Payroll Disbursements The School Corporation had established internal controls that all payroll is approved by the Treasurer and the School Board. However, during the audit, the School Corporation was unable to provide supporting documentation to show where the governing board approved the rate or pay or stipend amount for 2 of the payrolls selected for testing of $341 in order to determine if the costs were allowable. 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 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Due to turnover in staff, supporting documentation could not be located to support for some expenditures paid from the COVID-19 - Education Stabilization Fund during the audit period. Effect The failure to establish an effective system of internal controls could have enabled noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Questioned Costs We identified $2,904 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure supporting documentation is maintained and available for audit to ensure compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria - Uniform Guidance 2 CFR 200.334(a) states that The records must be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken if any litigation, claim, or audit is started before the expiration of the three-year period.Condition – Personnel records were not properly retained. Effect – Key controls were missing personnel data records. Cause – Closing of HVRP federal program Recommendation – Management should prepare a quality control assessment to ensure data retention of personnel records is properly retained in line with Uniform guidance requirements.
2024-008 Federal Agencies: U.S. Department of Agriculture Federal Program Names: The Child Nutrition Cluster: National School Lunch Program Summer Food Service Program Assistance Listing Numbers: 10.555 10.559 Pass-Through Agency: Commonwealth of Pennsylvania, Department of Education Pass-Through Number: 359-46-477-8 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance Criteria: Uniform Guidance requires recipients to submit accurate, complete, and timely financial and performance reports for federal awards (2 CFR 200.327 and 200.328). Program specific reporting instructions for the Child Nutrition Cluster require the FNS 10 and FNS 418 to be filed within 30 days after month end. Condition: As part of the reporting requirements for the CBS Food Program under the National School Lunch Program (NSLP) and Summer Food Service Program (SFSP), management is responsible for submitting the FNS 10 (NSLP) and FNS 418 (SFSP) reports within 30 days after month-end. However, management was unable to provide five (5) monthly NSLP reports and one (1) monthly SFSP report requested for audit testing. Questioned Costs: None Cause: Management did not maintain adequate internal controls to ensure that required monthly program reports were properly completed, retained, and available for audit. This may include weaknesses in recordkeeping processes, staff turnover, or insufficient monitoring of reporting deadlines. Effect: Failure to maintain and provide required federal reports results in noncompliance with federal reporting requirements. Because key source documents were unavailable, auditors were unable to verify the accuracy, completeness, and timeliness of reported program activity for those months. This increases the risk of misreporting or unsupported claims being submitted to the federal government. Recommendation: The Organization should establish and enforce strengthened internal controls over federal reporting to ensure that all required monthly reports (FNS 10 and FNS 418) are: (a) completed accurately, (b) submitted on time, and (c) retained in accordance with federal record retention requirements (2 CFR 200.334). Management should designate responsible personnel and implement a monitoring process to ensure compliance. Views of Responsible Officers and Corrective Action Plan: Please refer to Community Benefit Solutions dba CBS Food Program’s Corrective Action Plan
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
Finding 2024-007: Document Retention – Material Weakness Information on the federal program: Federal program is American Rescue Plan Act - Violence Prevention and Reduction Grant Portfolio from the U.S. Department of Treasury passed through the Justice Advisory Council. Criteria: Under 2 CFR 200.334, non-federal entities must retain financial and programmatic records, supporting documentation, statistical records, and all other records pertinent to a federal award for the required retention period. Records must be maintained in a manner that allows them to be readily accessible for audit and monitoring purposes. Effective internal controls include maintaining complete, organized, and retrievable documentation to support financial reporting and compliance. Condition: The Organization does not have an effective document retention process or internal controls to ensure that key financial records are consistently preserved, organized, and readily retrievable. Supporting documentation such as invoices, contracts, reconciliations, journal entry support, and grant documentation was frequently incomplete, missing, or delayed in being provided. These gaps resulted in incomplete audit trails and limited management’s ability to demonstrate the completeness, accuracy, and validity of financial information. Cause: The Organization has not designed, implemented, or maintained adequate document retention procedures, nor assigned responsibility to ensure consistent storage, organization, and retrieval of supporting financial documentation. Effect: Without complete and accessible supporting documentation, the Organization cannot substantiate recorded amounts, validate the occurrence or completeness of transactions, or demonstrate the functioning of key internal controls. This increases the risk that material misstatements in the financial statements or noncompliance with federal requirements may not be prevented or detected in a timely manner. Questioned Costs: None. Context: During the audit, we requested various supporting documents needed to verify financial transactions, account balances, and management representations for the period under audit. In multiple instances, the Organization was unable to locate or provide the requested documentation in a timely manner. These difficulties occurred across several financial areas, including invoices, reconciliations, journal entry support, grant-related documentation, and valuation records, indicating that document retention challenges were pervasive rather than isolated to one type of record. Identification as a Repeat Finding: 2023-008 Recommendation: We recommend that management implement a comprehensive document retention and recordkeeping policy that establishes standardized retention requirements for all key financial documentation, including invoices, contracts, reconciliations, journal entries, and grant support. Management should develop procedures for centralized and secure storage, either physical or electronic, to ensure records are properly preserved and readily accessible. Additionally, periodic monitoring should be performed to confirm compliance with retention procedures, and staff should receive training to reinforce expectations regarding documentation maintenance and timely retrieval. Views of responsible officials and planned corrective actions: Subsequent to this grant commencing, the Organization hired a new grant and partnership specialist. This specialist attaches all relevant support for expenditure to the internal monthly grant reporting and ensures that all expenditures are fully supported by appropriate detail. This detail is on a shared drive with finance and is reviewed by the vice president of finance.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-through Agency: Northampton County Pass-Through Number: N/A Award Period: May 18, 2022 - December 31, 2025; October 1, 2022 - December 31, 2025 May 18, 2023 - December 31, 2025 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria: Uniform Guidance requires recipients to prepare, submit, and retain accurate, complete, and timely financial reports for federal awards in accordance with 2 CFR §§ 200.327 and 200.328. Additionally, federal record retention requirements (2 CFR § 200.334) require organizations to maintain supporting documentation sufficient to substantiate reported program activity. Condition: During audit testing of financial reporting for the Coronavirus State and Local Fiscal Recovery Funds program, the Organization was unable to locate three of ten financial reports requested for review. As a result, auditors were unable to verify the accuracy, completeness, or timeliness of the reported financial information for those reporting periods. Questioned Costs: None. Context: Ten reports were requested for audit testing and management was unable to provide three of the requested reports. Cause: The Organization experienced turnover within the finance department, which contributed to inadequate document retention and weaknesses in controls over the preparation and maintenance of required financial reports. Effect: Failure to maintain and provide required financial reports constitutes noncompliance with federal reporting and record retention requirements. The absence of key source documentation limits assurance that reported program activity is accurate and supported and increases the risk of misreporting or unsupported claims being submitted to the federal government. Repeat Finding: N/A: Not a repeat finding Recommendation: The Organization should strengthen internal controls over financial reporting and record retention by establishing clear procedures to ensure that all required reports are accurately prepared, timely submitted, and retained in accordance with federal requirements. Management should designate responsible personnel and implement monitoring procedures to verify compliance with reporting and documentation standards. View of Responsible Officials and Planned Corrective Action: Please refer to Community Action Committee of the Lehigh Valley, Inc. and Subsidiaries’ Corrective Action Plan.
Finding No. 2024-006 – Purchases and disbursement cycle Federal Program ALN 93.498 Provider Relief Fund - CARES Act Name of Federal Agency U.S. Department of Health and Human Services Category Non-compliance / Material Weakness in internal controls over compliance Compliance Requirement Activities Allowed/Cost Principl Criteria The Purchasing Procedures Manual or “Reglamento de compras” of the Corporation, in its articles 14 “Inicio de las gestiones de compra” and 15 “Subastas informales”, establishes the parameters and process to begin a purchase, that includes the issuance of a purchase requisition as well as of the requirement of a quotation for determined purchases. In addition, 2 CFR §200.302 – Financial Management, states that management must maintain 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. Also, 2 CFR §200.334 – Retention Requirements for Records, states that the recipient and subrecipient must retain all Federal award records for three years from the date of submission of their final financial report. Records to be retained include but are not limited to, financial records, supporting documentation, and statistical records. Finally, 2 CFR §200.303 – Internal Controls state that the recipient and subrecipient must 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. Condition During testing of internal control procedures over purchases and cash disbursements of Provider Relief Funds, we examined processed invoices and payments that lacked properly approved purchase requisitions and quotations. The documents could not be located by management and thus, were not made available for examination. Cause This deficiency is the result of lack of knowledge from the employees and overall absence of implementation, monitoring and proper compliance with internal controls of the Corporation’s procedures. Effect The Corporation did not comply with its purchasing procedures manual. This condition increases the risk of improper or fraudulent purchases, the selection of higher-cost vendors, and other procurement irregularities. Because these transactions were funded with federal awards, this condition also increases the risk of noncompliance with federal requirements and the potential for questioned costs. Questioned cost None. Context During the audit of substantive tests of compliance related to Provider Relief Fund disbursements, from a sample of twenty-five (25) disbursements, we examined twenty-five (25) invoices, in which, six (6) of them lacked an approved requisition, and proper documentation of quotations. Identification of a repeat finding A similar condition was found in the previous audit on Finding 2023-003 which was an Internal Control over Financial Reporting finding. Recommendation We recommend that the Corporation strengthen its internal controls over the purchasing and disbursement processes to ensure compliance with its established policies and procedures. Specifically, all supporting documentation for purchases and cash disbursements should be reviewed for completeness, accuracy, and compliance with procurement requirements prior to the approval and signing of checks. Any exceptions or unusual items should be resolved and documented before payment is processed. In addition, management should implement supervisory review and monitoring procedures to ensure that procurement activities are performed in accordance with the Corporation’s policies and applicable federal requirements. All supporting documentation should be properly maintained to support transactions and facilitate audit and internal review purposes. Views of responsible officials and planned corrective actions The Corporation’s management and responsible officers agree with this finding. Please refer to the corrective action plan section for the Corporation’s response on pages 85 to 90.
Finding No. 2024-007 – Provider Relief Fund Reporting Federal Program ALN 93.498 Provider Relief Fund - CARES Act Name of Federal Agency U.S. Department of Health and Human Services Criteria According to the guidelines governing the Provider Relief Fund (PRF), recipients who received one or more PRF and or American Rescue Plan payments exceeding $10,000, in the aggregate, during a Payment Received Period are required to report in each applicable Reporting Period as outlined in a timetable provided by the Health Resources & Services Administration. The table below is applicable to the funds received by the Corporation: Period Payment Received Period (Payments Exceeding $10,000 in Aggregate Received Period of Availability for Eligible Expenses Period of Availability for Lost Revenues PRF and ARP Rural Portal Reporting Time Period Period 5 January 1, 2022 to June 30, 2022 January 1, 2020 to June 30, 2023 January 1, 2020 to June 30, 2023 July 1, 2023 to September 30, 2023 In addition, CFR 200.334 states that the recipient and subrecipient must retain all Federal award records for three years from the date of submission of their final financial report. For awards that are renewed quarterly or annually, the recipient and subrecipient must retain records for three years from the date of submission of their quarterly or annual financial report, respectively. Records to be retained include but are not limited to, financial records, supporting documentation, and statistical records. Condition The Corporation could not provide evidence that reporting for Period 5 was made within the reporting time period due lack of access to the HRSA (Health Resources and Services Administration) portal. Category Non-compliance / Significant Deficiency in internal controls over compliance. Compliance Requirement Reporting Cause The Corporation did not maintain records that the PRF Portal report was made within the required reporting time period. Currently, management cannot access the portal where the report was submitted and therefore, there is no evidence that the report was submitted in a timely matter. Effect As a result of this condition, the grantor may issue warnings and/or impose penalties to the Corporation. Questioned cost None. Context The Corporation was required to submit the Period 5 report by September 30, 2023. Management provided the report but was not able to provide evidence that submission was made on time. Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Recommendation Management should strengthen its internal controls over the administration and compliance monitoring of federal awards to ensure that all reporting and compliance requirements are met in accordance with program regulations. Specifically, the Corporation should establish formal procedures to track federal reporting deadlines, assign clear responsibility for the preparation and submission of required reports, and ensure continuity of access to federal reporting systems in the event of changes in management or personnel. Management should also implement supervisory review procedures to confirm that required reports are submitted timely and retain appropriate documentation supporting compliance with federal reporting requirements. Additionally, the Corporation should establish and enforce policies requiring that all records related to federal awards be maintained for at least three years after the closeout of the award, in accordance with federal regulations. Views of responsible officials and planned corrective actions The Corporation’s management and responsible officers agree with this finding. Please refer to the corrective action plan section for the Corporation’s response on pages 85 to 90.
The Department of Economic Security could not support information reported to the federal agency and we were unable to determine whether the expenditures were appropriate Assistance Listings number(s) and name(s): 21.023 COVID-19 – Emergency Rental Assistance Program Award number(s) and year(s): ERA2-0165 May 10, 2021 through September 30, 2025 Federal agency: U.S. Department of the Treasury Compliance requirement(s): Reporting Questioned costs: Not applicable Condition Contrary to federal regulations and guidance, for information it reported to the federal agency for its Emergency Rental Assistance Program (ERAP) 2 award, the Department of Economic Security—Child and Community Services Division (Division) did not retain documentation to support information reported to the federal agency.1 Specifically, for the 2 quarterly reports we selected for test work, we found that the Division did not retain documentation, such as system reports, queries, or screenshots, to support the performance reporting information it reported in its 2 reports as required.2,3 Specifically, we found that the Division did not retain any support for the ERAP 2 quarter 4 compliance report (December 2023) and had only partial support for the ERAP 2 quarter 1 compliance report (March 2024) submitted to the grantor. Effect The Division’s failure to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Division’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. 1 The ERAP was established by Section 501 of Title V, Division N, of the Consolidated Appropriations Act of 2021 (Public Law No. 116-260) in response to the coronavirus pandemic and to provide financial relief to help keep individuals who rent housing in their homes and provide financial assistance to landlords who rely on rental income. ERAP 2 was established by Sec. 3201 of Title III, Subtitle B, of the American Rescue Plan Act of 2021 (Public Law No. 117-2). 2 The U.S. Department of the Treasury published reporting guidance for the required monthly, quarterly, final reporting, and closeout reports (U.S. Department of the Treasury. [2022]. Reporting Guidance—Emergency Rental Assistance Program, Version 3.4. Monthly, Quarterly, and Final Reporting. Retrieved 10/17/2025 from https://home.treasury.gov/system/files/136/ERA-Reporting-Guidance-v2.pdf). 3 On October 6, 2023, the U.S. Department of the Treasury published ERAP 2 Treasury Portal User Guide, which included a recommendation for ERAP recipients to take screenshots of portal screens as the downloadable PDF documents display only key components of the overall report (U.S. Department of the Treasury. [2025]. Emergency Rental Assistance Program (ERA2) Treasury Portal User Guide, Version 4.0. Retrieved 10/17/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). Cause The Division did not follow its policies and procedures to retain documentation to support the information it included in its 2 reports. Criteria For quarterly financial and compliance reports, federal guidance requires the Division to report information, such as the administrative cost ratio, housing stability services ratio, and system for prioritizing assistance so that the federal agency can monitor performance and compliance. Further, the Division’s policies and procedures require the Division to retain all records relating to a federal award for a period of at least 5 years after all funds allocated to the State have been expended, which generally exceeds the federal regulation requirement to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334). Lastly, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Division 1. Prepare and retain detailed documentation, such as system reports, queries, or screenshots, to support the program information it reports to the federal agency. 2. Follow its policies and procedures to retain all records relating to a federal award for a period of 5 years after all funds are expended. This finding is similar to prior-year finding 2023-107 and was initially reported in fiscal year 2022. Views of responsible officials State management concurs with this finding. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials regarding these recommendations. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
The Department of Emergency and Military Affairs’ Emergency Management Division did not always retain documentation supporting payroll, increasing the risk that $103,045 may not have been spent in accordance with award terms and conditions Assistance Listings number(s) and name(s): 97.042 Emergency Management Performance Grants Award number(s) and year(s): EMF-2021-EP-0016-S01 October 1, 2020 through September 30, 2023 EMF-2021-EP-0018-S01 October 1, 2020 through June 30, 2025 EMF-2022-EP-0009-S01 October 1, 2021 through September 30, 2025 EMF-2023-EP-0008-S01 October 1, 2022 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Compliance requirement(s): Activities Allowed or Unallowed/Allowable Costs/Cost Principles Questioned costs: $103,045 Condition Contrary to federal regulations and its policy, the Department of Emergency and Military Affairs’ Emergency Management Division (Division) did not always retain documentation supporting the payroll costs it charged to the program. Specifically, the Division did not retain personnel action forms supporting and approving employees’ pay rates and/or authorization to work on the program for 5 of 40 employees we tested totaling $103,045, as follows: X $95,080 for 2 employees’ annual payroll costs lacked supported pay rates and authorization to work on the program. These employees transferred to other State agencies after the fiscal year ended, and contrary to Division policy and federal regulation, the Division did not retain their personnel records. X $7,965 for 3 employees annual payroll costs lacked supported pay rates. Previous personnel action forms authorized these 3 employees to work on the program. Effect The Division’s failure to retain documentation supporting payroll costs increased the risk that $103,045 may not have been spent in accordance with award terms and conditions. Consequently, the Division may be required to return monies to the federal agency in accordance with federal requirements.1 The Division’s $1.7 million overall program payroll costs paid to 76 employees, or 23% of $7.3 million total program costs during fiscal year 2024, are at an increased risk of not being spent in accordance with the award terms and conditions. Finally, the Division is at risk that this finding applies to other federal programs it administers. Cause The Division’s Administrative Services Office (Office) was not trained on or aware of Division policy requirements to prepare personnel action forms authorizing all employee pay rate changes and program assignments and to retain the records of employees who subsequently transferred to another State agency. Criteria Federal regulation requires the Division to maintain records for salaries and wages charged to federal awards that accurately reflect the work performed to ensure they are accurate, allowable, and properly allocated (2 CFR §200.430 [g][1][i]) and retain these records for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency or passthrough grantor (2 CFR §200.334). In addition, the Department of Emergency and Military Affairs’ policy requires the Division to prepare and retain for 5 years after an employee’s termination all the employee’s employment records, including personnel action forms authorizing employee pay rate changes and program assignments. It also requires the Division to retain necessary personnel records of employees who transfer to another State agency for no less than 5 years.2 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the Division, takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 State of Arizona, Department of Emergency and Military Affairs. (2007). DEMA Directive 20.1: State Human Resources Administration, Sections 1.3: The Official Personnel File, 1.5: Employees Transferring to Another State Agency. Recommendations to the Division 1. Retain documentation for all payroll costs, including personnel action forms, to demonstrate employees’ salaries and wages are authorized to be charged to the federal program and spent in accordance with the program’s award terms and conditions. 2. Review the fiscal year 2024 payroll costs for the program to ensure they were properly supported and spent in accordance with the award terms and conditions and coordinate with the U.S. Department of Homeland Security, as necessary, to adjust future federal reimbursement requests or repay any unallowable costs the Division charged to the program. 3. Implement its written policy and train employees to prepare and retain for no less than 5 years the personnel action forms authorizing all employee pay rate changes and program assignments, including those who transfer to another state agency. Views of responsible officials State management concurs with this finding. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials regarding these recommendations. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
The Department of Emergency and Military Affairs’ Emergency Management Division (Division) did not retain adequate documentation supporting reimbursement requests, matching requirements, and financial reports, risking the Division receiving monies it was not entitled to Assistance Listings number(s) and name(s): 97.042 Emergency Management Performance Grants Award number(s) and year(s): EMF-2021-EP-0016-S01 October 1, 2020 through September 30, 2023 EMF-2021-EP-0018-S01 October 1, 2020 through June 30, 2025 EMF-2022-EP-0009-S01 October 1, 2021 through September 30, 2025 EMF-2023-EP-0008-S01 October 1, 2022 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Compliance requirement(s): Cash management, matching, and reporting Questioned costs: Unknown Condition Contrary to federal regulations, the Division did not retain adequate documentation supporting reimbursement requests, matching requirements, and financial reports as follows: X Cash management For 4 of 5 requests for reimbursement we tested, the Division did not retain adequate documentation to support the amounts requested for reimbursement from the federal agency. The Division used documentation provided by its subrecipients to calculate the amount to both reimburse the subrecipient and request from the federal government. However, while the Division provided documentation of the invoices paid under their requests for reimbursement, they were unable to indicate which invoice applied to the respective request for reimbursement. X Matching The Division was unable to demonstrate through its reimbursement requests or other supporting documentation how it used nonfederal funds for at least 50% of the total project cost. X Reporting The Division did not retain documentation supporting 3 of 3 Federal Financial Reports (FFR) we tested, as follows: y For the 2023 quarter 4 FFR, the Division could only provide an unapproved draft copy and could not demonstrate that it submitted the FFR to the federal agency. y For the 2024 quarter 1 FFR and the annual FFR, the Division did not retain underlying general ledger data or other records to support costs reported, including indirect costs calculated from an approved indirect cost rate agreement. Effect The Division’s failure to retain adequate documentation supporting reimbursement requests, matching requirements, and financial reports resulted in our being unable to determine whether the reimbursements were appropriate, matching requirements were met, and the reports were complete and accurate. There is also an increased risk that Division could receive federal monies to which it is not entitled. Also, if matching requirements are not met, the Division may be required to return program monies to the federal agency in accordance with federal requirements.1 Further, the federal agency is unable to rely on the financial reports to monitor the Division’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and evaluate the program’s success. Finally, the Division is at risk that this finding applies to other federal programs it administers. Cause The Division reported that turnover of staff who previously prepared documentation to support reimbursement requests, matching requirements, and financial reports and submitted the reimbursement requests and financial reports resulted in the Division’s inability to locate the supporting documentation for the reports, including the applicable indirect cost agreement, or explain how to reconcile a large number of invoices that were provided to the reimbursement requests tested. The Division also did not have formal policies and procedures requiring an independent review to ensure the accuracy and completeness of the information included in the reports, and the retention of all documentation supporting data included in its reports. Consequently, only 2 of the 3 reports we tested were reviewed and approved prior to submitting the reports to the federal agency. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513(c)). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). Criteria Federal regulation requires the Division to retain all public records, including financial records and supporting documentation, related to a federal program for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency or pass-through grantor (2 CFR §200.334). In addition, federal regulation requires the Division to submit its quarterly reports no later than 30 days after the reporting period (2 CFR §200.328). Federal regulation also requires the Division to use the reimbursement method to administer the program, whereby the Division is reimbursed with federal program monies only after it spends its own monies for authorized program purposes and requests reimbursement from the federal grantor (2 CFR §200.305[B][3]). Also, the program’s grant agreement requires the Division to match 50% of the approved project costs from nonfederal sources. Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Division 1. Retain documentation for all reimbursement requests, matching requirements, and financial reports, such as the underlying general ledger data, approved indirect cost rate agreements, or information provided by its subrecipients for a period of 3 years from the date the program’s final report is submitted to the federal agency. 2. Review the reports identified above to ensure they were accurate. If any inaccuracies are identified, work with the federal grantor to correct these reports. 3. Develop and implement written policies and procedures over the preparation of reimbursement requests and financial reports, and the monitoring of the Division’s matching requirements as well as the retention of these records. The Division should train responsible staff on these policies and to perform an independent review of these documents to ensure accuracy and completeness prior to submission to the federal agency. 4. Allocate sufficient resources, such as staffing, to comply with the award terms and program requirements over reimbursement requests, matching requirements, and financial reports. Views of responsible officials State management concurs with this finding. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials regarding these recommendations. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Finding 2023-003: Reporting Federal Program: Economic Adjustment Assistance [AL #11.307]. Criteria: Per 2 CFR 200.334, financial records, supports 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 Federal awards that are renewed quarterly or annually, from the date of the 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. Condition: The Bureau was unable to provide documentation that their annual report was submitted to the Kentucky Department of Tourism. As such, the report was unable to be tested. Cause: Controls were not in place to ensure records were maintained in accordance with the Uniform Guidance. Effect: The reporting requirements were unable to be tested. Questioned Costs: None Context: This is not a systemic problem. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Bureau maintain all records related to Federal awards, including making copies of reports submitted, to ensure compliance with the award. Management Response: The management team received limited guidance on the testing, reporting, and retention requirements of federal funds. In the future, copies of all reports and documentation of timely submission will be maintained by the management team.
#2023-010 – Major Federal Award Finding – Document Retention Nature of Finding: Compliance Finding – Uniform Guidance Administrative Requirements and Material Weakness in Internal Controls Over Compliance This is a repeat of prior year finding #2022-011. Criteria/Condition: Federal regulations 2 CFR 200.334 provides that a non-federal entity must retain all records pertinent to a federal award for a minimum period of three years from the date of submission of the annual financial report. We noted during testing that records were not consistently being maintained. Cause/Context: For 4 of the 40 expenditures selected for testing, the Organization was unable to provide appropriate invoice documentation supporting the amount charged to the grant. Effect: Federal expenditures could be charged to the grant at incorrect amounts or for unallowable costs. Recommendation: We recommend the Organization implement a document retention policy that is consistent with the federal document retention requirements. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a document retention policy that is consistent with federal document retention requirements.
#2023-010 – Major Federal Award Finding – Document Retention Nature of Finding: Compliance Finding – Uniform Guidance Administrative Requirements and Material Weakness in Internal Controls Over Compliance This is a repeat of prior year finding #2022-011. Criteria/Condition: Federal regulations 2 CFR 200.334 provides that a non-federal entity must retain all records pertinent to a federal award for a minimum period of three years from the date of submission of the annual financial report. We noted during testing that records were not consistently being maintained. Cause/Context: For 4 of the 40 expenditures selected for testing, the Organization was unable to provide appropriate invoice documentation supporting the amount charged to the grant. Effect: Federal expenditures could be charged to the grant at incorrect amounts or for unallowable costs. Recommendation: We recommend the Organization implement a document retention policy that is consistent with the federal document retention requirements. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a document retention policy that is consistent with federal document retention requirements.
FINDING 2023-006 Subject: COVID-19 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii- Reporting Federal Agency: Department of Housing and Urban Development Federal Programs: COVID-19 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii Assistance Listings Number: 14.228 Federal Award Number and Year (or Other Identifying Number): CV-CV1-233 Pass-Through Entity: Indiana Office of Community and Rural Affairs Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 25 JEFFERSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The passthrough agency required the County to submit a CDBG-CV report on Jobs Retained. The County collected the required information via phone calls made by one individual who compiled the information and submitted the required CDBG-CV report on Jobs Retained for the grant program without a documented oversight or review process. Furthermore, supporting documentation for the report was not retained for audit. Due to the lack of supporting documentation, we were unable to determine the accuracy of the report submitted. The lack of internal controls and the failure to maintain adequate supporting documentation was isolated to the CDBG-CV Report on Jobs Retained report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the 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 Management had not established a system of internal controls that would have ensured that adequate supporting documentation would have been maintained and made available for audit. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, we could not determine the County's compliance with the CDBG-CV Report on Jobs Retained report. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. INDIANA STATE BOARD OF ACCOUNTS 26 JEFFERSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to provide for a segregation of duties in the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight are taking place. We also recommended strengthening its policies and procedures to ensure appropriate supporting documentation is retained to be presented for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-003: Reporting Federal Program: Economic Adjustment Assistance [AL #11.307]. Criteria: Per 2 CFR 200.334, financial records, supports 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 Federal awards that are renewed quarterly or annually, from the date of the 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. Condition: The Bureau was unable to provide documentation that their annual report was submitted to the Kentucky Department of Tourism. As such, the report was unable to be tested. Cause: Controls were not in place to ensure records were maintained in accordance with the Uniform Guidance. Effect: The reporting requirements were unable to be tested. Questioned Costs: None Context: This is not a systemic problem. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Bureau maintain all records related to Federal awards, including making copies of reports submitted, to ensure compliance with the award. Management Response: The management team received limited guidance on the testing, reporting, and retention requirements of federal funds. In the future, copies of all reports and documentation of timely submission will be maintained by the management team.
#2023-010 – Major Federal Award Finding – Document Retention Nature of Finding: Compliance Finding – Uniform Guidance Administrative Requirements and Material Weakness in Internal Controls Over Compliance This is a repeat of prior year finding #2022-011. Criteria/Condition: Federal regulations 2 CFR 200.334 provides that a non-federal entity must retain all records pertinent to a federal award for a minimum period of three years from the date of submission of the annual financial report. We noted during testing that records were not consistently being maintained. Cause/Context: For 4 of the 40 expenditures selected for testing, the Organization was unable to provide appropriate invoice documentation supporting the amount charged to the grant. Effect: Federal expenditures could be charged to the grant at incorrect amounts or for unallowable costs. Recommendation: We recommend the Organization implement a document retention policy that is consistent with the federal document retention requirements. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a document retention policy that is consistent with federal document retention requirements.
#2023-010 – Major Federal Award Finding – Document Retention Nature of Finding: Compliance Finding – Uniform Guidance Administrative Requirements and Material Weakness in Internal Controls Over Compliance This is a repeat of prior year finding #2022-011. Criteria/Condition: Federal regulations 2 CFR 200.334 provides that a non-federal entity must retain all records pertinent to a federal award for a minimum period of three years from the date of submission of the annual financial report. We noted during testing that records were not consistently being maintained. Cause/Context: For 4 of the 40 expenditures selected for testing, the Organization was unable to provide appropriate invoice documentation supporting the amount charged to the grant. Effect: Federal expenditures could be charged to the grant at incorrect amounts or for unallowable costs. Recommendation: We recommend the Organization implement a document retention policy that is consistent with the federal document retention requirements. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a document retention policy that is consistent with federal document retention requirements.
FINDING 2023-006 Subject: COVID-19 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii- Reporting Federal Agency: Department of Housing and Urban Development Federal Programs: COVID-19 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii Assistance Listings Number: 14.228 Federal Award Number and Year (or Other Identifying Number): CV-CV1-233 Pass-Through Entity: Indiana Office of Community and Rural Affairs Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 25 JEFFERSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The passthrough agency required the County to submit a CDBG-CV report on Jobs Retained. The County collected the required information via phone calls made by one individual who compiled the information and submitted the required CDBG-CV report on Jobs Retained for the grant program without a documented oversight or review process. Furthermore, supporting documentation for the report was not retained for audit. Due to the lack of supporting documentation, we were unable to determine the accuracy of the report submitted. The lack of internal controls and the failure to maintain adequate supporting documentation was isolated to the CDBG-CV Report on Jobs Retained report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the 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 Management had not established a system of internal controls that would have ensured that adequate supporting documentation would have been maintained and made available for audit. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, we could not determine the County's compliance with the CDBG-CV Report on Jobs Retained report. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. INDIANA STATE BOARD OF ACCOUNTS 26 JEFFERSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to provide for a segregation of duties in the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight are taking place. We also recommended strengthening its policies and procedures to ensure appropriate supporting documentation is retained to be presented for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-005: Significant Deficiency – Documentation Retention Federal grantor: Department of Commerce Condition: The Chamber was unable to provide supporting documentation for one expense sample. Criteria: According to 2 CFR § 200.334, recipients of federal awards must retain financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a federal award for a period of three years from the date of submission of the final expenditure report. Cause: The lack of documentation appears to result from inadequate procedures or oversight in retaining and securely storing required financial records related to the federal program. Effect: Failure to retain supporting documentation compromises the Chamber's ability to demonstrate allowability of costs, may result in questioned costs, and exposes the Chamber to risk in audits or federal monitoring reviews. Recommendation: We recommend the Chamber enhance its record retention policies and internal controls to ensure that all documentation supporting federal program expenditures is retained in compliance with 2 CFR § 200.334. Staff responsible for federal grants should receive training on documentation and retention requirements. Views of Responsible Officials and Planned Corrective Actions: The Chamber agrees with the findings and will improve its record retention practices to ensure all supporting documentation is properly maintained in compliance with federal requirements.
Criteria: 1. In accordance with 2 CFR § 200.319(a), all procurement transactions under a Federal award must be conducted in a manner that provides full and open competition. Further, 2 CFR § 200.320(a)(1)(i) requires that, to the extent practicable, micro‑purchases be distributed equitably among qualified suppliers. 2. 2 CFR § 200.214 subjects non‑Federal entities to the non-procurement suspension and debarment regulations in 2 CFR part 180, which restrict awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from Federal awards. Under 2 CFR § 180.300, before entering into a covered transaction with another person or entity at the next lower tier, the non Federal entity must verify that the party is not excluded or disqualified. This verification may be completed by reviewing the SAM.gov Exclusions, obtaining a certification from the entity, or including an appropriate suspension and debarment clause or condition in the contract or agreement. Further, in accordance with 2 CFR § 200.318(i), non‑federal entities must maintain records sufficient to document the history of procurement transactions; and 2 CFR § 200.334 requires retention of all supporting documentation for Federal awards. Together, these regulations require that documentation of the suspension and debarment verification be retained to demonstrate compliance with Federal procurement and suspension and debarment requirements. Condition: 1. The Republic’s procurement regulation § 625(c)(3) permits small purchases under $2,500 after obtaining one written price quotation. However, the policy does not demonstrate full and open competition to ensure that to the extent practicable, small purchases are distributed equitably among qualified suppliers. Of the 131 procurement transactions, 54 were identified as within the threshold established under § 625(c)(3)No. No. of Transactions General Ledger Account Name Amount 1 20 General Supplies $ 16,123 2 18 Fuel & Other Pol Products 9,220 3 7 Advertising 5,480 4 4 All Other Rentals 3,467 5 3 Boat Rentals 4,900 6 1 Medical Supplies 364 7 1 Vehicle Cycle Etc Rentl 540 Total: 54 $ 40,094 2. The Republic represents that vendors are verified in SAM.gov before entering into covered transactions; however, no documentation was retained to demonstrate that the required verification occurred. Documentation such as screenshots, printouts, approval records, or other system‑based evidence showing that the SAM.gov check was performed, was not available in the procurement or vendor files. Of the 57 purchase orders issued during the year ended September 30, 2023, 4 were identified as covered transactions subject to federal suspension and debarment requirements, totaling $1,978,024. No. Purchase Order # Vendor Amount 1 22301491 PATIENT FOCUS ARFICA (PTY) TD. $ 48,349 2 22303764 ARC CONSULTANCY 131,924 3 22305075 GOPHER SPORT 95,036 4 PC2 ROJECT BELAU SUBMARINE CABLE CORPORATION 1,702,715 Total: $ 1,978,024 Auditor verification of the above vendors in SAM.gov did not identify any as suspended or debarred. However, the absence of documentation prevents the Republic from demonstrating compliance with Federal suspension and debarment requirements. Cause: The Republic’s procurement policy does not ensure full and open competition for small purchases due to lack of required procedures to equitably distribute small purchases among qualified suppliers. Additionally, the Republic’s procurement procedures do not require the retention of documentation evidencing that suspension and debarment checks were performed. Effect: The Republic is not in compliance with Federal procurement, suspension and debarment requirements. Without federally compliant procedures and supporting documentation, the extent of questioned costs cannot be determined, resulting in an undeterminable question cost. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Republic update its procurement policies and procedures to include specific guidance to ensure full and open competition to equitably distribute small purchases among available qualified suppliers. Management should ensure that documentation supporting the basis for supplier selection is consistently maintained in procurement files. Additionally, we recommend that the Republic strengthen its procurement and vendor‑approval procedures to require retention of evidence demonstrating that suspension and debarment verification was performed for each covered transaction. Acceptable documentation may include date‑stamped screenshots of the SAM.gov search, system‑generated verification logs, or signed certifications. Documentation should be consistently retained in the procurement or vendor file to support compliance with Federal requirements. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.
Criteria: 1. In accordance with 2 CFR § 200.319(a), all procurement transactions under a Federal award must be conducted in a manner that provides full and open competition. Further, 2 CFR § 200.320(a)(1)(i) requires that, to the extent practicable, micro‑purchases be distributed equitably among qualified suppliers. 2. 2 CFR § 200.214 subjects non‑Federal entities to the non-procurement suspension and debarment regulations in 2 CFR part 180, which restrict awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from Federal awards. Under 2 CFR § 180.300, before entering into a covered transaction with another person or entity at the next lower tier, the non Federal entity must verify that the party is not excluded or disqualified. This verification may be completed by reviewing the SAM.gov Exclusions, obtaining a certification from the entity, or including an appropriate suspension and debarment clause or condition in the contract or agreement. Further, in accordance with 2 CFR § 200.318(i), non‑federal entities must maintain records sufficient to document the history of procurement transactions, and 2 CFR § 200.334 requires retention of all supporting documentation for Federal awards. Together, these regulations require that documentation of the suspension and debarment verification be retained to demonstrate compliance with Federal procurement and suspension and debarment requirements. Condition: 1. The Republic’s procurement regulation § 625(c)(3) permits purchases under $2,500 after obtaining one written price quotation. However, the policy does not demonstrate full and open competition to ensure that to the extent practicable, small purchases are distributed equitably among qualified suppliers. Of the 143 procurement transactions, 46 were identified as within the threshold established under § 625(c)(3). No. No. of transactions GL Account Name Amount 1 19 Machinery & Equip Repair $ 6,103 2 24 General Supplies 17,106 3 1 Professional 425 4 1 Advertising 500 5 1 Conference 504 Total: 46 $ 24,638 2. The Republic represents that vendors are verified in SAM.gov before entering into covered transactions; however, no documentation was retained to demonstrate that the required verification occurred. Documentation such as screenshots, printouts, approval records, or other system‑based evidence showing that the SAM.gov check was performed was not available in the procurement or vendor files. Of the 38 purchase orders issued during the year ended September 30, 2023, 2 were identified as covered transactions subject to federal suspension and debarment requirements, totaling $92,149. No. Purchase Order # Vendor Amount 1 22305991 EDHANNAH EDUCATION CONSULTING SERVICES $ 21,000 2 22300871 GUAM CEDDERS 71,149 Total: $ 92,149 Auditor verification of the above vendors in SAM.gov did not identify any as suspended or debarred. However, the absence of documentation prevents the Republic from demonstrating compliance with Federal suspension and debarment requirements. Cause: The Republic’s procurement policy does not ensure full and open competition for small purchases due to lack of required procedures to equitably distribute micro‑purchases among qualified suppliers. Additionally, the Republic’s procurement procedures do not require the retention of documentation evidencing that suspension and debarment checks were performed. Effect: The Republic is not in compliance with Federal procurement, suspension and debarment requirements. Without federally compliant procedures and supporting documentation, the extent of questioned costs cannot be determined, resulting in an undeterminable question cost. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Republic update its procurement policies and procedures to include specific guidance to ensure full and open competition to equitably distribute small purchases among available qualified suppliers. Management should ensure that documentation supporting the basis for supplier selection is consistently maintained in procurement files. Additionally, we recommend that the Republic strengthen its procurement and vendor‑approval procedures to require retention of evidence demonstrating that suspension and debarment verification was performed for each covered transaction. Acceptable documentation may include date‑stamped screenshots of the SAM.gov search, system‑generated verification logs, or signed certifications. Documentation should be consistently retained in the procurement or vendor file to support compliance with Federal requirements. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.