U.S. Department of Housing and Urban Development Federal Financial Assistance Listing # 14.157 Supportive Housing for the Elderly (Section 202) Project Rental Assistance Contract Number: ND99S091001 Project Number: 094-EE008-NP-WAH Activities Allowed/Unallowed and Allowable Costs/Cost Principles/Eligibility/Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria – CFR Section 200.334 indicates that financial records, supporting documentation, and all other entity records pertinent to federal awards must be retained for a period of three years. Condition – The Organization does not have an internal control system designed to provide for the appropriate retention of documentation supporting the transactions of the Organization and eligibility determinations of tenants at the project. As a result, through the transition of management, supporting documentation for expense transactions and tenant eligibility were destroyed and not able to be recreated. Cause – Due to a lack of control policies and proper enforcement, documents were inadvertently destroyed. Effect – Inadequate controls over document retention for the Organization could result in inaccurate transactions being recorded within the Organization’s financial statements or ineligible tenants occupying the units, which could result in non-compliance. Questioned Costs – None Reported. Context/Sampling – Not Applicable. Repeat Finding from Prior Year(s) – Yes, prior year finding 2021-004 Recommendation – It is the responsibility of management and those charged with governance to develop and enforce proper controls and monitoring over document retention policies. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development Federal Financial Assistance Listing # 14.157 Supportive Housing for the Elderly (Section 202) Project Rental Assistance Contract Number: ND99S091001 Project Number: 094-EE008-NP-WAH Activities Allowed/Unallowed and Allowable Costs/Cost Principles/Eligibility/Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria – CFR Section 200.334 indicates that financial records, supporting documentation, and all other entity records pertinent to federal awards must be retained for a period of three years. Condition – The Organization does not have an internal control system designed to provide for the appropriate retention of documentation supporting the transactions of the Organization and eligibility determinations of tenants at the project. As a result, through the transition of management, supporting documentation for expense transactions and tenant eligibility were destroyed and not able to be recreated. Cause – Due to a lack of control policies and proper enforcement, documents were inadvertently destroyed. Effect – Inadequate controls over document retention for the Organization could result in inaccurate transactions being recorded within the Organization’s financial statements or ineligible tenants occupying the units, which could result in non-compliance. Questioned Costs – None Reported. Context/Sampling – Not Applicable. Repeat Finding from Prior Year(s) – Yes, prior year finding 2021-004 Recommendation – It is the responsibility of management and those charged with governance to develop and enforce proper controls and monitoring over document retention policies. Views of Responsible Officials – Management agrees with the finding.
FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAMS AUDIT 2022-003 Significant Deficiency in Internal Controls over Compliance – Reporting Agency: U.S. Department of Health and Human Services Program(s) and Federal Award Identification Number(s): Special Programs for The Aging – Title III, Part B—Grants For Supportive Services And Senior Centers, Cares Act For Supportive Services Under Title III-B Of The Older Americans Act, And American Rescue Plan For Supportive Services Under Title III-B Of The Older Americans Act AL 93.044 Nutrition Services for Nutrition Services Under Title III-C Of The Older Americans Act, Cares Act For Nutrition Services Under Title III-C Of The Older Americans Act, And American Rescue Plan For Nutrition Services Under Title III-C Of The Older Americans Act AL 93.045 Nutrition Services Incentive Program AL 93.053 Special Programs for the Aging, Title VI, Part A, Grants to Indian Tribes AL 93.047 Children’s Advocacy Centers AL 93.558 New or Repeat: Repeat Criteria: Per 2 CFR 200.303, the non-Federal entity is responsible for maintaining effective internal controls over submissions of financial reports to comply with terms and conditions of Federal Awards. In addition, the grant awards require timely submission of reports. Additionally, per 2 CFR 200.334 “financial records, supporting documents … and all other non-Federal entity records pertinent to the Federal award must be retained for a period of three years from the date of submission of the final expenditure report.” Condition: Internal controls were not sufficiently designed and implemented to ensure that quarterly and annual financial reports were accurate, submitted in a timely manner, and supported by expenditures. We noted certain annual reports were not submitted in a timely manner. Additionally, CCS was unable to provide some of the submitted reports that were selected for testing. Cause: Vacancies in key financial positions and lack of adequate resources in the finance department led to a breakdown of established controls and inadequate monitoring of reporting requirements. Effective: CCS was not in compliance with its grant reporting requirements because the reports were submitted late or unable to be provided. Questioned costs: None. Perspective: For AL 93.047, four of twenty-three reports tested were submitted after the required due date. CCS was not able to provide seven of twenty-three reports selected for testing. Regarding the Aging Cluster, CCS was not able to provide three of seven reports selected for testing. For AL 93.558 two of five reports tested were submitted after the required due date. View of responsible officials: Management concurs with this finding. See corrective action plan.
FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAMS AUDIT 2022-003 Significant Deficiency in Internal Controls over Compliance – Reporting Agency: U.S. Department of Health and Human Services Program(s) and Federal Award Identification Number(s): Special Programs for The Aging – Title III, Part B—Grants For Supportive Services And Senior Centers, Cares Act For Supportive Services Under Title III-B Of The Older Americans Act, And American Rescue Plan For Supportive Services Under Title III-B Of The Older Americans Act AL 93.044 Nutrition Services for Nutrition Services Under Title III-C Of The Older Americans Act, Cares Act For Nutrition Services Under Title III-C Of The Older Americans Act, And American Rescue Plan For Nutrition Services Under Title III-C Of The Older Americans Act AL 93.045 Nutrition Services Incentive Program AL 93.053 Special Programs for the Aging, Title VI, Part A, Grants to Indian Tribes AL 93.047 Children’s Advocacy Centers AL 93.558 New or Repeat: Repeat Criteria: Per 2 CFR 200.303, the non-Federal entity is responsible for maintaining effective internal controls over submissions of financial reports to comply with terms and conditions of Federal Awards. In addition, the grant awards require timely submission of reports. Additionally, per 2 CFR 200.334 “financial records, supporting documents … and all other non-Federal entity records pertinent to the Federal award must be retained for a period of three years from the date of submission of the final expenditure report.” Condition: Internal controls were not sufficiently designed and implemented to ensure that quarterly and annual financial reports were accurate, submitted in a timely manner, and supported by expenditures. We noted certain annual reports were not submitted in a timely manner. Additionally, CCS was unable to provide some of the submitted reports that were selected for testing. Cause: Vacancies in key financial positions and lack of adequate resources in the finance department led to a breakdown of established controls and inadequate monitoring of reporting requirements. Effective: CCS was not in compliance with its grant reporting requirements because the reports were submitted late or unable to be provided. Questioned costs: None. Perspective: For AL 93.047, four of twenty-three reports tested were submitted after the required due date. CCS was not able to provide seven of twenty-three reports selected for testing. Regarding the Aging Cluster, CCS was not able to provide three of seven reports selected for testing. For AL 93.558 two of five reports tested were submitted after the required due date. View of responsible officials: Management concurs with this finding. See corrective action plan.
FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAMS AUDIT 2022-003 Significant Deficiency in Internal Controls over Compliance – Reporting Agency: U.S. Department of Health and Human Services Program(s) and Federal Award Identification Number(s): Special Programs for The Aging – Title III, Part B—Grants For Supportive Services And Senior Centers, Cares Act For Supportive Services Under Title III-B Of The Older Americans Act, And American Rescue Plan For Supportive Services Under Title III-B Of The Older Americans Act AL 93.044 Nutrition Services for Nutrition Services Under Title III-C Of The Older Americans Act, Cares Act For Nutrition Services Under Title III-C Of The Older Americans Act, And American Rescue Plan For Nutrition Services Under Title III-C Of The Older Americans Act AL 93.045 Nutrition Services Incentive Program AL 93.053 Special Programs for the Aging, Title VI, Part A, Grants to Indian Tribes AL 93.047 Children’s Advocacy Centers AL 93.558 New or Repeat: Repeat Criteria: Per 2 CFR 200.303, the non-Federal entity is responsible for maintaining effective internal controls over submissions of financial reports to comply with terms and conditions of Federal Awards. In addition, the grant awards require timely submission of reports. Additionally, per 2 CFR 200.334 “financial records, supporting documents … and all other non-Federal entity records pertinent to the Federal award must be retained for a period of three years from the date of submission of the final expenditure report.” Condition: Internal controls were not sufficiently designed and implemented to ensure that quarterly and annual financial reports were accurate, submitted in a timely manner, and supported by expenditures. We noted certain annual reports were not submitted in a timely manner. Additionally, CCS was unable to provide some of the submitted reports that were selected for testing. Cause: Vacancies in key financial positions and lack of adequate resources in the finance department led to a breakdown of established controls and inadequate monitoring of reporting requirements. Effective: CCS was not in compliance with its grant reporting requirements because the reports were submitted late or unable to be provided. Questioned costs: None. Perspective: For AL 93.047, four of twenty-three reports tested were submitted after the required due date. CCS was not able to provide seven of twenty-three reports selected for testing. Regarding the Aging Cluster, CCS was not able to provide three of seven reports selected for testing. For AL 93.558 two of five reports tested were submitted after the required due date. View of responsible officials: Management concurs with this finding. See corrective action plan.
FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAMS AUDIT 2022-003 Significant Deficiency in Internal Controls over Compliance – Reporting Agency: U.S. Department of Health and Human Services Program(s) and Federal Award Identification Number(s): Special Programs for The Aging – Title III, Part B—Grants For Supportive Services And Senior Centers, Cares Act For Supportive Services Under Title III-B Of The Older Americans Act, And American Rescue Plan For Supportive Services Under Title III-B Of The Older Americans Act AL 93.044 Nutrition Services for Nutrition Services Under Title III-C Of The Older Americans Act, Cares Act For Nutrition Services Under Title III-C Of The Older Americans Act, And American Rescue Plan For Nutrition Services Under Title III-C Of The Older Americans Act AL 93.045 Nutrition Services Incentive Program AL 93.053 Special Programs for the Aging, Title VI, Part A, Grants to Indian Tribes AL 93.047 Children’s Advocacy Centers AL 93.558 New or Repeat: Repeat Criteria: Per 2 CFR 200.303, the non-Federal entity is responsible for maintaining effective internal controls over submissions of financial reports to comply with terms and conditions of Federal Awards. In addition, the grant awards require timely submission of reports. Additionally, per 2 CFR 200.334 “financial records, supporting documents … and all other non-Federal entity records pertinent to the Federal award must be retained for a period of three years from the date of submission of the final expenditure report.” Condition: Internal controls were not sufficiently designed and implemented to ensure that quarterly and annual financial reports were accurate, submitted in a timely manner, and supported by expenditures. We noted certain annual reports were not submitted in a timely manner. Additionally, CCS was unable to provide some of the submitted reports that were selected for testing. Cause: Vacancies in key financial positions and lack of adequate resources in the finance department led to a breakdown of established controls and inadequate monitoring of reporting requirements. Effective: CCS was not in compliance with its grant reporting requirements because the reports were submitted late or unable to be provided. Questioned costs: None. Perspective: For AL 93.047, four of twenty-three reports tested were submitted after the required due date. CCS was not able to provide seven of twenty-three reports selected for testing. Regarding the Aging Cluster, CCS was not able to provide three of seven reports selected for testing. For AL 93.558 two of five reports tested were submitted after the required due date. View of responsible officials: Management concurs with this finding. See corrective action plan.
FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAMS AUDIT 2022-003 Significant Deficiency in Internal Controls over Compliance – Reporting Agency: U.S. Department of Health and Human Services Program(s) and Federal Award Identification Number(s): Special Programs for The Aging – Title III, Part B—Grants For Supportive Services And Senior Centers, Cares Act For Supportive Services Under Title III-B Of The Older Americans Act, And American Rescue Plan For Supportive Services Under Title III-B Of The Older Americans Act AL 93.044 Nutrition Services for Nutrition Services Under Title III-C Of The Older Americans Act, Cares Act For Nutrition Services Under Title III-C Of The Older Americans Act, And American Rescue Plan For Nutrition Services Under Title III-C Of The Older Americans Act AL 93.045 Nutrition Services Incentive Program AL 93.053 Special Programs for the Aging, Title VI, Part A, Grants to Indian Tribes AL 93.047 Children’s Advocacy Centers AL 93.558 New or Repeat: Repeat Criteria: Per 2 CFR 200.303, the non-Federal entity is responsible for maintaining effective internal controls over submissions of financial reports to comply with terms and conditions of Federal Awards. In addition, the grant awards require timely submission of reports. Additionally, per 2 CFR 200.334 “financial records, supporting documents … and all other non-Federal entity records pertinent to the Federal award must be retained for a period of three years from the date of submission of the final expenditure report.” Condition: Internal controls were not sufficiently designed and implemented to ensure that quarterly and annual financial reports were accurate, submitted in a timely manner, and supported by expenditures. We noted certain annual reports were not submitted in a timely manner. Additionally, CCS was unable to provide some of the submitted reports that were selected for testing. Cause: Vacancies in key financial positions and lack of adequate resources in the finance department led to a breakdown of established controls and inadequate monitoring of reporting requirements. Effective: CCS was not in compliance with its grant reporting requirements because the reports were submitted late or unable to be provided. Questioned costs: None. Perspective: For AL 93.047, four of twenty-three reports tested were submitted after the required due date. CCS was not able to provide seven of twenty-three reports selected for testing. Regarding the Aging Cluster, CCS was not able to provide three of seven reports selected for testing. For AL 93.558 two of five reports tested were submitted after the required due date. View of responsible officials: Management concurs with this finding. See corrective action plan.
2022-006 Significant Deficiency in Internal Controls over Compliance – Cash Management Agency: U.S. Department of Health and Human Services Program(s) and Federal Award Identification Number(s): Special Programs for the Aging, Title VI, Part A, Grants to Indian Tribes AL 93.047 New or Repeat: Repeat Criteria: Per 2 CFR 200.303, the non-Federal entity is responsible for maintaining effective internal controls over cash management to comply with terms and conditions of the Federal award. Per CFR 200.305(b), for cost reimbursement awards, the timing of cash draws shall be as close as administratively feasible to the actual disbursements of program costs. Additionally, per 2 CFR 200.334, “financial records, supporting documents . . . and all other non-Federal entity records pertinent to the Federal award must be retained for a period of three years from the date of submission of the final expenditure report.” Condition: Internal controls were not sufficiently designed and implemented to ensure that reimbursement requests were accurate and supported by expenditures incurred prior to the drawdown request. Monthly reimbursement requests were not reviewed by an individual, other than the preparer, to ensure the amount requested agreed to the supporting records. Additionally, the supporting records used to prepare the reimbursement requests were not retained. Reconciliation and monitoring activities were not in place to ensure amounts requested matched recalculated expenditure totals between periods. Cause: Vacancies in key financial positions and lack of adequate resources in the finance department lead to a breakdown of established controls and inadequate monitoring of cash management requirements and documentation. Context: See condition. Effect: Due to the condition of the supporting records and lack of an effective tracking system regarding expenditures already reimbursed, there is potential that CCS could have been reimbursed for the same expense twice or that drawdowns occurred before expenses are incurred. Records had to be recreated in order to complete our audit procedures. Questioned costs: No questioned costs. Recommendation: We recommend management establish policies and procedures to ensure controls are properly designed and implemented to ensure that reimbursement requests are accurate and supported by expenditures incurred. Further, we recommend management develop a tracking spreadsheet to record and monitor monthly reimbursement amounts, as well as the total amount drawndown, over the award’s period of performance. View of responsible officials: Management concurs with this finding, see corrective action plan.
Lost Revenue Information on the Federal Program: HEERF Institutional Portion (AL Number 84.425F) – U.S. Department of Education Criteria or specific requirement: 2 CFR Section 200.334 - 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 passthrough entity in the case of a subrecipient. Higher Education Emergency Relief Fund Lost Revenue Frequently Asked Questions - An institution must adequately document its estimate of lost revenue, including its rationale, calculations, methodology, underlying data, and budgets or projections used to determine the amount of lost revenue. Condition: At the time the lost revenue estimation was made, the University did not contemporaneously document its rationale, calculations, or methodology. Based on a review of parking revenue data subsequently compiled from the previous four years, it was determined that the amount reported as lost revenue in 2022 was reasonable; however, the contemporaneous record retention criteria was not satisfied. Questioned Cost: $-0- Cause: The University did not retain contemporaneously prepared documentation supporting its estimate of lost revenue including its rationale, calculations, and methodology. Effect: Contemporaneously prepared documentation and justification of the lost revenue estimation was not available to be audited. Historical parking revenue data from the previous four years was subsequently compiled and provided to support the amount reported as lost revenue in 2022 was reasonable. Recommendation: We recommend the University review the internal controls over the administration of federal funds to ensure future documentation is created and retained in accordance with specific grant requirements with an emphasis on the specific requirements of grants new to the University.
SNAP-Ed Record Retention Information on the Federal Program: SNAP Cluster (AL Number 10.561) – U.S. Department of Agriculture Criteria: 2 CFR Section 200.334 - 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. State of Kentucky guidance per award number SC7362000001287 and SC362200001080 – the University must submit monthly and quarterly reports to the DCBS Division of Family Support, Director's office. Condition: Monthly and quarterly reports required to be submitted by the University to the State were not adequately retained during the required three-year period beginning July 1, 2021. Questioned Cost: $-0- Cause: The University did not have the proper internal controls in place to ensure that all required reporting documents were retained during the specified three-year period. Effect: Monthly and quarterly reporting for all periods were not available to be audited. Recommendation: We recommend the University review the internal controls over the administration of federal funds to ensure documentation is created and retained in accordance with federal and pass-through requirements.
SNAP-Ed Record Retention Information on the Federal Program: SNAP Cluster (AL Number 10.561) – U.S. Department of Agriculture Criteria: 2 CFR Section 200.334 - 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. State of Kentucky guidance per award number SC7362000001287 and SC362200001080 – the University must submit monthly and quarterly reports to the DCBS Division of Family Support, Director's office. Condition: Monthly and quarterly reports required to be submitted by the University to the State were not adequately retained during the required three-year period beginning July 1, 2021. Questioned Cost: $-0- Cause: The University did not have the proper internal controls in place to ensure that all required reporting documents were retained during the specified three-year period. Effect: Monthly and quarterly reporting for all periods were not available to be audited. Recommendation: We recommend the University review the internal controls over the administration of federal funds to ensure documentation is created and retained in accordance with federal and pass-through requirements.
Program: Child and Adult Care Food Program Assistance Listing Number: 10.558 Federal Agency: U.S. Department of Agriculture Pass-Through Grantor: New York State Department of Health Award Identification: 03256, 03257 Year 2022 Criteria: Eligibility; Subrecipient Monitoring – Entities should retain all financial records, supporting documents, statistical records, and all other records pertinent to the award for a period of three years from the date of submission of expenditure/claim under 2 CFR 200.334. Condition: During the course of our audit procedures performed on eligibility and subrecipient monitoring, there were instances where participant records could not be located for both children and providers. Questioned costs: Unknown. Context: We tested a sample of 49 of 225 children, and 11 of 43 providers for eligibility. No records for the year could be provided for 1 of the selections for compliance, and no evidence of review and approval could be provided for 6 of the records. Additionally, we tested 11 out of 43 providers for subrecipient monitoring. No records could be provided for one of the selections. The sample was not and was not intended to be statistically valid. Effect: We were unable to verify compliance with eligibility and subrecipient monitoring requirements. Cause: The Settlement did not have internal controls in place related to eligibility and subrecipient monitoring. Repeat finding: This is a repeat finding (2021-009). Recommendation: We recommend that the organization revise its documentation storage and retention procedures to ensure maintaining of required documentation. Views of responsible officials and planned corrective actions: The Settlement agrees with the finding. Fiscal and program staff will update CACFP Policies and Procedures to ensure that all CACFP records are retained for a minimum of three years. CACFP eligibility will be clearly documented and retained for three years by program staff. Fiscal and program staff will update CACFP Policies and Procedures to reflect subrecipient eligibility and related paperwork. Staff will be trained on completing and maintaining CACFP enrollment and eligibility paperwork via CACFP online workshops. Managers will complete management KidKare training to optimize electronic recordkeeping of CACFP documentation. The Compliance Director will complete an unannounced monitoring review of enrollment paperwork quarterly. Policies and Procedures will be edited to reflect rules and regulations for enrollment and eligibility paperwork. Implementation began October 2023.
Program: Child and Adult Care Food Program Assistance Listing Number: 10.558 Federal Agency: U.S. Department of Agriculture Pass-Through Grantor: New York State Department of Health Award Identification: 03256, 03257 Year 2022 Criteria: Eligibility; Subrecipient Monitoring – Entities should retain all financial records, supporting documents, statistical records, and all other records pertinent to the award for a period of three years from the date of submission of expenditure/claim under 2 CFR 200.334. Condition: During the course of our audit procedures performed on eligibility and subrecipient monitoring, there were instances where participant records could not be located for both children and providers. Questioned costs: Unknown. Context: We tested a sample of 49 of 225 children, and 11 of 43 providers for eligibility. No records for the year could be provided for 1 of the selections for compliance, and no evidence of review and approval could be provided for 6 of the records. Additionally, we tested 11 out of 43 providers for subrecipient monitoring. No records could be provided for one of the selections. The sample was not and was not intended to be statistically valid. Effect: We were unable to verify compliance with eligibility and subrecipient monitoring requirements. Cause: The Settlement did not have internal controls in place related to eligibility and subrecipient monitoring. Repeat finding: This is a repeat finding (2021-009). Recommendation: We recommend that the organization revise its documentation storage and retention procedures to ensure maintaining of required documentation. Views of responsible officials and planned corrective actions: The Settlement agrees with the finding. Fiscal and program staff will update CACFP Policies and Procedures to ensure that all CACFP records are retained for a minimum of three years. CACFP eligibility will be clearly documented and retained for three years by program staff. Fiscal and program staff will update CACFP Policies and Procedures to reflect subrecipient eligibility and related paperwork. Staff will be trained on completing and maintaining CACFP enrollment and eligibility paperwork via CACFP online workshops. Managers will complete management KidKare training to optimize electronic recordkeeping of CACFP documentation. The Compliance Director will complete an unannounced monitoring review of enrollment paperwork quarterly. Policies and Procedures will be edited to reflect rules and regulations for enrollment and eligibility paperwork. Implementation began October 2023.
Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Agency: U.S. Department of Labor Federal Award Identification: 02HE00012301C6, 02HP000313-01, 02CH11211-03, 02CH01121101C3, 02HP000066-05, 02HP00006603C3, 02CH011112-03, 02CH011112-04, CT9250143, CT9250144 Criteria: Reporting – The organization should retain all financial records, reports, supporting documents, statistical records, and all other records pertinent to the award for a period of three years from the date of submission of expenditure/claim under 2 CFR 200.334. Condition: During the course of our audit procedures performed on reporting, it was noted that the annual report on real property required to be filed, could not be located. In addition, for the eight financial reports that were filed, the supporting information for the amounts included could not be located. Questioned costs: None Context: We requested all reports required to be filed for the expenditures made during the period, which included both financial and special reports, as well as the underlying documentation to support the amounts included in the reports. The organization could not locate the annual report on real property. Additionally, supporting documentation could not be located for the eight financial reports that were filed. Effect: Reports not filed, reviewed, or signed may cause inaccurate information at the award agency and could cause delays in payments or impact future funding. Cause: The Settlement did not have adequate controls and procedures in place to identify reporting requirements and ensure reports were filed timely. Repeat finding: This is a repeat finding (2021-007) Recommendation: We recommend that the organization revise its documentation storage and retention procedures to ensure maintaining of required documentation. In addition, management should implement policies and procedures to ensure required reports are completed and filed by their respective due dates as required by the grant agreement and the Uniform Guidance. Views of responsible officials and planned corrective actions: The Settlement agrees with the finding. The Assistant Controller prepares the form SF-425 reports and the Controller reviews and approves them for submission. These forms and supporting documentation are saved and retained in SharePoint. SF-425 due dates reminders are posted in preparer’s calendar and adherence to the due dates is monitored by the Controller. Implementation began July 2022.
Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Agency: U.S. Department of Labor Federal Award Identification: 02HE00012301C6, 02HP000313-01, 02CH11211-03, 02CH01121101C3, 02HP000066-05, 02HP00006603C3, 02CH011112-03, 02CH011112-04, CT9250143, CT9250144 Criteria: Reporting – The organization should retain all financial records, reports, supporting documents, statistical records, and all other records pertinent to the award for a period of three years from the date of submission of expenditure/claim under 2 CFR 200.334. Condition: During the course of our audit procedures performed on reporting, it was noted that the annual report on real property required to be filed, could not be located. In addition, for the eight financial reports that were filed, the supporting information for the amounts included could not be located. Questioned costs: None Context: We requested all reports required to be filed for the expenditures made during the period, which included both financial and special reports, as well as the underlying documentation to support the amounts included in the reports. The organization could not locate the annual report on real property. Additionally, supporting documentation could not be located for the eight financial reports that were filed. Effect: Reports not filed, reviewed, or signed may cause inaccurate information at the award agency and could cause delays in payments or impact future funding. Cause: The Settlement did not have adequate controls and procedures in place to identify reporting requirements and ensure reports were filed timely. Repeat finding: This is a repeat finding (2021-007) Recommendation: We recommend that the organization revise its documentation storage and retention procedures to ensure maintaining of required documentation. In addition, management should implement policies and procedures to ensure required reports are completed and filed by their respective due dates as required by the grant agreement and the Uniform Guidance. Views of responsible officials and planned corrective actions: The Settlement agrees with the finding. The Assistant Controller prepares the form SF-425 reports and the Controller reviews and approves them for submission. These forms and supporting documentation are saved and retained in SharePoint. SF-425 due dates reminders are posted in preparer’s calendar and adherence to the due dates is monitored by the Controller. Implementation began July 2022.
Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Agency: U.S. Department of Labor Federal Award Identification: 02HE00012301C6, 02HP000313-01, 02CH11211-03, 02CH01121101C3, 02HP000066-05, 02HP00006603C3, 02CH011112-03, 02CH011112-04, CT9250143, CT9250144 Criteria: Reporting – The organization should retain all financial records, reports, supporting documents, statistical records, and all other records pertinent to the award for a period of three years from the date of submission of expenditure/claim under 2 CFR 200.334. Condition: During the course of our audit procedures performed on reporting, it was noted that the annual report on real property required to be filed, could not be located. In addition, for the eight financial reports that were filed, the supporting information for the amounts included could not be located. Questioned costs: None Context: We requested all reports required to be filed for the expenditures made during the period, which included both financial and special reports, as well as the underlying documentation to support the amounts included in the reports. The organization could not locate the annual report on real property. Additionally, supporting documentation could not be located for the eight financial reports that were filed. Effect: Reports not filed, reviewed, or signed may cause inaccurate information at the award agency and could cause delays in payments or impact future funding. Cause: The Settlement did not have adequate controls and procedures in place to identify reporting requirements and ensure reports were filed timely. Repeat finding: This is a repeat finding (2021-007) Recommendation: We recommend that the organization revise its documentation storage and retention procedures to ensure maintaining of required documentation. In addition, management should implement policies and procedures to ensure required reports are completed and filed by their respective due dates as required by the grant agreement and the Uniform Guidance. Views of responsible officials and planned corrective actions: The Settlement agrees with the finding. The Assistant Controller prepares the form SF-425 reports and the Controller reviews and approves them for submission. These forms and supporting documentation are saved and retained in SharePoint. SF-425 due dates reminders are posted in preparer’s calendar and adherence to the due dates is monitored by the Controller. Implementation began July 2022.
Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Agency: U.S. Department of Labor Federal Award Identification: 02HE00012301C6, 02HP000313-01, 02CH11211-03, 02CH01121101C3, 02HP000066-05, 02HP00006603C3, 02CH011112-03, 02CH011112-04, CT9250143, CT9250144 Criteria: Reporting – The organization should retain all financial records, reports, supporting documents, statistical records, and all other records pertinent to the award for a period of three years from the date of submission of expenditure/claim under 2 CFR 200.334. Condition: During the course of our audit procedures performed on reporting, it was noted that the annual report on real property required to be filed, could not be located. In addition, for the eight financial reports that were filed, the supporting information for the amounts included could not be located. Questioned costs: None Context: We requested all reports required to be filed for the expenditures made during the period, which included both financial and special reports, as well as the underlying documentation to support the amounts included in the reports. The organization could not locate the annual report on real property. Additionally, supporting documentation could not be located for the eight financial reports that were filed. Effect: Reports not filed, reviewed, or signed may cause inaccurate information at the award agency and could cause delays in payments or impact future funding. Cause: The Settlement did not have adequate controls and procedures in place to identify reporting requirements and ensure reports were filed timely. Repeat finding: This is a repeat finding (2021-007) Recommendation: We recommend that the organization revise its documentation storage and retention procedures to ensure maintaining of required documentation. In addition, management should implement policies and procedures to ensure required reports are completed and filed by their respective due dates as required by the grant agreement and the Uniform Guidance. Views of responsible officials and planned corrective actions: The Settlement agrees with the finding. The Assistant Controller prepares the form SF-425 reports and the Controller reviews and approves them for submission. These forms and supporting documentation are saved and retained in SharePoint. SF-425 due dates reminders are posted in preparer’s calendar and adherence to the due dates is monitored by the Controller. Implementation began July 2022.
Condition: Finding Costs Charged to the Federal Program Not Supported by Sufficient Documentation (Material Weakness – Allowable Costs) Information on the Federal Programs: Child Nutrition Cluster: 10.553, 10.555, 10.559 Questioned Costs $33,572 During testing over allowable costs, it was noted that 20 out of 40 transactions of costs charged to the federal program were not supported by documentation as required by the Uniform Guidance (2 CFR 200, Subparts D Post Federal Award Requirements and E Cost Principles). Criteria: Uniform Guidance 2 CFR 200, Subparts D Post Federal Award Requirements and E Cost Principles. Per 2 CFR §200.334 Retention Requirements for Records, supporting documentation must be retained for a period of three years. Cause: Documentation was not maintained for costs charged to the federal program to support that expenditures were allowable per 2 CFR 200 Subpart E Cost Principles. Effect: Potential effects include unallowed costs being charged to federal programs resulting in possible reduction in funding. Isolated Instance or Systemic Problem: We consider this to be a systemic problem. Repeat of Prior Year Finding: No. Recommendation: We recommend that the School Department implement a system of controls including policies and procedures on maintaining documentation for costs charged to federal award programs where supporting documentation is accessible by management or other responsible individuals.
Condition: Finding Costs Charged to the Federal Program Not Supported by Sufficient Documentation (Material Weakness – Allowable Costs) Information on the Federal Programs: Child Nutrition Cluster: 10.553, 10.555, 10.559 Questioned Costs $33,572 During testing over allowable costs, it was noted that 20 out of 40 transactions of costs charged to the federal program were not supported by documentation as required by the Uniform Guidance (2 CFR 200, Subparts D Post Federal Award Requirements and E Cost Principles). Criteria: Uniform Guidance 2 CFR 200, Subparts D Post Federal Award Requirements and E Cost Principles. Per 2 CFR §200.334 Retention Requirements for Records, supporting documentation must be retained for a period of three years. Cause: Documentation was not maintained for costs charged to the federal program to support that expenditures were allowable per 2 CFR 200 Subpart E Cost Principles. Effect: Potential effects include unallowed costs being charged to federal programs resulting in possible reduction in funding. Isolated Instance or Systemic Problem: We consider this to be a systemic problem. Repeat of Prior Year Finding: No. Recommendation: We recommend that the School Department implement a system of controls including policies and procedures on maintaining documentation for costs charged to federal award programs where supporting documentation is accessible by management or other responsible individuals.
Condition: Finding Costs Charged to the Federal Program Not Supported by Sufficient Documentation (Material Weakness – Allowable Costs) Information on the Federal Programs: Child Nutrition Cluster: 10.553, 10.555, 10.559 Questioned Costs $33,572 During testing over allowable costs, it was noted that 20 out of 40 transactions of costs charged to the federal program were not supported by documentation as required by the Uniform Guidance (2 CFR 200, Subparts D Post Federal Award Requirements and E Cost Principles). Criteria: Uniform Guidance 2 CFR 200, Subparts D Post Federal Award Requirements and E Cost Principles. Per 2 CFR §200.334 Retention Requirements for Records, supporting documentation must be retained for a period of three years. Cause: Documentation was not maintained for costs charged to the federal program to support that expenditures were allowable per 2 CFR 200 Subpart E Cost Principles. Effect: Potential effects include unallowed costs being charged to federal programs resulting in possible reduction in funding. Isolated Instance or Systemic Problem: We consider this to be a systemic problem. Repeat of Prior Year Finding: No. Recommendation: We recommend that the School Department implement a system of controls including policies and procedures on maintaining documentation for costs charged to federal award programs where supporting documentation is accessible by management or other responsible individuals.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS17SOUTHWEST DUBOIS COUNTY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)One of five annual reports required to be completed during the audit period contained materialerrors. The Elementary and Secondary School Emergency Relief (ESSER I), Year 1 annual data reportoverstated total expenditures made between March 13, 2020, and September, 30, 2020, by $130,918. Inaddition, documentation provided for the number of full-time employee positions did not support theamounts reported.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa 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 Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, 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 formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS18SOUTHWEST DUBOIS COUNTY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the Reporting compliance requirement couldresult in the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS17SOUTHWEST DUBOIS COUNTY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)One of five annual reports required to be completed during the audit period contained materialerrors. The Elementary and Secondary School Emergency Relief (ESSER I), Year 1 annual data reportoverstated total expenditures made between March 13, 2020, and September, 30, 2020, by $130,918. Inaddition, documentation provided for the number of full-time employee positions did not support theamounts reported.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa 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 Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, 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 formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS18SOUTHWEST DUBOIS COUNTY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the Reporting compliance requirement couldresult in the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-010Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Modified OpinionINDIANA STATE BOARD OF ACCOUNTS33BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed or implemented at the School Corporation toensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reportstested, the Reports were not supported by the unit's records. The financial information provided did notagree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports.Additionally, seven of seven key line items selected for testing could not be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in?? 200.328 and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa subrecipient. . . ."INDIANA STATE BOARD OF ACCOUNTS34BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to design and implement an effective internal control system enabled noncompliance togo undetected with the Reporting compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.INDIANA STATE BOARD OF ACCOUNTS35
FINDING 2022-010Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Modified OpinionINDIANA STATE BOARD OF ACCOUNTS33BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed or implemented at the School Corporation toensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reportstested, the Reports were not supported by the unit's records. The financial information provided did notagree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports.Additionally, seven of seven key line items selected for testing could not be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in?? 200.328 and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa subrecipient. . . ."INDIANA STATE BOARD OF ACCOUNTS34BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to design and implement an effective internal control system enabled noncompliance togo undetected with the Reporting compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.INDIANA STATE BOARD OF ACCOUNTS35
FINDING 2022-010Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Modified OpinionINDIANA STATE BOARD OF ACCOUNTS33BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed or implemented at the School Corporation toensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reportstested, the Reports were not supported by the unit's records. The financial information provided did notagree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports.Additionally, seven of seven key line items selected for testing could not be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in?? 200.328 and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa subrecipient. . . ."INDIANA STATE BOARD OF ACCOUNTS34BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to design and implement an effective internal control system enabled noncompliance togo undetected with the Reporting compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.INDIANA STATE BOARD OF ACCOUNTS35
FINDING 2022-010Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Modified OpinionINDIANA STATE BOARD OF ACCOUNTS33BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed or implemented at the School Corporation toensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reportstested, the Reports were not supported by the unit's records. The financial information provided did notagree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports.Additionally, seven of seven key line items selected for testing could not be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in?? 200.328 and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa subrecipient. . . ."INDIANA STATE BOARD OF ACCOUNTS34BLACKFORD COUNTY SCHOOLSSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to design and implement an effective internal control system enabled noncompliance togo undetected with the Reporting compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.INDIANA STATE BOARD OF ACCOUNTS35
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS22MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed nor implemented at the School Corporationto ensure compliance with the requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation filed the four required Elementary and Secondary School EmergencyRelief (ESSER) annual data reports. However, the ESSER I, Year 1 and ESSER I, Year 2 reports werenot supported by the School Corporation's records. For each of the reports, two key line items wereselected for verification, none of the line items tested were supported by the School Corporation's records.For the ESSER I, Year 2 report the data included expenditures for two months beyond the reporting period.The lack of internal controls and noncompliance were applicable to the ESSER I grant during theaudit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa 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 Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, obligations, unobligated balances, assets, expenditures,income and interest and be supported by source documentation. . . ."INDIANA STATE BOARD OF ACCOUNTS23MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not designed, nor implemented a system of internal controls that would haveensured compliance or that supporting documentation would have been maintained and available for auditrelated to the Reporting compliance requirement.EffectThe failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Noncompliancewith the grant agreement and the Reporting compliance requirement could result in the loss of future federalfunds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and available for audit and comply with the grantagreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS22MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed nor implemented at the School Corporationto ensure compliance with the requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation filed the four required Elementary and Secondary School EmergencyRelief (ESSER) annual data reports. However, the ESSER I, Year 1 and ESSER I, Year 2 reports werenot supported by the School Corporation's records. For each of the reports, two key line items wereselected for verification, none of the line items tested were supported by the School Corporation's records.For the ESSER I, Year 2 report the data included expenditures for two months beyond the reporting period.The lack of internal controls and noncompliance were applicable to the ESSER I grant during theaudit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa 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 Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, obligations, unobligated balances, assets, expenditures,income and interest and be supported by source documentation. . . ."INDIANA STATE BOARD OF ACCOUNTS23MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not designed, nor implemented a system of internal controls that would haveensured compliance or that supporting documentation would have been maintained and available for auditrelated to the Reporting compliance requirement.EffectThe failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Noncompliancewith the grant agreement and the Reporting compliance requirement could result in the loss of future federalfunds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and available for audit and comply with the grantagreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D20013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not designed, nor implemented, at the School Corporationto ensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. The Reports were prepared byone employee without an oversite or review process in place to prevent, or detect and correct, errors.Additionally, one of the four Reports tested was not supported by the School Corporation's records.The financial information provided did not agree to all the data submitted in the Report; therefore, we couldnot determine the accuracy of the Report. Additionally, two of six key line items selected for testing couldnot be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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.. . ."34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the Reporting compliance requirement could resultin the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D20013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not designed, nor implemented, at the School Corporationto ensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. The Reports were prepared byone employee without an oversite or review process in place to prevent, or detect and correct, errors.Additionally, one of the four Reports tested was not supported by the School Corporation's records.The financial information provided did not agree to all the data submitted in the Report; therefore, we couldnot determine the accuracy of the Report. Additionally, two of six key line items selected for testing couldnot be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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.. . ."34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the Reporting compliance requirement could resultin the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D20013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not designed, nor implemented, at the School Corporationto ensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. The Reports were prepared byone employee without an oversite or review process in place to prevent, or detect and correct, errors.Additionally, one of the four Reports tested was not supported by the School Corporation's records.The financial information provided did not agree to all the data submitted in the Report; therefore, we couldnot determine the accuracy of the Report. Additionally, two of six key line items selected for testing couldnot be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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.. . ."34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the Reporting compliance requirement could resultin the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D20013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not designed, nor implemented, at the School Corporationto ensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. The Reports were prepared byone employee without an oversite or review process in place to prevent, or detect and correct, errors.Additionally, one of the four Reports tested was not supported by the School Corporation's records.The financial information provided did not agree to all the data submitted in the Report; therefore, we couldnot determine the accuracy of the Report. Additionally, two of six key line items selected for testing couldnot be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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.. . ."34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the Reporting compliance requirement could resultin the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
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 Type of Finding: Significant Deficiency in Internal Control over Compliance with Federal Awards Criteria: The Organization should have effective internal controls in place over review of intake forms, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, it was noted that there was not an effective review of intake forms. Context: During testing, 6 of 60 intake forms tested to not contain appropriate signatures by individuals or management noting approval. The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: N/A Cause/Effect: Internal control processes over intake forms were not operating effectively from July 2021 through June 2022. Identification of Repeat Finding: N/A Recommendation: We recommend that Cornerstones implements a review process to ensure that intake forms are complete and accurate as possess all appropriate signatures. Views of Responsible Officials and Correction Action: Management’s response is reported in “Management’s Views and Corrective Action Plan” included at the end of this report.
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 Type of Finding: Significant Deficiency in Internal Control over Compliance with Federal Awards Criteria: The Organization should have processes and procedures in place to keep and maintain client records, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, we noted that the Organization was unable to find supporting records for individuals that received services as part of a federal program, leading to noncompliance with the program. Context: During testing, 4 of 60 individuals tested did not have the appropriate records. 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 eligibility documentation to not be located. Questioned Costs: N/A Identification of Repeat Finding: N/A Recommendation: We recommend procedures are implemented to ensure proper maintenance of client records. Views of Responsible Officials and Correction Action: Management’s response is reported in “Management’s Views and Corrective Action Plan” included at the end of this report.
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 Type of Finding: Significant Deficiency in Internal Control over Compliance with Federal Awards Criteria: The Organization should have effective internal controls in place over review of intake forms, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, it was noted that there was not an effective review of intake forms. Context: During testing, 6 of 60 intake forms tested to not contain appropriate signatures by individuals or management noting approval. The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: N/A Cause/Effect: Internal control processes over intake forms were not operating effectively from July 2021 through June 2022. Identification of Repeat Finding: N/A Recommendation: We recommend that Cornerstones implements a review process to ensure that intake forms are complete and accurate as possess all appropriate signatures. Views of Responsible Officials and Correction Action: Management’s response is reported in “Management’s Views and Corrective Action Plan” included at the end of this report.
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 Type of Finding: Significant Deficiency in Internal Control over Compliance with Federal Awards Criteria: The Organization should have processes and procedures in place to keep and maintain client records, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, we noted that the Organization was unable to find supporting records for individuals that received services as part of a federal program, leading to noncompliance with the program. Context: During testing, 4 of 60 individuals tested did not have the appropriate records. 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 eligibility documentation to not be located. Questioned Costs: N/A Identification of Repeat Finding: N/A Recommendation: We recommend procedures are implemented to ensure proper maintenance of client records. Views of Responsible Officials and Correction Action: Management’s response is reported in “Management’s Views and Corrective Action Plan” included at the end of this report.
Criteria: The Organization is required to establish and maintain effective internal controls over financial documentation to ensure compliance with federal regulations, as outlined in 2 CFR 200.303 and 2 CFR 200.334 of the Uniform Guidance. These controls are crucial for the accurate management and reporting of federal funds. Statement of Condition: During our audit, it was identified that the Organization could not locate invoices or check stubs for five out of sixty items tested for non-payroll expenses within a major federal program. Cause: The existing internal control processes related to the organization and retrieval of financial documentation appear to be insufficient, a situation that was exacerbated by staffing shortages during the period under audit. Addressing these challenges through enhanced processes and adequate staffing could improve the Organization's ability to provide timely and complete documentation. Effect or Potential Effect: The inability to produce essential financial documentation may lead to compliance challenges with federal funding requirements. Additionally, this increases the risk of questioned costs, which could have financial implications for the Organization if not rectified. Recommendation: It is recommended that the Organization implement enhanced procedures for the systematic maintenance and retrieval of all financial records related to expenditures. This should include staff training on these protocols to ensure compliance and improve overall internal controls. Management’s Response: Management agrees with this finding. Please refer to the Corrective Action Plan for further details.
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 – 1,839 items totaling $1,243,944 • ALN No. 93.788 – 1,502 items totaling $2,285,983 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 - 51 items totaling $26,145, including projected errors over the total population totaling $348,063 • ALN No. 93.788 - 6 items totaling $18,183, including projected errors over the total population totaling $165,074 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 - $26,145 • ALN No. 93.788 - $18,183 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 – Not a repeat finding 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 – 1,839 items totaling $1,243,944 • ALN No. 93.788 – 1,502 items totaling $2,285,983 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 - 51 items totaling $26,145, including projected errors over the total population totaling $348,063 • ALN No. 93.788 - 6 items totaling $18,183, including projected errors over the total population totaling $165,074 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 - $26,145 • ALN No. 93.788 - $18,183 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 – Not a repeat finding 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.
2022-002 Improve Internal Controls and Documentation over Allowable Costs and Eligibility Determinations Federal Program Information Federal Agency: Department of the Treasury Award Name: COVID-19 Emergency Rental Assistance Program Assistance Listing Number: 21.023 Award Year: 2022 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement Per 2 CFR 200.303, the County is required to establish and maintain effective internal controls over federal programs to provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the award. Additionally, 2 CFR 200.334 requires the retention of records and supporting documentation to demonstrate eligibility determinations and allowability of expenditures under the program. Condition and Context During our audit, we tested a sample of 40 selections for allowable costs, as well as a sample of 40 for individual eligibility determinations under the program in which 35 selections were leveraged between the two tests. For 8 of the items selected for testing under allowable cost compliance and eligibility requirements, the County was unable to provide some or all of the required supporting documentation to demonstrate that individuals met the program’s eligibility requirements and that costs were allowable. The documentation was retained in an online portal to which the County no longer had access at the time of our audit procedures. Cause The County did not establish sufficient procedures or controls to ensure ongoing access to required supporting documentation maintained in the external portal used for program administration. Effect or Potential Effect Due to the weakness in internal controls noted above, the County could not demonstrate compliance with eligibility and allowable cost requirements for the sampled transactions. This also constitutes noncompliance with record retention requirements and impairs the ability for sufficient procedures to be performed over the program. Questioned Costs Due to the condition noted above, we were unable to determine if the costs charged to the applicable grant are allowable. Recommendation The County should implement policies and procedures to ensure required documentation for the program is retained in a manner that ensures continued access, even if administration platforms change or external portals are no longer accessible. The County should also periodically verify that it retains all necessary support for program transactions as required under federal regulations. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Assistance Listings number and name: 12.401 National Guard Military Operations and Maintenance (O&M) Projects Award numbers and years: W912L2-21-2-1000, October 1, 2020 through September 30, 2021; W912L2-22-2-1000, October 1, 2021 through September 30, 2022 Federal agency: U.S. Department of Defense Compliance requirements: Activities allowed or unallowed and allowable costs/cost principles Questioned costs: $125,288 Condition—Contrary to federal regulations and its policies, the Department of Emergency Military Affairs (Department) did not always retain documentation supporting the payroll costs it charged to the program. Specifically, the Department had not retained the personnel action forms supporting and approving employees’ pay rates and authorizing them to work on the program for 4 of 21 employees we tested, as follows: • $123,968 for 3 employees’ annual payroll costs and employee-related expenses for which each employee’s salaries and wages and authorization to work on the program were not supported by documented personnel action forms. • $1,320 for 1 employee whose previous personnel action form authorized their working on the program but whose most recent pay rate increase was not supported by a documented personnel action form. Effect—The Department’s failure to retain documentation supporting payroll costs could potentially result in the Department being required to return monies spent on unallowable costs to the federal agency or adjust its program’s costs so that monies are spent for allowable costs.1 During fiscal year 2022, the Department paid 323 employees $15,486,984 of salaries and wages, including employee-related expenses, that were charged to the program. There is a risk that the Department could have potentially charged additional payroll costs to the program without maintaining the required supporting documentation. Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—The Department’s Administrative Services Office (Office) was not adequately trained to follow the documentation and record retention policy. Specifically, the Office reported that it did not retain the personnel action records as they were unaware that all employee personnel records were required to be retained for 5 years after an employee’s termination. Instead, the Office interpreted the policy to only require these documents to be retained for 5 years after the documents were originally created. Criteria—The Department’s record retention policies require its Administrative Services Office to 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.2 Federal regulation requires the Department to retain all records 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). Also, federal regulation requires the Department to maintain records for salaries and wages charged to federal awards that accurately reflect the work performed and are supported by policies and internal controls to ensure they are accurate, allowable, and properly allocated (2 CFR §200.430[i][1][i]). 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—The Department should: 1. Ensure documentation is retained for all personnel actions to demonstrate employees’ salaries and wages, including employee-related expenses, are authorized to be charged to the program. 2. Review all employee personnel files for employees currently paid under the program to ensure the required documentation has been retained. If the documentation has not been retained, program management should review the employees’ activities to ensure they are allowable under the program and prepare and retain the required documentation. Further, if employee activities are determined to be unallowable, coordinate with the U.S. Department of Defense to adjust future federal reimbursement requests or repay any unallowable costs the Department charged to the program. 3. Train its Administrative Services Office and Department employees who are responsible for administering federal programs on the documentation and record retention requirements for payroll costs charged to federal programs. The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the Office, 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 Arizona Department of Emergency Military Affairs (DEMA), State Human Resources Administration. (2007, October). DEMA Directive 20.1, section 1.3. Retrieved 9/13/2023 from https://dema.az.gov/sites/default/files/2023-08/20.1_State_Human_Resources_Administration_20071001.pdf.
Assistance Listings number and name: 12.401 National Guard Military Operations and Maintenance (O&M) Projects Award numbers and years: W912L2-21-2-1000, October 1, 2020 through September 30, 2021; W912L2-22-2-1000, October 1, 2021 through September 30, 2022 Federal agency: U.S. Department of Defense Compliance requirements: Activities allowed or unallowed and allowable costs/cost principles Questioned costs: $125,288 Condition—Contrary to federal regulations and its policies, the Department of Emergency Military Affairs (Department) did not always retain documentation supporting the payroll costs it charged to the program. Specifically, the Department had not retained the personnel action forms supporting and approving employees’ pay rates and authorizing them to work on the program for 4 of 21 employees we tested, as follows: • $123,968 for 3 employees’ annual payroll costs and employee-related expenses for which each employee’s salaries and wages and authorization to work on the program were not supported by documented personnel action forms. • $1,320 for 1 employee whose previous personnel action form authorized their working on the program but whose most recent pay rate increase was not supported by a documented personnel action form. Effect—The Department’s failure to retain documentation supporting payroll costs could potentially result in the Department being required to return monies spent on unallowable costs to the federal agency or adjust its program’s costs so that monies are spent for allowable costs.1 During fiscal year 2022, the Department paid 323 employees $15,486,984 of salaries and wages, including employee-related expenses, that were charged to the program. There is a risk that the Department could have potentially charged additional payroll costs to the program without maintaining the required supporting documentation. Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—The Department’s Administrative Services Office (Office) was not adequately trained to follow the documentation and record retention policy. Specifically, the Office reported that it did not retain the personnel action records as they were unaware that all employee personnel records were required to be retained for 5 years after an employee’s termination. Instead, the Office interpreted the policy to only require these documents to be retained for 5 years after the documents were originally created. Criteria—The Department’s record retention policies require its Administrative Services Office to 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.2 Federal regulation requires the Department to retain all records 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). Also, federal regulation requires the Department to maintain records for salaries and wages charged to federal awards that accurately reflect the work performed and are supported by policies and internal controls to ensure they are accurate, allowable, and properly allocated (2 CFR §200.430[i][1][i]). 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—The Department should: 1. Ensure documentation is retained for all personnel actions to demonstrate employees’ salaries and wages, including employee-related expenses, are authorized to be charged to the program. 2. Review all employee personnel files for employees currently paid under the program to ensure the required documentation has been retained. If the documentation has not been retained, program management should review the employees’ activities to ensure they are allowable under the program and prepare and retain the required documentation. Further, if employee activities are determined to be unallowable, coordinate with the U.S. Department of Defense to adjust future federal reimbursement requests or repay any unallowable costs the Department charged to the program. 3. Train its Administrative Services Office and Department employees who are responsible for administering federal programs on the documentation and record retention requirements for payroll costs charged to federal programs. The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the Office, 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 Arizona Department of Emergency Military Affairs (DEMA), State Human Resources Administration. (2007, October). DEMA Directive 20.1, section 1.3. Retrieved 9/13/2023 from https://dema.az.gov/sites/default/files/2023-08/20.1_State_Human_Resources_Administration_20071001.pdf.
Assistance Listings number and name: 21.023 COVID-19 Emergency Rental Assistance Program Award numbers and years: ERA-2101070596, January 8, 2021, through September 30, 2022; ERA2-0165, May 10, 2021 through September 30, 2025 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal law and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) 1 and 2 programs, the Department of Economic Security—Division of Community Assistance and Development (Division) did not retain documentation to support and/or accurately report some information. Further, it did not retain some reports submitted to the federal agency or the associated documentation.1 Specifically, for 8 reports we selected for test work, we found the following: • The Division did not retain some documentation—The Division did not retain documentation, like system reports, queries, or screenshots, to support the information it reported on 3 monthly reports: the ERA 1 October 2021 and March 2022 compliance reports and the ERA 2 May 2022 compliance report. • The Division did not accurately report some information—The Division failed to report any expenditures for the ERA 2 November 2021 monthly report even though we identified ERA 2 expenditures recorded during the month in the system. It also incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures, project data, and participant demographics in all amounts reported as being all ERA 1 program information for the ERA 1 October 1, 2021 through December 31, 2021, compliance report. Finally, it incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures as being all ERA 1 program applicant expenditures within the cash disbursements and the federal share of expenditures line items rather than reporting this information for both programs separately as required, and understated cash receipts and the federal share of unliquidated obligations by $19.2 million and $4.1 million, respectively, for the ERA 1 October 1, 2021 through December 31, 2021, financial report. • The Division did not retain reports and associated documentation—The Division did not provide us the reports and related supporting documentation for the ERA 2 April 1, 2022 through June 30, 2022, compliance report and financial report even though the federal agency website indicated the reports were submitted. Therefore, we were unable to test them. Effect—The Division’s reporting inaccurate or unsupported program information and not retaining reports and associated documentation for audit purposes results in the federal agency being unable to rely on the reports to effectively 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. Cause—The Division reported that it contracted to use a new benefits system for the ERA program in March 2021 and relied on the system’s federal reporting dashboard screen for the summarized program information to compile its reports. Although the Division’s policy was to record applicant expenditures for months 1-15 to ERA 1 and months 16-18 to ERA 2, this was not the criteria established for the federal reporting dashboard until February 1, 2022, when the contractor corrected the system programming error, which resulted in the Division reporting ERA 2 information as ERA 1 information in all monthly and quarterly reports prior to February 1, 2022. When implementing the new system and after the contractor corrected the system programming error, the Division did not verify that the federal reporting dashboard reported complete program information and accurately summarized the underlying system data. Additionally, during the ERA reporting review and approval process, the Division did not verify the reported program information and the federal reporting dashboard to the underlying system data. Finally, the Division did not follow its policies and procedures to retain submitted reports or documentation to support the information it reported. Criteria—Federal law and guidance require the Division to separately report and certify accurate and complete program information for each ERA award to the federal agency. For the monthly reports, the Division is required to report monthly key information, such as the number of participating households that received ERA of any kind and the total ERA monies expended to or for participating households on behalf of eligible households, which is used by the federal agency for reallocation purposes. For the quarterly financial and compliance reports, the Division is required to report information, such as cash it disbursed, the federal share of expenditures, unliquidated obligations, and the cumulative amounts it obligated and expended so that the federal agency could monitor performance and compliance, including funding needs and the spending of any reallocated monies.2 In addition, the Division’s policies and procedures and federal regulation requires the Division 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). Further, 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—The Division should: 1. Develop and implement written policies and procedures to ensure the system used to process ERA claims and report program information produces summarized data on its federal reporting dashboard that are complete and accurate and comply with the federal agency’s reporting guidelines. 2. Follow its policies and procedures 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. Verify the ERA-reported program information and the federal reporting dashboard to the underlying system data during each report’s review and approval process. 4. Prepare and retain detailed documentation and submitted reports, such as system reports, queries, or screenshots, to support the program information it reports to the federal agency for each ERA award. The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The ERA Program 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. The initial ERA program is referred to as ERA 1. ERA 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 U.S. Department of the Treasury. (2022, December). Reporting Guidance—Emergency Rental Assistance Program, Version 3.4. Monthly, Quarterly, and Final Reporting. Retrieved 9/20/2023 from https://home.treasury.gov/system/files/136/ERA-Reporting-Guidance-v2.pdf
Assistance Listings number and name: 21.023 COVID-19 Emergency Rental Assistance Program Award numbers and years: ERA-2101070596, January 8, 2021, through September 30, 2022; ERA2-0165, May 10, 2021 through September 30, 2025 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal law and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) 1 and 2 programs, the Department of Economic Security—Division of Community Assistance and Development (Division) did not retain documentation to support and/or accurately report some information. Further, it did not retain some reports submitted to the federal agency or the associated documentation.1 Specifically, for 8 reports we selected for test work, we found the following: • The Division did not retain some documentation—The Division did not retain documentation, like system reports, queries, or screenshots, to support the information it reported on 3 monthly reports: the ERA 1 October 2021 and March 2022 compliance reports and the ERA 2 May 2022 compliance report. • The Division did not accurately report some information—The Division failed to report any expenditures for the ERA 2 November 2021 monthly report even though we identified ERA 2 expenditures recorded during the month in the system. It also incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures, project data, and participant demographics in all amounts reported as being all ERA 1 program information for the ERA 1 October 1, 2021 through December 31, 2021, compliance report. Finally, it incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures as being all ERA 1 program applicant expenditures within the cash disbursements and the federal share of expenditures line items rather than reporting this information for both programs separately as required, and understated cash receipts and the federal share of unliquidated obligations by $19.2 million and $4.1 million, respectively, for the ERA 1 October 1, 2021 through December 31, 2021, financial report. • The Division did not retain reports and associated documentation—The Division did not provide us the reports and related supporting documentation for the ERA 2 April 1, 2022 through June 30, 2022, compliance report and financial report even though the federal agency website indicated the reports were submitted. Therefore, we were unable to test them. Effect—The Division’s reporting inaccurate or unsupported program information and not retaining reports and associated documentation for audit purposes results in the federal agency being unable to rely on the reports to effectively 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. Cause—The Division reported that it contracted to use a new benefits system for the ERA program in March 2021 and relied on the system’s federal reporting dashboard screen for the summarized program information to compile its reports. Although the Division’s policy was to record applicant expenditures for months 1-15 to ERA 1 and months 16-18 to ERA 2, this was not the criteria established for the federal reporting dashboard until February 1, 2022, when the contractor corrected the system programming error, which resulted in the Division reporting ERA 2 information as ERA 1 information in all monthly and quarterly reports prior to February 1, 2022. When implementing the new system and after the contractor corrected the system programming error, the Division did not verify that the federal reporting dashboard reported complete program information and accurately summarized the underlying system data. Additionally, during the ERA reporting review and approval process, the Division did not verify the reported program information and the federal reporting dashboard to the underlying system data. Finally, the Division did not follow its policies and procedures to retain submitted reports or documentation to support the information it reported. Criteria—Federal law and guidance require the Division to separately report and certify accurate and complete program information for each ERA award to the federal agency. For the monthly reports, the Division is required to report monthly key information, such as the number of participating households that received ERA of any kind and the total ERA monies expended to or for participating households on behalf of eligible households, which is used by the federal agency for reallocation purposes. For the quarterly financial and compliance reports, the Division is required to report information, such as cash it disbursed, the federal share of expenditures, unliquidated obligations, and the cumulative amounts it obligated and expended so that the federal agency could monitor performance and compliance, including funding needs and the spending of any reallocated monies.2 In addition, the Division’s policies and procedures and federal regulation requires the Division 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). Further, 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—The Division should: 1. Develop and implement written policies and procedures to ensure the system used to process ERA claims and report program information produces summarized data on its federal reporting dashboard that are complete and accurate and comply with the federal agency’s reporting guidelines. 2. Follow its policies and procedures 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. Verify the ERA-reported program information and the federal reporting dashboard to the underlying system data during each report’s review and approval process. 4. Prepare and retain detailed documentation and submitted reports, such as system reports, queries, or screenshots, to support the program information it reports to the federal agency for each ERA award. The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The ERA Program 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. The initial ERA program is referred to as ERA 1. ERA 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 U.S. Department of the Treasury. (2022, December). Reporting Guidance—Emergency Rental Assistance Program, Version 3.4. Monthly, Quarterly, and Final Reporting. Retrieved 9/20/2023 from https://home.treasury.gov/system/files/136/ERA-Reporting-Guidance-v2.pdf
Assistance Listings number and name: 21.023 COVID-19 Emergency Rental Assistance Program Award numbers and years: ERA-2101070596, January 8, 2021, through September 30, 2022; ERA2-0165, May 10, 2021 through September 30, 2025 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal law and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) 1 and 2 programs, the Department of Economic Security—Division of Community Assistance and Development (Division) did not retain documentation to support and/or accurately report some information. Further, it did not retain some reports submitted to the federal agency or the associated documentation.1 Specifically, for 8 reports we selected for test work, we found the following: • The Division did not retain some documentation—The Division did not retain documentation, like system reports, queries, or screenshots, to support the information it reported on 3 monthly reports: the ERA 1 October 2021 and March 2022 compliance reports and the ERA 2 May 2022 compliance report. • The Division did not accurately report some information—The Division failed to report any expenditures for the ERA 2 November 2021 monthly report even though we identified ERA 2 expenditures recorded during the month in the system. It also incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures, project data, and participant demographics in all amounts reported as being all ERA 1 program information for the ERA 1 October 1, 2021 through December 31, 2021, compliance report. Finally, it incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures as being all ERA 1 program applicant expenditures within the cash disbursements and the federal share of expenditures line items rather than reporting this information for both programs separately as required, and understated cash receipts and the federal share of unliquidated obligations by $19.2 million and $4.1 million, respectively, for the ERA 1 October 1, 2021 through December 31, 2021, financial report. • The Division did not retain reports and associated documentation—The Division did not provide us the reports and related supporting documentation for the ERA 2 April 1, 2022 through June 30, 2022, compliance report and financial report even though the federal agency website indicated the reports were submitted. Therefore, we were unable to test them. Effect—The Division’s reporting inaccurate or unsupported program information and not retaining reports and associated documentation for audit purposes results in the federal agency being unable to rely on the reports to effectively 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. Cause—The Division reported that it contracted to use a new benefits system for the ERA program in March 2021 and relied on the system’s federal reporting dashboard screen for the summarized program information to compile its reports. Although the Division’s policy was to record applicant expenditures for months 1-15 to ERA 1 and months 16-18 to ERA 2, this was not the criteria established for the federal reporting dashboard until February 1, 2022, when the contractor corrected the system programming error, which resulted in the Division reporting ERA 2 information as ERA 1 information in all monthly and quarterly reports prior to February 1, 2022. When implementing the new system and after the contractor corrected the system programming error, the Division did not verify that the federal reporting dashboard reported complete program information and accurately summarized the underlying system data. Additionally, during the ERA reporting review and approval process, the Division did not verify the reported program information and the federal reporting dashboard to the underlying system data. Finally, the Division did not follow its policies and procedures to retain submitted reports or documentation to support the information it reported. Criteria—Federal law and guidance require the Division to separately report and certify accurate and complete program information for each ERA award to the federal agency. For the monthly reports, the Division is required to report monthly key information, such as the number of participating households that received ERA of any kind and the total ERA monies expended to or for participating households on behalf of eligible households, which is used by the federal agency for reallocation purposes. For the quarterly financial and compliance reports, the Division is required to report information, such as cash it disbursed, the federal share of expenditures, unliquidated obligations, and the cumulative amounts it obligated and expended so that the federal agency could monitor performance and compliance, including funding needs and the spending of any reallocated monies.2 In addition, the Division’s policies and procedures and federal regulation requires the Division 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). Further, 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—The Division should: 1. Develop and implement written policies and procedures to ensure the system used to process ERA claims and report program information produces summarized data on its federal reporting dashboard that are complete and accurate and comply with the federal agency’s reporting guidelines. 2. Follow its policies and procedures 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. Verify the ERA-reported program information and the federal reporting dashboard to the underlying system data during each report’s review and approval process. 4. Prepare and retain detailed documentation and submitted reports, such as system reports, queries, or screenshots, to support the program information it reports to the federal agency for each ERA award. The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The ERA Program 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. The initial ERA program is referred to as ERA 1. ERA 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 U.S. Department of the Treasury. (2022, December). Reporting Guidance—Emergency Rental Assistance Program, Version 3.4. Monthly, Quarterly, and Final Reporting. Retrieved 9/20/2023 from https://home.treasury.gov/system/files/136/ERA-Reporting-Guidance-v2.pdf
Assistance Listings number and name: 21.023 COVID-19 Emergency Rental Assistance Program Award numbers and years: ERA-2101070596, January 8, 2021, through September 30, 2022; ERA2-0165, May 10, 2021 through September 30, 2025 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal law and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) 1 and 2 programs, the Department of Economic Security—Division of Community Assistance and Development (Division) did not retain documentation to support and/or accurately report some information. Further, it did not retain some reports submitted to the federal agency or the associated documentation.1 Specifically, for 8 reports we selected for test work, we found the following: • The Division did not retain some documentation—The Division did not retain documentation, like system reports, queries, or screenshots, to support the information it reported on 3 monthly reports: the ERA 1 October 2021 and March 2022 compliance reports and the ERA 2 May 2022 compliance report. • The Division did not accurately report some information—The Division failed to report any expenditures for the ERA 2 November 2021 monthly report even though we identified ERA 2 expenditures recorded during the month in the system. It also incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures, project data, and participant demographics in all amounts reported as being all ERA 1 program information for the ERA 1 October 1, 2021 through December 31, 2021, compliance report. Finally, it incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures as being all ERA 1 program applicant expenditures within the cash disbursements and the federal share of expenditures line items rather than reporting this information for both programs separately as required, and understated cash receipts and the federal share of unliquidated obligations by $19.2 million and $4.1 million, respectively, for the ERA 1 October 1, 2021 through December 31, 2021, financial report. • The Division did not retain reports and associated documentation—The Division did not provide us the reports and related supporting documentation for the ERA 2 April 1, 2022 through June 30, 2022, compliance report and financial report even though the federal agency website indicated the reports were submitted. Therefore, we were unable to test them. Effect—The Division’s reporting inaccurate or unsupported program information and not retaining reports and associated documentation for audit purposes results in the federal agency being unable to rely on the reports to effectively 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. Cause—The Division reported that it contracted to use a new benefits system for the ERA program in March 2021 and relied on the system’s federal reporting dashboard screen for the summarized program information to compile its reports. Although the Division’s policy was to record applicant expenditures for months 1-15 to ERA 1 and months 16-18 to ERA 2, this was not the criteria established for the federal reporting dashboard until February 1, 2022, when the contractor corrected the system programming error, which resulted in the Division reporting ERA 2 information as ERA 1 information in all monthly and quarterly reports prior to February 1, 2022. When implementing the new system and after the contractor corrected the system programming error, the Division did not verify that the federal reporting dashboard reported complete program information and accurately summarized the underlying system data. Additionally, during the ERA reporting review and approval process, the Division did not verify the reported program information and the federal reporting dashboard to the underlying system data. Finally, the Division did not follow its policies and procedures to retain submitted reports or documentation to support the information it reported. Criteria—Federal law and guidance require the Division to separately report and certify accurate and complete program information for each ERA award to the federal agency. For the monthly reports, the Division is required to report monthly key information, such as the number of participating households that received ERA of any kind and the total ERA monies expended to or for participating households on behalf of eligible households, which is used by the federal agency for reallocation purposes. For the quarterly financial and compliance reports, the Division is required to report information, such as cash it disbursed, the federal share of expenditures, unliquidated obligations, and the cumulative amounts it obligated and expended so that the federal agency could monitor performance and compliance, including funding needs and the spending of any reallocated monies.2 In addition, the Division’s policies and procedures and federal regulation requires the Division 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). Further, 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—The Division should: 1. Develop and implement written policies and procedures to ensure the system used to process ERA claims and report program information produces summarized data on its federal reporting dashboard that are complete and accurate and comply with the federal agency’s reporting guidelines. 2. Follow its policies and procedures 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. Verify the ERA-reported program information and the federal reporting dashboard to the underlying system data during each report’s review and approval process. 4. Prepare and retain detailed documentation and submitted reports, such as system reports, queries, or screenshots, to support the program information it reports to the federal agency for each ERA award. The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The ERA Program 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. The initial ERA program is referred to as ERA 1. ERA 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 U.S. Department of the Treasury. (2022, December). Reporting Guidance—Emergency Rental Assistance Program, Version 3.4. Monthly, Quarterly, and Final Reporting. Retrieved 9/20/2023 from https://home.treasury.gov/system/files/136/ERA-Reporting-Guidance-v2.pdf
Assistance Listings number and name: 21.023 COVID-19 Emergency Rental Assistance Program Award numbers and years: ERA-2101070596, January 8, 2021, through September 30, 2022; ERA2-0165, May 10, 2021 through September 30, 2025 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal law and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) 1 and 2 programs, the Department of Economic Security—Division of Community Assistance and Development (Division) did not retain documentation to support and/or accurately report some information. Further, it did not retain some reports submitted to the federal agency or the associated documentation.1 Specifically, for 8 reports we selected for test work, we found the following: • The Division did not retain some documentation—The Division did not retain documentation, like system reports, queries, or screenshots, to support the information it reported on 3 monthly reports: the ERA 1 October 2021 and March 2022 compliance reports and the ERA 2 May 2022 compliance report. • The Division did not accurately report some information—The Division failed to report any expenditures for the ERA 2 November 2021 monthly report even though we identified ERA 2 expenditures recorded during the month in the system. It also incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures, project data, and participant demographics in all amounts reported as being all ERA 1 program information for the ERA 1 October 1, 2021 through December 31, 2021, compliance report. Finally, it incorrectly reported comingled ERA 1 and ERA 2 program applicant expenditures as being all ERA 1 program applicant expenditures within the cash disbursements and the federal share of expenditures line items rather than reporting this information for both programs separately as required, and understated cash receipts and the federal share of unliquidated obligations by $19.2 million and $4.1 million, respectively, for the ERA 1 October 1, 2021 through December 31, 2021, financial report. • The Division did not retain reports and associated documentation—The Division did not provide us the reports and related supporting documentation for the ERA 2 April 1, 2022 through June 30, 2022, compliance report and financial report even though the federal agency website indicated the reports were submitted. Therefore, we were unable to test them. Effect—The Division’s reporting inaccurate or unsupported program information and not retaining reports and associated documentation for audit purposes results in the federal agency being unable to rely on the reports to effectively 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. Cause—The Division reported that it contracted to use a new benefits system for the ERA program in March 2021 and relied on the system’s federal reporting dashboard screen for the summarized program information to compile its reports. Although the Division’s policy was to record applicant expenditures for months 1-15 to ERA 1 and months 16-18 to ERA 2, this was not the criteria established for the federal reporting dashboard until February 1, 2022, when the contractor corrected the system programming error, which resulted in the Division reporting ERA 2 information as ERA 1 information in all monthly and quarterly reports prior to February 1, 2022. When implementing the new system and after the contractor corrected the system programming error, the Division did not verify that the federal reporting dashboard reported complete program information and accurately summarized the underlying system data. Additionally, during the ERA reporting review and approval process, the Division did not verify the reported program information and the federal reporting dashboard to the underlying system data. Finally, the Division did not follow its policies and procedures to retain submitted reports or documentation to support the information it reported. Criteria—Federal law and guidance require the Division to separately report and certify accurate and complete program information for each ERA award to the federal agency. For the monthly reports, the Division is required to report monthly key information, such as the number of participating households that received ERA of any kind and the total ERA monies expended to or for participating households on behalf of eligible households, which is used by the federal agency for reallocation purposes. For the quarterly financial and compliance reports, the Division is required to report information, such as cash it disbursed, the federal share of expenditures, unliquidated obligations, and the cumulative amounts it obligated and expended so that the federal agency could monitor performance and compliance, including funding needs and the spending of any reallocated monies.2 In addition, the Division’s policies and procedures and federal regulation requires the Division 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). Further, 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—The Division should: 1. Develop and implement written policies and procedures to ensure the system used to process ERA claims and report program information produces summarized data on its federal reporting dashboard that are complete and accurate and comply with the federal agency’s reporting guidelines. 2. Follow its policies and procedures 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. Verify the ERA-reported program information and the federal reporting dashboard to the underlying system data during each report’s review and approval process. 4. Prepare and retain detailed documentation and submitted reports, such as system reports, queries, or screenshots, to support the program information it reports to the federal agency for each ERA award. The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The ERA Program 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. The initial ERA program is referred to as ERA 1. ERA 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 U.S. Department of the Treasury. (2022, December). Reporting Guidance—Emergency Rental Assistance Program, Version 3.4. Monthly, Quarterly, and Final Reporting. Retrieved 9/20/2023 from https://home.treasury.gov/system/files/136/ERA-Reporting-Guidance-v2.pdf
Assistance Listings number and name: 21.027 COVID-19 State and Local Fiscal Recovery Funds Award number and year: None Federal agency: U.S. Department of the Treasury Compliance requirement: Eligibility Questioned costs: $10,000 Condition—Contrary to federal regulations and its policies and procedures, the Department of Economic Security—Division of Employment and Rehabilitation Services (Division) made benefits payments totaling $10,000 to individuals for the State’s Return-to-Work Bonus Program for which it lacked documentation to support that it paid only those individuals who were eligible to receive them. We tested 67 individuals who received benefit payments and found that the Division made benefit payments to 5 individuals totaling $10,000 for which it lacked documentation to support the eligibility determinations.1 This calculates to a 7.5 percent exception rate for our 67 individual eligibility sample, totaling $133,000. Effect—The Division’s payment of $10,000 of program benefits for which it lacked documentation showing the 5 individuals were eligible beneficiaries increases the risk that the Division may not have been able to effectively prevent or detect fraud. Consequently, the Division may be required to return $10,000 to the federal agency.2 Cause—The Division’s management reported that it contracted with a third party to implement and use a new, temporary benefits system for the State’s Return-to-Work Bonus Program from July 1, 2021, through December 31, 2021.1 When the program and the Department’s contract with the third party ended, the Division did not ensure that the third-party contractor provided it with a complete set of program documentation that was derived from the system. Criteria—Federal regulations require the Division to retain all federal program records for a period of 3 years from the submission date of the final expenditure report to the federal agency (2 CFR §200.334). In addition, 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—This program ended on December 31, 2021, and the Division’s management reported to us that it received all the records related to the federal program from the third-party contractor when operations of the State’s Return-to-Work Bonus Program and related benefits system ceased.1 However, to the extent possible for this program and for all future federal programs the Division administers, the Division should: 1. Ensure subaward entities provide all records and the Division retains all records relating to a federal award for a period of 3 years from the date it submits the final expenditure report. 2. Work with the State of Arizona Office of the Governor and U.S. Department of the Treasury to resolve the $10,000 in questioned costs.2 The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 To be eligible for the State’s Return-to-Work Bonus Program benefits, individuals had to have filed, received, and been deemed eligible for Unemployment Insurance program benefits in Arizona between the period of May 8, 2021, and May 15, 2021. The benefit payments consisted of bonus payments of either $1,000 or $2,000, with a total maximum benefit amount of $2,000 per eligible individual. The State’s Return-to-Work Bonus Program was funded by the federal Coronavirus State and Local Fiscal Recovery Funds, an American Rescue Plan Act of 2021 program (Public Law 117-2), as administered by the Arizona Governor’s Office. The Department of Economic Security operated the program from July 1, 2021, through December 31, 2021, and the program ended on December 31, 2021. (State of Arizona, Office of the Governor and Department of Economic Security Interagency Service Agreement No. ISA-DES-ARPA-070121-02). 2 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the Office of the Governor, 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).
Assistance Listings number and name: 21.027 COVID-19 State and Local Fiscal Recovery Funds Award number and year: None Federal agency: U.S. Department of the Treasury Compliance requirement: Eligibility Questioned costs: $10,000 Condition—Contrary to federal regulations and its policies and procedures, the Department of Economic Security—Division of Employment and Rehabilitation Services (Division) made benefits payments totaling $10,000 to individuals for the State’s Return-to-Work Bonus Program for which it lacked documentation to support that it paid only those individuals who were eligible to receive them. We tested 67 individuals who received benefit payments and found that the Division made benefit payments to 5 individuals totaling $10,000 for which it lacked documentation to support the eligibility determinations.1 This calculates to a 7.5 percent exception rate for our 67 individual eligibility sample, totaling $133,000. Effect—The Division’s payment of $10,000 of program benefits for which it lacked documentation showing the 5 individuals were eligible beneficiaries increases the risk that the Division may not have been able to effectively prevent or detect fraud. Consequently, the Division may be required to return $10,000 to the federal agency.2 Cause—The Division’s management reported that it contracted with a third party to implement and use a new, temporary benefits system for the State’s Return-to-Work Bonus Program from July 1, 2021, through December 31, 2021.1 When the program and the Department’s contract with the third party ended, the Division did not ensure that the third-party contractor provided it with a complete set of program documentation that was derived from the system. Criteria—Federal regulations require the Division to retain all federal program records for a period of 3 years from the submission date of the final expenditure report to the federal agency (2 CFR §200.334). In addition, 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—This program ended on December 31, 2021, and the Division’s management reported to us that it received all the records related to the federal program from the third-party contractor when operations of the State’s Return-to-Work Bonus Program and related benefits system ceased.1 However, to the extent possible for this program and for all future federal programs the Division administers, the Division should: 1. Ensure subaward entities provide all records and the Division retains all records relating to a federal award for a period of 3 years from the date it submits the final expenditure report. 2. Work with the State of Arizona Office of the Governor and U.S. Department of the Treasury to resolve the $10,000 in questioned costs.2 The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 To be eligible for the State’s Return-to-Work Bonus Program benefits, individuals had to have filed, received, and been deemed eligible for Unemployment Insurance program benefits in Arizona between the period of May 8, 2021, and May 15, 2021. The benefit payments consisted of bonus payments of either $1,000 or $2,000, with a total maximum benefit amount of $2,000 per eligible individual. The State’s Return-to-Work Bonus Program was funded by the federal Coronavirus State and Local Fiscal Recovery Funds, an American Rescue Plan Act of 2021 program (Public Law 117-2), as administered by the Arizona Governor’s Office. The Department of Economic Security operated the program from July 1, 2021, through December 31, 2021, and the program ended on December 31, 2021. (State of Arizona, Office of the Governor and Department of Economic Security Interagency Service Agreement No. ISA-DES-ARPA-070121-02). 2 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the Office of the Governor, 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).
Assistance Listings number and name: 21.027 COVID-19 State and Local Fiscal Recovery Funds Award number and year: None Federal agency: U.S. Department of the Treasury Compliance requirement: Eligibility Questioned costs: $10,000 Condition—Contrary to federal regulations and its policies and procedures, the Department of Economic Security—Division of Employment and Rehabilitation Services (Division) made benefits payments totaling $10,000 to individuals for the State’s Return-to-Work Bonus Program for which it lacked documentation to support that it paid only those individuals who were eligible to receive them. We tested 67 individuals who received benefit payments and found that the Division made benefit payments to 5 individuals totaling $10,000 for which it lacked documentation to support the eligibility determinations.1 This calculates to a 7.5 percent exception rate for our 67 individual eligibility sample, totaling $133,000. Effect—The Division’s payment of $10,000 of program benefits for which it lacked documentation showing the 5 individuals were eligible beneficiaries increases the risk that the Division may not have been able to effectively prevent or detect fraud. Consequently, the Division may be required to return $10,000 to the federal agency.2 Cause—The Division’s management reported that it contracted with a third party to implement and use a new, temporary benefits system for the State’s Return-to-Work Bonus Program from July 1, 2021, through December 31, 2021.1 When the program and the Department’s contract with the third party ended, the Division did not ensure that the third-party contractor provided it with a complete set of program documentation that was derived from the system. Criteria—Federal regulations require the Division to retain all federal program records for a period of 3 years from the submission date of the final expenditure report to the federal agency (2 CFR §200.334). In addition, 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—This program ended on December 31, 2021, and the Division’s management reported to us that it received all the records related to the federal program from the third-party contractor when operations of the State’s Return-to-Work Bonus Program and related benefits system ceased.1 However, to the extent possible for this program and for all future federal programs the Division administers, the Division should: 1. Ensure subaward entities provide all records and the Division retains all records relating to a federal award for a period of 3 years from the date it submits the final expenditure report. 2. Work with the State of Arizona Office of the Governor and U.S. Department of the Treasury to resolve the $10,000 in questioned costs.2 The State’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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 To be eligible for the State’s Return-to-Work Bonus Program benefits, individuals had to have filed, received, and been deemed eligible for Unemployment Insurance program benefits in Arizona between the period of May 8, 2021, and May 15, 2021. The benefit payments consisted of bonus payments of either $1,000 or $2,000, with a total maximum benefit amount of $2,000 per eligible individual. The State’s Return-to-Work Bonus Program was funded by the federal Coronavirus State and Local Fiscal Recovery Funds, an American Rescue Plan Act of 2021 program (Public Law 117-2), as administered by the Arizona Governor’s Office. The Department of Economic Security operated the program from July 1, 2021, through December 31, 2021, and the program ended on December 31, 2021. (State of Arizona, Office of the Governor and Department of Economic Security Interagency Service Agreement No. ISA-DES-ARPA-070121-02). 2 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the Office of the Governor, 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).