2025-001: Academic Programs - Period of Performance (Material Weakness; Noncompliance) Assistance Listing Number/Title: #81.252, Academic Programs Federal Agency Name: U.S. Department of Energy Award Number: DE-LM0000497 Award Year: October 1, 2023 - March 31, 2025 Criteria: Per 2 CFR 200.343, the recipient must incur expenditures within the performance period of the grant award, as indicated in the Assistance Agreement(s). Per 2 CFR 200.344(c), the recipient must liquidate all obligations incurred under the award no later than 120 calendar days after the conclusion of the period of performance. Condition/context: This award closed on March 31, 2025, with a final liquidation date of July 29, 2025. Two expenditures for obligations totaling $69,608 were not incurred by March 31, 2025. Neither expenditure for those obligations was liquidated by July 29, 2025. Cause: Central Wyoming College (the College) originally anticipated this funding to last several more years (beyond March 31, 2025). As such, a long-term project that was funded by this award was ongoing at the end of the award period of performance. Due to external pressures surrounding award closeout, the College requested two pay applications from its contractor for work not yet performed. The College then held checks for each pay application until the related work was completed. Effect: Per 2 CFR 200.339, if a non-Federal entity fails to comply with Federal statutes, regulations, or the terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose additional conditions, as described in §200.208, Specific Conditions. If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances: a. Temporarily withhold payments until the recipient or subrecipient takes corrective action. b. Disallow costs for all or part of the cost of the activity associated with the noncompliance of the recipient or subrecipient. c. Suspend or terminate the Federal award in part or in its entirety. d. Initiate suspension or debarment proceedings as authorized in 2 CFR Part 180 and the Federal agency’s regulations or, for pass-through entities, recommend suspension or debarment proceedings be initiated by the Federal agency. e. Withhold further Federal funds (new awards or continuation funding) for the project or program. f. Pursue other legally available remedies. Questioned costs: $69,608 Identification as a repeat finding: No. Recommendation: We recommend that the College work closely with its granting agency to ensure that any unanticipated changes/reductions in funding periods are communicated in time to allow the College to effectively close out the grant, or to obtain permission for funding of expenditures that will not be incurred and/or liquidated timely. Views of responsible officials: Management concurs with the finding. See Exhibit I for corrective action plan.
CONDITION The Department of Human Services made payments under the Vocational Rehabilitation program outside of the 2021 and 2022 grant award periods of performance which was 10/1/20 - 9/30/21, and 10/1/21-9/30/22 with an allowable liquidation period, to pay for obligations, through 12/31/2022 and 12/31/2023, respectively. Payments made after the liquidation period totaled $1,495.35 for the 2021 grant. Payments obligated after the obligation period totaled $23,340 for the 2021 grant and $7,156 for the 2022 grant. CRITERIA The following criteria requires federal funds to be obligated by the end of the two-year period of performance window and those obligations must be liquidated within 90 days after the end date of period of performance. 2 CFR 200.343 requires: " Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. 34 CFR 361.64 requires: " (a) Except as provided in paragraph (b) of this section, any Federal funds, including reallotted funds, that are appropriated for a fiscal year to carry out a program under this part that are not obligated by the State by the beginning of the succeeding fiscal year and any program income received during a fiscal year that is not obligated by the State by the beginning of the succeeding fiscal year remain available for obligation by the State during that succeeding fiscal year. (b) Federal funds appropriated for a fiscal year remain available for obligation in the succeeding fiscal year only to the extent that the State met the matching requirement for those Federal funds by obligating, in accordance with 34 CFR 76.707, the non-Federal share in the fiscal year for which the funds were appropriated." The following criteria pertains to the establishment and maintenance of effective internal control to ensure payments are made within the correct period of performance. 45 CFR 75.303 states the non-Federal entity must, "establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." CAUSE The Department of Health and Human Services (DHHS), Vocational Rehabilitation Program, allowed payments to universities for tuition to be charged during the federal grant prior to the period when the service was provided. This issue was noted in three of five errors found in sampling and affected both the FFY 2021 and FFY 2022 grants. The remaining two errors were a result of expenditures being assigned improper coding which was not identified during the regular period of performance reviews performed by DHHS. The first occurred prior to the implementation of the period of performance reviews and the second was an expenditure to another state agency that was evaluated by the agency's review using the date of the check rather than the dates on the invoice. EFFECT Known unallowable costs totaling $30,496. were charged to the grants due to being obligated or liquidated after the period of performance. When projected to the population, an additional $50,372 in errors are likely. CONTEXT The Department of Health and Human Services had 395 payments totaling $514,546 after the period of performance for the FFY2021 and FY2022 federal grants. Of this amount, $26,367 were tuition fee payments determined to be the total population of known questioned costs related to tuition fees. $36,969 of the remaining population were sampled and $4,128 were errors. These errors projected to $54,401. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-021 was reported in the immediate prior year. Findings 2020-019, 2018-031, and 2016-053 were reported in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Health and Human Services improve procedures to review transactions for period of performance corrections to prevent and detect payments from being charged to the Vocational Rehabilitation program outside the period of performance. DEPARTMENT OF HEALTH AND HUMAN SERVICES RESPONSE The Department of Health and Human Services agrees with the recommendation. See “Management’s Response and Corrective Action” section of this report.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
Reference Number: 2024-013 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Federal Transit Cluster Assistance Listing Number: 20.500, 20.507, 20.526 Award Number and Year: VT-04-0021-01 (3/14/2013 – 6/30/2016) Compliance Requirement: Cash Management, Period of Performance Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR section 200.343(b) requires nonfederal entities to liquidate all obligations incurred under the federal award no later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award unless the federal awarding agency or pass-through entity authorizes an extension. Per the U.S. Department of Transportation, Federal Transit Administration (FTA), circular FTA C 5010.1E Chapter 3, the recipient is responsible to initiate closeout of the Award, within 90 days after the end of the period of performance, or after all approved activities are completed and/or the applicable federal assistance has been expended for all eligible costs. Any deviation from the approved Award must be documented in the closeout amendment. US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Per 31 CFR Part 205 Subpart B, a State must minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. A Federal Program Agency must limit a funds transfer to a State to the minimum amounts needed by the State and must time the disbursement to be in accord with the actual, immediate cash requirements of the State in carrying out a federal assistance program or project. The timing and amount of funds transfers must be as close as is administratively feasible to a State's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. States should exercise sound cash management in funds transfers to subgrantees in accordance with OMB Circular A-102. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Transportation (VTrans) drew down federal funds against an award for which the period of performance had expired. An award period extension was not authorized by FTA, nor had the award been closed out timely. Context: VTrans drew down $12,671 from a grant award for which the period of performance ended on June 30, 2016. An extension for the award was not authorized by FTA, nor did FTA authorize VTrans to reopen or modify the grant award. VTrans did not initiate closure of the award until after completion of the drawdown. Cause: The procedures used by VTrans were not sufficient to ensure that it closed out a grant award timely, nor were they sufficient to prevent the drawdown of funds against an expired grant award. Internal controls did not prevent or detect the errors. Effect: VTrans drew down funds against a grant award after the end of its period of performance. Questioned costs: $12,671, the amount of funds drawn down against the expired grant award. Recommendation: We recommend that VTrans review and enhance grant closeout procedures and internal controls to ensure that grants are closed out timely. We further recommend that VTrans review and enhance procedures and internal controls over cash management to ensure that cash draws are performed only against grants for which the period of performance has not expired. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-013 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Federal Transit Cluster Assistance Listing Number: 20.500, 20.507, 20.526 Award Number and Year: VT-04-0021-01 (3/14/2013 – 6/30/2016) Compliance Requirement: Cash Management, Period of Performance Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR section 200.343(b) requires nonfederal entities to liquidate all obligations incurred under the federal award no later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award unless the federal awarding agency or pass-through entity authorizes an extension. Per the U.S. Department of Transportation, Federal Transit Administration (FTA), circular FTA C 5010.1E Chapter 3, the recipient is responsible to initiate closeout of the Award, within 90 days after the end of the period of performance, or after all approved activities are completed and/or the applicable federal assistance has been expended for all eligible costs. Any deviation from the approved Award must be documented in the closeout amendment. US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Per 31 CFR Part 205 Subpart B, a State must minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. A Federal Program Agency must limit a funds transfer to a State to the minimum amounts needed by the State and must time the disbursement to be in accord with the actual, immediate cash requirements of the State in carrying out a federal assistance program or project. The timing and amount of funds transfers must be as close as is administratively feasible to a State's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. States should exercise sound cash management in funds transfers to subgrantees in accordance with OMB Circular A-102. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Transportation (VTrans) drew down federal funds against an award for which the period of performance had expired. An award period extension was not authorized by FTA, nor had the award been closed out timely. Context: VTrans drew down $12,671 from a grant award for which the period of performance ended on June 30, 2016. An extension for the award was not authorized by FTA, nor did FTA authorize VTrans to reopen or modify the grant award. VTrans did not initiate closure of the award until after completion of the drawdown. Cause: The procedures used by VTrans were not sufficient to ensure that it closed out a grant award timely, nor were they sufficient to prevent the drawdown of funds against an expired grant award. Internal controls did not prevent or detect the errors. Effect: VTrans drew down funds against a grant award after the end of its period of performance. Questioned costs: $12,671, the amount of funds drawn down against the expired grant award. Recommendation: We recommend that VTrans review and enhance grant closeout procedures and internal controls to ensure that grants are closed out timely. We further recommend that VTrans review and enhance procedures and internal controls over cash management to ensure that cash draws are performed only against grants for which the period of performance has not expired. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-013 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Federal Transit Cluster Assistance Listing Number: 20.500, 20.507, 20.526 Award Number and Year: VT-04-0021-01 (3/14/2013 – 6/30/2016) Compliance Requirement: Cash Management, Period of Performance Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR section 200.343(b) requires nonfederal entities to liquidate all obligations incurred under the federal award no later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award unless the federal awarding agency or pass-through entity authorizes an extension. Per the U.S. Department of Transportation, Federal Transit Administration (FTA), circular FTA C 5010.1E Chapter 3, the recipient is responsible to initiate closeout of the Award, within 90 days after the end of the period of performance, or after all approved activities are completed and/or the applicable federal assistance has been expended for all eligible costs. Any deviation from the approved Award must be documented in the closeout amendment. US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Per 31 CFR Part 205 Subpart B, a State must minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. A Federal Program Agency must limit a funds transfer to a State to the minimum amounts needed by the State and must time the disbursement to be in accord with the actual, immediate cash requirements of the State in carrying out a federal assistance program or project. The timing and amount of funds transfers must be as close as is administratively feasible to a State's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. States should exercise sound cash management in funds transfers to subgrantees in accordance with OMB Circular A-102. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Transportation (VTrans) drew down federal funds against an award for which the period of performance had expired. An award period extension was not authorized by FTA, nor had the award been closed out timely. Context: VTrans drew down $12,671 from a grant award for which the period of performance ended on June 30, 2016. An extension for the award was not authorized by FTA, nor did FTA authorize VTrans to reopen or modify the grant award. VTrans did not initiate closure of the award until after completion of the drawdown. Cause: The procedures used by VTrans were not sufficient to ensure that it closed out a grant award timely, nor were they sufficient to prevent the drawdown of funds against an expired grant award. Internal controls did not prevent or detect the errors. Effect: VTrans drew down funds against a grant award after the end of its period of performance. Questioned costs: $12,671, the amount of funds drawn down against the expired grant award. Recommendation: We recommend that VTrans review and enhance grant closeout procedures and internal controls to ensure that grants are closed out timely. We further recommend that VTrans review and enhance procedures and internal controls over cash management to ensure that cash draws are performed only against grants for which the period of performance has not expired. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-002 – Inadequate Documentation for Participant Stipends Federal Program Title: WIOA Cluster Federal Assistance Listing Number: 17.258 Federal Agency: Department of Labor (DOL) Pass-Through Entity: State of California Employment Development Department Federal Award Number and Year: AA211079 Fiscal Year 2023-2024 Category of Finding: Activities Allowed or Unallowed; Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance, Instance of Noncompliance Criteria Title 2 Code of Federal Regulations (2 CFR) §200.343(g) states that for costs to be allowable under federal awards, costs be adequately documented. 2 CFR §200.303 states that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our audit of compliance with activities allowed or unallowed and allowable costs/cost principles, we noted that the Organization was unable to provide adequate supporting documentation (attendance sheets and/or sign in sheets with signatures) for thirty-nine (39) direct non payroll costs. Cause The Organization has experienced significant turnover in key personnel in the Organization’s finance department and management in past years. Absent robust accounting policies and procedures, when vacancies occur, information can be lost and as individuals are getting up to speed, some processes may not be fully executed if they are manual and not fully embedded into an automated system. Effect Not providing sufficient documentation to auditors to demonstrate compliance with federal compliance results in an audit scope limitation. Failure to adequately document and maintain support for expenditures results in non-compliance with 2 CFR) §200.343(g) and there is a risk that federal funds may be used for unallowable activities and/or costs. Questioned Costs Questioned costs were not determinable. Context For thirty-nine (39) out of sixty (60) direct nonpayroll costs selected for testing, the Company did not provide adequate supporting documentation (attendance sheets and/or sign in sheets with signatures). The sample was not a statistically valid sample. Recommendation We recommend that the Organization develop and document processes and procedures for participant attendance tracking and participant stipends paid. Views of Responsible Officials and Planned Corrective Action Person responsible: Leona Smith Di Faustino, Interim Executive Director Corrective Action Plan: The organization will strengthen and document a formal process for documenting attendance. This process will include provide training to employees responsible for tracking attendance, implementing a signature sheet to be submitted and reviewed by program managers after each class, and incorporate review of attendance sheets into the payment processes for participant stipend payments ensuring only participants who correctly documented attendance are able to receive the stipend funds. Anticipated Implementation Date: July 1, 2025
CONDITION The Department of Human Services made payments under the Vocational Rehabilitation program outside of the 2021 and 2022 grant award periods of performance which was 10/1/20 - 9/30/21, and 10/1/21-9/30/22 with an allowable liquidation period, to pay for obligations, through 12/31/2022 and 12/31/2023, respectively. Payments made after the liquidation period totaled $1,495.35 for the 2021 grant. Payments obligated after the obligation period totaled $23,340 for the 2021 grant and $7,156 for the 2022 grant. CRITERIA The following criteria requires federal funds to be obligated by the end of the two-year period of performance window and those obligations must be liquidated within 90 days after the end date of period of performance. 2 CFR 200.343 requires: " Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. 34 CFR 361.64 requires: " (a) Except as provided in paragraph (b) of this section, any Federal funds, including reallotted funds, that are appropriated for a fiscal year to carry out a program under this part that are not obligated by the State by the beginning of the succeeding fiscal year and any program income received during a fiscal year that is not obligated by the State by the beginning of the succeeding fiscal year remain available for obligation by the State during that succeeding fiscal year. (b) Federal funds appropriated for a fiscal year remain available for obligation in the succeeding fiscal year only to the extent that the State met the matching requirement for those Federal funds by obligating, in accordance with 34 CFR 76.707, the non-Federal share in the fiscal year for which the funds were appropriated." The following criteria pertains to the establishment and maintenance of effective internal control to ensure payments are made within the correct period of performance. 45 CFR 75.303 states the non-Federal entity must, "establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." CAUSE The Department of Health and Human Services (DHHS), Vocational Rehabilitation Program, allowed payments to universities for tuition to be charged during the federal grant prior to the period when the service was provided. This issue was noted in three of five errors found in sampling and affected both the FFY 2021 and FFY 2022 grants. The remaining two errors were a result of expenditures being assigned improper coding which was not identified during the regular period of performance reviews performed by DHHS. The first occurred prior to the implementation of the period of performance reviews and the second was an expenditure to another state agency that was evaluated by the agency's review using the date of the check rather than the dates on the invoice. EFFECT Known unallowable costs totaling $30,496. were charged to the grants due to being obligated or liquidated after the period of performance. When projected to the population, an additional $50,372 in errors are likely. CONTEXT The Department of Health and Human Services had 395 payments totaling $514,546 after the period of performance for the FFY2021 and FY2022 federal grants. Of this amount, $26,367 were tuition fee payments determined to be the total population of known questioned costs related to tuition fees. $36,969 of the remaining population were sampled and $4,128 were errors. These errors projected to $54,401. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Finding 2022-021 was reported in the immediate prior year. Findings 2020-019, 2018-031, and 2016-053 were reported in previous years. The prior audit finding was reported as implemented on the summary schedule of prior audit findings. This materially misrepresents the status of the finding. RECOMMENDATION We recommend the Department of Health and Human Services improve procedures to review transactions for period of performance corrections to prevent and detect payments from being charged to the Vocational Rehabilitation program outside the period of performance. DEPARTMENT OF HEALTH AND HUMAN SERVICES RESPONSE The Department of Health and Human Services agrees with the recommendation. See “Management’s Response and Corrective Action” section of this report.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
2024-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR section 200.309 grant funds may only be obligated upon the date of approval by the awarding agency through the end of the grant period. Per 2 CFR section 200.343(b) grant obligations must be liquidated not later than 120 calendar days after the end of the grant period. Condition: Costs were liquidated after 120 calendar days after the end of the grant period. Cause: The School was not aware of the 120 calendar day liquidation period. Effect: The Town expended funds outside of the period of performance which resulted in questioned costs. Questioned Costs: $36,118.21 Repeat Finding from Prior Year: No Recommendation: The School should implement procedures to properly monitor award performance dates to ensure that goods and services charged to federal grants are liquidated within 120 calendar days after the end of the grant period. Views of Responsible Official: Management agrees with the finding.
Reference Number: 2024-013 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Federal Transit Cluster Assistance Listing Number: 20.500, 20.507, 20.526 Award Number and Year: VT-04-0021-01 (3/14/2013 – 6/30/2016) Compliance Requirement: Cash Management, Period of Performance Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR section 200.343(b) requires nonfederal entities to liquidate all obligations incurred under the federal award no later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award unless the federal awarding agency or pass-through entity authorizes an extension. Per the U.S. Department of Transportation, Federal Transit Administration (FTA), circular FTA C 5010.1E Chapter 3, the recipient is responsible to initiate closeout of the Award, within 90 days after the end of the period of performance, or after all approved activities are completed and/or the applicable federal assistance has been expended for all eligible costs. Any deviation from the approved Award must be documented in the closeout amendment. US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Per 31 CFR Part 205 Subpart B, a State must minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. A Federal Program Agency must limit a funds transfer to a State to the minimum amounts needed by the State and must time the disbursement to be in accord with the actual, immediate cash requirements of the State in carrying out a federal assistance program or project. The timing and amount of funds transfers must be as close as is administratively feasible to a State's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. States should exercise sound cash management in funds transfers to subgrantees in accordance with OMB Circular A-102. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Transportation (VTrans) drew down federal funds against an award for which the period of performance had expired. An award period extension was not authorized by FTA, nor had the award been closed out timely. Context: VTrans drew down $12,671 from a grant award for which the period of performance ended on June 30, 2016. An extension for the award was not authorized by FTA, nor did FTA authorize VTrans to reopen or modify the grant award. VTrans did not initiate closure of the award until after completion of the drawdown. Cause: The procedures used by VTrans were not sufficient to ensure that it closed out a grant award timely, nor were they sufficient to prevent the drawdown of funds against an expired grant award. Internal controls did not prevent or detect the errors. Effect: VTrans drew down funds against a grant award after the end of its period of performance. Questioned costs: $12,671, the amount of funds drawn down against the expired grant award. Recommendation: We recommend that VTrans review and enhance grant closeout procedures and internal controls to ensure that grants are closed out timely. We further recommend that VTrans review and enhance procedures and internal controls over cash management to ensure that cash draws are performed only against grants for which the period of performance has not expired. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-013 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Federal Transit Cluster Assistance Listing Number: 20.500, 20.507, 20.526 Award Number and Year: VT-04-0021-01 (3/14/2013 – 6/30/2016) Compliance Requirement: Cash Management, Period of Performance Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR section 200.343(b) requires nonfederal entities to liquidate all obligations incurred under the federal award no later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award unless the federal awarding agency or pass-through entity authorizes an extension. Per the U.S. Department of Transportation, Federal Transit Administration (FTA), circular FTA C 5010.1E Chapter 3, the recipient is responsible to initiate closeout of the Award, within 90 days after the end of the period of performance, or after all approved activities are completed and/or the applicable federal assistance has been expended for all eligible costs. Any deviation from the approved Award must be documented in the closeout amendment. US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Per 31 CFR Part 205 Subpart B, a State must minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. A Federal Program Agency must limit a funds transfer to a State to the minimum amounts needed by the State and must time the disbursement to be in accord with the actual, immediate cash requirements of the State in carrying out a federal assistance program or project. The timing and amount of funds transfers must be as close as is administratively feasible to a State's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. States should exercise sound cash management in funds transfers to subgrantees in accordance with OMB Circular A-102. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Transportation (VTrans) drew down federal funds against an award for which the period of performance had expired. An award period extension was not authorized by FTA, nor had the award been closed out timely. Context: VTrans drew down $12,671 from a grant award for which the period of performance ended on June 30, 2016. An extension for the award was not authorized by FTA, nor did FTA authorize VTrans to reopen or modify the grant award. VTrans did not initiate closure of the award until after completion of the drawdown. Cause: The procedures used by VTrans were not sufficient to ensure that it closed out a grant award timely, nor were they sufficient to prevent the drawdown of funds against an expired grant award. Internal controls did not prevent or detect the errors. Effect: VTrans drew down funds against a grant award after the end of its period of performance. Questioned costs: $12,671, the amount of funds drawn down against the expired grant award. Recommendation: We recommend that VTrans review and enhance grant closeout procedures and internal controls to ensure that grants are closed out timely. We further recommend that VTrans review and enhance procedures and internal controls over cash management to ensure that cash draws are performed only against grants for which the period of performance has not expired. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-013 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Federal Transit Cluster Assistance Listing Number: 20.500, 20.507, 20.526 Award Number and Year: VT-04-0021-01 (3/14/2013 – 6/30/2016) Compliance Requirement: Cash Management, Period of Performance Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR section 200.343(b) requires nonfederal entities to liquidate all obligations incurred under the federal award no later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award unless the federal awarding agency or pass-through entity authorizes an extension. Per the U.S. Department of Transportation, Federal Transit Administration (FTA), circular FTA C 5010.1E Chapter 3, the recipient is responsible to initiate closeout of the Award, within 90 days after the end of the period of performance, or after all approved activities are completed and/or the applicable federal assistance has been expended for all eligible costs. Any deviation from the approved Award must be documented in the closeout amendment. US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Per 31 CFR Part 205 Subpart B, a State must minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. A Federal Program Agency must limit a funds transfer to a State to the minimum amounts needed by the State and must time the disbursement to be in accord with the actual, immediate cash requirements of the State in carrying out a federal assistance program or project. The timing and amount of funds transfers must be as close as is administratively feasible to a State's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. States should exercise sound cash management in funds transfers to subgrantees in accordance with OMB Circular A-102. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency of Transportation (VTrans) drew down federal funds against an award for which the period of performance had expired. An award period extension was not authorized by FTA, nor had the award been closed out timely. Context: VTrans drew down $12,671 from a grant award for which the period of performance ended on June 30, 2016. An extension for the award was not authorized by FTA, nor did FTA authorize VTrans to reopen or modify the grant award. VTrans did not initiate closure of the award until after completion of the drawdown. Cause: The procedures used by VTrans were not sufficient to ensure that it closed out a grant award timely, nor were they sufficient to prevent the drawdown of funds against an expired grant award. Internal controls did not prevent or detect the errors. Effect: VTrans drew down funds against a grant award after the end of its period of performance. Questioned costs: $12,671, the amount of funds drawn down against the expired grant award. Recommendation: We recommend that VTrans review and enhance grant closeout procedures and internal controls to ensure that grants are closed out timely. We further recommend that VTrans review and enhance procedures and internal controls over cash management to ensure that cash draws are performed only against grants for which the period of performance has not expired. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-002 – Inadequate Documentation for Participant Stipends Federal Program Title: WIOA Cluster Federal Assistance Listing Number: 17.258 Federal Agency: Department of Labor (DOL) Pass-Through Entity: State of California Employment Development Department Federal Award Number and Year: AA211079 Fiscal Year 2023-2024 Category of Finding: Activities Allowed or Unallowed; Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance, Instance of Noncompliance Criteria Title 2 Code of Federal Regulations (2 CFR) §200.343(g) states that for costs to be allowable under federal awards, costs be adequately documented. 2 CFR §200.303 states that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our audit of compliance with activities allowed or unallowed and allowable costs/cost principles, we noted that the Organization was unable to provide adequate supporting documentation (attendance sheets and/or sign in sheets with signatures) for thirty-nine (39) direct non payroll costs. Cause The Organization has experienced significant turnover in key personnel in the Organization’s finance department and management in past years. Absent robust accounting policies and procedures, when vacancies occur, information can be lost and as individuals are getting up to speed, some processes may not be fully executed if they are manual and not fully embedded into an automated system. Effect Not providing sufficient documentation to auditors to demonstrate compliance with federal compliance results in an audit scope limitation. Failure to adequately document and maintain support for expenditures results in non-compliance with 2 CFR) §200.343(g) and there is a risk that federal funds may be used for unallowable activities and/or costs. Questioned Costs Questioned costs were not determinable. Context For thirty-nine (39) out of sixty (60) direct nonpayroll costs selected for testing, the Company did not provide adequate supporting documentation (attendance sheets and/or sign in sheets with signatures). The sample was not a statistically valid sample. Recommendation We recommend that the Organization develop and document processes and procedures for participant attendance tracking and participant stipends paid. Views of Responsible Officials and Planned Corrective Action Person responsible: Leona Smith Di Faustino, Interim Executive Director Corrective Action Plan: The organization will strengthen and document a formal process for documenting attendance. This process will include provide training to employees responsible for tracking attendance, implementing a signature sheet to be submitted and reviewed by program managers after each class, and incorporate review of attendance sheets into the payment processes for participant stipend payments ensuring only participants who correctly documented attendance are able to receive the stipend funds. Anticipated Implementation Date: July 1, 2025
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Criteria: According to 2 CFR § 200.77 and § 200.343 of the Uniform Guidance, federal awards must be obligated and expended only during the authorized period of performance as stated in the award documents. Expenditures incurred outside of this time frame are considered unallowable and subject to repayment. Condition: During a performance review conducted by the U.S. Department of Housing and Urban Development (HUD), the Institution was found to have expended $247,000 in federal funds outside the period of performance established for the Emergency Shelter Grant Program under the CARES Act. These expenditures were not in accordance with federal requirements and were deemed unallowable by HUD. Effect: The Institution incurred unallowable costs totaling $247,000. As a result, HUD has required that the Institution return these funds. Noncompliance with period-of-performance requirements can also increase the risk of future disallowances and may impact eligibility for future federal funding. Cause: The noncompliance resulted from the lack of effective internal controls to monitor the period of performance, limited communication between departments, and insufficient knowledge of federal grant requirements within the accounting department. There was a lack of formal review of the funding agreement terms before processing reimbursements or direct charges, which led to the oversight. Recommendations: We recommend that the Institution implement the following corrective actions: 1. Implement a Period Monitoring System: Establish a formal process for tracking the period of performance for each grant, with automatic alerts or calendar reminders for start and end dates. 2. Grant Agreement Review Procedures: Require a formal review of grant agreements and performance periods prior to incurring or approving expenses to ensure compliance. 3. Training for Finance and Program Staff: Provide training on Uniform Guidance cost principles and federal compliance requirements to staff involved in program administration and finance. 4. Periodic Reconciliation: Conduct periodic reconciliations of expenses charged to federal grants to ensure they are within the allowed timeframe and scope. 5. Communicate with Auditors: Work closely with the external auditors to ensure that any potential delays in the audit process are identified early and mitigated to meet the submission deadline. Questioned cost: $247,000 Sampling was statistically valid: Yes
2022-001 {ALN 45.129 Promotion of the Humanities Federal/State Partnership} Condition: During our review of the Schedule of Expenditures of Federal Awards (SEFA) and related financial statements, we noted that a significant portion of total subawards issued during the fiscal year were funded by federal programs. However, the corresponding Federal Financial Report (FFR) did not reflect any unliquidated obligations, despite the presence of a substantial subawards payable balance in the audited financial statements. Criteria: In accordance with 2 CFR §200.343 and Uniform Guidance requirements, recipients of federal funds must accurately report unliquidated obligations on the FFR to ensure complete and transparent financial reporting. Cause: The discrepancy resulted from a change in the organization’s bookkeeping practices and reporting methodology. Specifically, the organization transitioned from a cash basis to an accrual basis for preparing the FFR, which was not fully aligned with the timing and recognition of subaward obligations. Effect: This discrepancy may result in inaccurate reporting to federal agencies, which could lead to misunderstandings about the organization’s financial position and compliance with federal requirements. Recommendation: We recommend that the organization establish and implement procedures to ensure that subawards payable are properly reviewed and reconciled with the FFR prior to submission in line with the accrual method for reporting the FFR. This should include identifying and reporting any unliquidated obligations related to federal subawards. Views of Responsible Officials: The organization concurs with the finding and has since resubmitted the Federal Financial Report (FFR) to the federal agency to accurately reflect unliquidated obligations. Procedures are being developed to ensure future FFRs are reconciled with subawards payable balances prior to submission.
2022-001 {ALN 45.129 Promotion of the Humanities Federal/State Partnership} Condition: During our review of the Schedule of Expenditures of Federal Awards (SEFA) and related financial statements, we noted that a significant portion of total subawards issued during the fiscal year were funded by federal programs. However, the corresponding Federal Financial Report (FFR) did not reflect any unliquidated obligations, despite the presence of a substantial subawards payable balance in the audited financial statements. Criteria: In accordance with 2 CFR §200.343 and Uniform Guidance requirements, recipients of federal funds must accurately report unliquidated obligations on the FFR to ensure complete and transparent financial reporting. Cause: The discrepancy resulted from a change in the organization’s bookkeeping practices and reporting methodology. Specifically, the organization transitioned from a cash basis to an accrual basis for preparing the FFR, which was not fully aligned with the timing and recognition of subaward obligations. Effect: This discrepancy may result in inaccurate reporting to federal agencies, which could lead to misunderstandings about the organization’s financial position and compliance with federal requirements. Recommendation: We recommend that the organization establish and implement procedures to ensure that subawards payable are properly reviewed and reconciled with the FFR prior to submission in line with the accrual method for reporting the FFR. This should include identifying and reporting any unliquidated obligations related to federal subawards. Views of Responsible Officials: The organization concurs with the finding and has since resubmitted the Federal Financial Report (FFR) to the federal agency to accurately reflect unliquidated obligations. Procedures are being developed to ensure future FFRs are reconciled with subawards payable balances prior to submission.
2022-001 {ALN 45.129 Promotion of the Humanities Federal/State Partnership} Condition: During our review of the Schedule of Expenditures of Federal Awards (SEFA) and related financial statements, we noted that a significant portion of total subawards issued during the fiscal year were funded by federal programs. However, the corresponding Federal Financial Report (FFR) did not reflect any unliquidated obligations, despite the presence of a substantial subawards payable balance in the audited financial statements. Criteria: In accordance with 2 CFR §200.343 and Uniform Guidance requirements, recipients of federal funds must accurately report unliquidated obligations on the FFR to ensure complete and transparent financial reporting. Cause: The discrepancy resulted from a change in the organization’s bookkeeping practices and reporting methodology. Specifically, the organization transitioned from a cash basis to an accrual basis for preparing the FFR, which was not fully aligned with the timing and recognition of subaward obligations. Effect: This discrepancy may result in inaccurate reporting to federal agencies, which could lead to misunderstandings about the organization’s financial position and compliance with federal requirements. Recommendation: We recommend that the organization establish and implement procedures to ensure that subawards payable are properly reviewed and reconciled with the FFR prior to submission in line with the accrual method for reporting the FFR. This should include identifying and reporting any unliquidated obligations related to federal subawards. Views of Responsible Officials: The organization concurs with the finding and has since resubmitted the Federal Financial Report (FFR) to the federal agency to accurately reflect unliquidated obligations. Procedures are being developed to ensure future FFRs are reconciled with subawards payable balances prior to submission.
2022-001 {ALN 45.129 Promotion of the Humanities Federal/State Partnership} Condition: During our review of the Schedule of Expenditures of Federal Awards (SEFA) and related financial statements, we noted that a significant portion of total subawards issued during the fiscal year were funded by federal programs. However, the corresponding Federal Financial Report (FFR) did not reflect any unliquidated obligations, despite the presence of a substantial subawards payable balance in the audited financial statements. Criteria: In accordance with 2 CFR §200.343 and Uniform Guidance requirements, recipients of federal funds must accurately report unliquidated obligations on the FFR to ensure complete and transparent financial reporting. Cause: The discrepancy resulted from a change in the organization’s bookkeeping practices and reporting methodology. Specifically, the organization transitioned from a cash basis to an accrual basis for preparing the FFR, which was not fully aligned with the timing and recognition of subaward obligations. Effect: This discrepancy may result in inaccurate reporting to federal agencies, which could lead to misunderstandings about the organization’s financial position and compliance with federal requirements. Recommendation: We recommend that the organization establish and implement procedures to ensure that subawards payable are properly reviewed and reconciled with the FFR prior to submission in line with the accrual method for reporting the FFR. This should include identifying and reporting any unliquidated obligations related to federal subawards. Views of Responsible Officials: The organization concurs with the finding and has since resubmitted the Federal Financial Report (FFR) to the federal agency to accurately reflect unliquidated obligations. Procedures are being developed to ensure future FFRs are reconciled with subawards payable balances prior to submission.
FINDING 2022-005 Subject: Special Education Cluster ? Period of Performance Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants AL Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Period of Performance Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . .? 2 CFR 200.309 states: ?A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.? 2 CFR 200.343(b) states: ?Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the equipment requirements of the Period of Performance compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured that adequate records and documentation would be available to support compliance with the grant agreement and the period of performance requirements. Effect: The failure to establish an effective internal control system and failure to maintain and provide records and documentation of expenditures by grant award, program, and years prevented the determination of the School Corporation's compliance with the Period of Performance compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Period of Performance compliance requirement. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance with the period of performance requirements for approximately 48% of the expenditures. The School Corporation did not have adequate procedures in place to ensure that the Cooperative complied with the period of performance requirements. The Cooperative did not have adequate procedures in place to ensure that costs were charged to the programs only during the period of performance, or that all obligations were liquidated within 90 days of the end of the period of performance. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004. Recommendation: It was recommended that the School Corporation?s management establish internal controls to ensure that records and documentation will be maintained and made available for audit related to the Period of Performance compliance requirements. As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
FINDING 2022-005 Subject: Special Education Cluster ? Period of Performance Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants AL Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Period of Performance Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . .? 2 CFR 200.309 states: ?A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.? 2 CFR 200.343(b) states: ?Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the equipment requirements of the Period of Performance compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured that adequate records and documentation would be available to support compliance with the grant agreement and the period of performance requirements. Effect: The failure to establish an effective internal control system and failure to maintain and provide records and documentation of expenditures by grant award, program, and years prevented the determination of the School Corporation's compliance with the Period of Performance compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Period of Performance compliance requirement. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance with the period of performance requirements for approximately 48% of the expenditures. The School Corporation did not have adequate procedures in place to ensure that the Cooperative complied with the period of performance requirements. The Cooperative did not have adequate procedures in place to ensure that costs were charged to the programs only during the period of performance, or that all obligations were liquidated within 90 days of the end of the period of performance. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004. Recommendation: It was recommended that the School Corporation?s management establish internal controls to ensure that records and documentation will be maintained and made available for audit related to the Period of Performance compliance requirements. As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
FINDING 2022-005 Subject: Special Education Cluster ? Period of Performance Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants AL Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Period of Performance Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . .? 2 CFR 200.309 states: ?A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.? 2 CFR 200.343(b) states: ?Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the equipment requirements of the Period of Performance compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured that adequate records and documentation would be available to support compliance with the grant agreement and the period of performance requirements. Effect: The failure to establish an effective internal control system and failure to maintain and provide records and documentation of expenditures by grant award, program, and years prevented the determination of the School Corporation's compliance with the Period of Performance compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Period of Performance compliance requirement. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance with the period of performance requirements for approximately 48% of the expenditures. The School Corporation did not have adequate procedures in place to ensure that the Cooperative complied with the period of performance requirements. The Cooperative did not have adequate procedures in place to ensure that costs were charged to the programs only during the period of performance, or that all obligations were liquidated within 90 days of the end of the period of performance. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004. Recommendation: It was recommended that the School Corporation?s management establish internal controls to ensure that records and documentation will be maintained and made available for audit related to the Period of Performance compliance requirements. As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
FINDING 2022-005 Subject: Special Education Cluster ? Period of Performance Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants AL Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Period of Performance Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . .? 2 CFR 200.309 states: ?A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.? 2 CFR 200.343(b) states: ?Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the equipment requirements of the Period of Performance compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured that adequate records and documentation would be available to support compliance with the grant agreement and the period of performance requirements. Effect: The failure to establish an effective internal control system and failure to maintain and provide records and documentation of expenditures by grant award, program, and years prevented the determination of the School Corporation's compliance with the Period of Performance compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Period of Performance compliance requirement. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance with the period of performance requirements for approximately 48% of the expenditures. The School Corporation did not have adequate procedures in place to ensure that the Cooperative complied with the period of performance requirements. The Cooperative did not have adequate procedures in place to ensure that costs were charged to the programs only during the period of performance, or that all obligations were liquidated within 90 days of the end of the period of performance. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004. Recommendation: It was recommended that the School Corporation?s management establish internal controls to ensure that records and documentation will be maintained and made available for audit related to the Period of Performance compliance requirements. As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
FINDING 2022-005 Subject: Special Education Cluster ? Period of Performance Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants AL Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Period of Performance Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . .? 2 CFR 200.309 states: ?A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.? 2 CFR 200.343(b) states: ?Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the equipment requirements of the Period of Performance compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured that adequate records and documentation would be available to support compliance with the grant agreement and the period of performance requirements. Effect: The failure to establish an effective internal control system and failure to maintain and provide records and documentation of expenditures by grant award, program, and years prevented the determination of the School Corporation's compliance with the Period of Performance compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Period of Performance compliance requirement. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance with the period of performance requirements for approximately 48% of the expenditures. The School Corporation did not have adequate procedures in place to ensure that the Cooperative complied with the period of performance requirements. The Cooperative did not have adequate procedures in place to ensure that costs were charged to the programs only during the period of performance, or that all obligations were liquidated within 90 days of the end of the period of performance. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004. Recommendation: It was recommended that the School Corporation?s management establish internal controls to ensure that records and documentation will be maintained and made available for audit related to the Period of Performance compliance requirements. As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
FINDING 2022-005 Subject: Special Education Cluster ? Period of Performance Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants AL Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Period of Performance Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . .? 2 CFR 200.309 states: ?A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.? 2 CFR 200.343(b) states: ?Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the equipment requirements of the Period of Performance compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured that adequate records and documentation would be available to support compliance with the grant agreement and the period of performance requirements. Effect: The failure to establish an effective internal control system and failure to maintain and provide records and documentation of expenditures by grant award, program, and years prevented the determination of the School Corporation's compliance with the Period of Performance compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Period of Performance compliance requirement. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance with the period of performance requirements for approximately 48% of the expenditures. The School Corporation did not have adequate procedures in place to ensure that the Cooperative complied with the period of performance requirements. The Cooperative did not have adequate procedures in place to ensure that costs were charged to the programs only during the period of performance, or that all obligations were liquidated within 90 days of the end of the period of performance. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004. Recommendation: It was recommended that the School Corporation?s management establish internal controls to ensure that records and documentation will be maintained and made available for audit related to the Period of Performance compliance requirements. As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
FINDING 2022-005 Subject: Special Education Cluster ? Period of Performance Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants AL Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Period of Performance Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . .? 2 CFR 200.309 states: ?A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.? 2 CFR 200.343(b) states: ?Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the equipment requirements of the Period of Performance compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured that adequate records and documentation would be available to support compliance with the grant agreement and the period of performance requirements. Effect: The failure to establish an effective internal control system and failure to maintain and provide records and documentation of expenditures by grant award, program, and years prevented the determination of the School Corporation's compliance with the Period of Performance compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Period of Performance compliance requirement. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance with the period of performance requirements for approximately 48% of the expenditures. The School Corporation did not have adequate procedures in place to ensure that the Cooperative complied with the period of performance requirements. The Cooperative did not have adequate procedures in place to ensure that costs were charged to the programs only during the period of performance, or that all obligations were liquidated within 90 days of the end of the period of performance. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004. Recommendation: It was recommended that the School Corporation?s management establish internal controls to ensure that records and documentation will be maintained and made available for audit related to the Period of Performance compliance requirements. As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
Criteria - Fiscal closeout of a CFP grant includes the submission of a cost certificate; a final Performance & Evaluation Report (P&E Report); HUD approval of the cost certificate; and an audit, if applicable. In order to initiate the closeout process, the Authority shall submit the Field Office the Actual Modernization Cost Certificate (AMCC) (Form HUD-53001) and the P&E Report (Form HUD-50075.1). Per 2 CFR 200.343, these reports are to be submitted within 90 days after the funds are expended. Condition - The Authority did not submit the AMCC and P&E Report within 90 days after the funds were expended for Public Housing Capital Fund Grants NY06P001501-17 and NY06P001501-18. The funds were fully expended on February 12, 2021 and August 25, 2021, respectively. Cause - The Authority?s grant reporting procedures were not sufficient to ensure compliance with requirements. Effect - The Authority did not submit timely. Questioned Costs - None identified. Recommendation - We recommend the Authority complete and submit the AMCC in a more timely manner immediately following the final request from the electronic line of credit control system (eLOCCS) and familiarize themselves with the "Capital Fund Guidebook" for reporting requirements to ensure accurate and timely grant reporting in compliance with grant agreements. Management?s Response - (a) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendation, please see below for action taken. (b) Action taken - Closeout of CFP grants and all related reports will be handled by the Comptroller and CFO on a going forward basis in a timely manner subsequent to the grant being fully expended. The Authority will also familiarize ourselves with the Capital Fund Guidebook to ensure reporting requirements are being met. (c) Planned implementation date of correct action - Completed by June 30, 2023
2022-060 Higher Education Coordinating Commission Strengthen controls to ensure expenditures are not obligated beyond the period of performance Federal Awarding Agency: U.S. Department of Labor Assistance Listing Number and Name: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Workers Formula Grant Federal Award Numbers and Years: AA32218F30, 2018; AA32218G10, 2018; AA32218G30, 2018; AA32218G70, 2018; AA32218H90, 2018; AA32218F31, 2018 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: $47,523 (known) Criteria: 20 CFR 683.110; 2 CFR 200.343 (2018) WIOA grants are available for expenditure by the State during the grant program year and the two succeeding program years. In addition, the State must liquidate all financial obligations incurred no later than 90 calendar days after the end date of the period of performance. We judgmentally selected for review expenditures recorded in fiscal year 2022 related to 2018 grant award whose period of performance ended June 30, 2021. Our review of the supporting documentation found there were 3 out of 13 items with expenditures that were outside the period of performance. Total question cost for these expenditures were $47,523. Per management, these errors were due to a change in personnel and trying to balance out the 2018 grant after the fact. We recommend department management review and revise controls to ensure expenditures are only obligated during the period of performance federally mandated dates.
2022-060 Higher Education Coordinating Commission Strengthen controls to ensure expenditures are not obligated beyond the period of performance Federal Awarding Agency: U.S. Department of Labor Assistance Listing Number and Name: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Workers Formula Grant Federal Award Numbers and Years: AA32218F30, 2018; AA32218G10, 2018; AA32218G30, 2018; AA32218G70, 2018; AA32218H90, 2018; AA32218F31, 2018 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: $47,523 (known) Criteria: 20 CFR 683.110; 2 CFR 200.343 (2018) WIOA grants are available for expenditure by the State during the grant program year and the two succeeding program years. In addition, the State must liquidate all financial obligations incurred no later than 90 calendar days after the end date of the period of performance. We judgmentally selected for review expenditures recorded in fiscal year 2022 related to 2018 grant award whose period of performance ended June 30, 2021. Our review of the supporting documentation found there were 3 out of 13 items with expenditures that were outside the period of performance. Total question cost for these expenditures were $47,523. Per management, these errors were due to a change in personnel and trying to balance out the 2018 grant after the fact. We recommend department management review and revise controls to ensure expenditures are only obligated during the period of performance federally mandated dates.
2022-060 Higher Education Coordinating Commission Strengthen controls to ensure expenditures are not obligated beyond the period of performance Federal Awarding Agency: U.S. Department of Labor Assistance Listing Number and Name: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Workers Formula Grant Federal Award Numbers and Years: AA32218F30, 2018; AA32218G10, 2018; AA32218G30, 2018; AA32218G70, 2018; AA32218H90, 2018; AA32218F31, 2018 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: $47,523 (known) Criteria: 20 CFR 683.110; 2 CFR 200.343 (2018) WIOA grants are available for expenditure by the State during the grant program year and the two succeeding program years. In addition, the State must liquidate all financial obligations incurred no later than 90 calendar days after the end date of the period of performance. We judgmentally selected for review expenditures recorded in fiscal year 2022 related to 2018 grant award whose period of performance ended June 30, 2021. Our review of the supporting documentation found there were 3 out of 13 items with expenditures that were outside the period of performance. Total question cost for these expenditures were $47,523. Per management, these errors were due to a change in personnel and trying to balance out the 2018 grant after the fact. We recommend department management review and revise controls to ensure expenditures are only obligated during the period of performance federally mandated dates.
2022-060 Higher Education Coordinating Commission Strengthen controls to ensure expenditures are not obligated beyond the period of performance Federal Awarding Agency: U.S. Department of Labor Assistance Listing Number and Name: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Workers Formula Grant Federal Award Numbers and Years: AA32218F30, 2018; AA32218G10, 2018; AA32218G30, 2018; AA32218G70, 2018; AA32218H90, 2018; AA32218F31, 2018 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: $47,523 (known) Criteria: 20 CFR 683.110; 2 CFR 200.343 (2018) WIOA grants are available for expenditure by the State during the grant program year and the two succeeding program years. In addition, the State must liquidate all financial obligations incurred no later than 90 calendar days after the end date of the period of performance. We judgmentally selected for review expenditures recorded in fiscal year 2022 related to 2018 grant award whose period of performance ended June 30, 2021. Our review of the supporting documentation found there were 3 out of 13 items with expenditures that were outside the period of performance. Total question cost for these expenditures were $47,523. Per management, these errors were due to a change in personnel and trying to balance out the 2018 grant after the fact. We recommend department management review and revise controls to ensure expenditures are only obligated during the period of performance federally mandated dates.
2022-060 Higher Education Coordinating Commission Strengthen controls to ensure expenditures are not obligated beyond the period of performance Federal Awarding Agency: U.S. Department of Labor Assistance Listing Number and Name: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Workers Formula Grant Federal Award Numbers and Years: AA32218F30, 2018; AA32218G10, 2018; AA32218G30, 2018; AA32218G70, 2018; AA32218H90, 2018; AA32218F31, 2018 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: $47,523 (known) Criteria: 20 CFR 683.110; 2 CFR 200.343 (2018) WIOA grants are available for expenditure by the State during the grant program year and the two succeeding program years. In addition, the State must liquidate all financial obligations incurred no later than 90 calendar days after the end date of the period of performance. We judgmentally selected for review expenditures recorded in fiscal year 2022 related to 2018 grant award whose period of performance ended June 30, 2021. Our review of the supporting documentation found there were 3 out of 13 items with expenditures that were outside the period of performance. Total question cost for these expenditures were $47,523. Per management, these errors were due to a change in personnel and trying to balance out the 2018 grant after the fact. We recommend department management review and revise controls to ensure expenditures are only obligated during the period of performance federally mandated dates.
FINDING 2022-005 Subject: Special Education Cluster ? Period of Performance Federal Agency: Department of Education Federal Programs: Special Education_Grants to States, Special Education_Preschool Grants AL Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Period of Performance Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . .? 2 CFR 200.309 states: ?A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.? 2 CFR 200.343(b) states: ?Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.? Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the equipment requirements of the Period of Performance compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured that adequate records and documentation would be available to support compliance with the grant agreement and the period of performance requirements. Effect: The failure to establish an effective internal control system and failure to maintain and provide records and documentation of expenditures by grant award, program, and years prevented the determination of the School Corporation's compliance with the Period of Performance compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Period of Performance compliance requirement. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance with the period of performance requirements for approximately 48% of the expenditures. The School Corporation did not have adequate procedures in place to ensure that the Cooperative complied with the period of performance requirements. The Cooperative did not have adequate procedures in place to ensure that costs were charged to the programs only during the period of performance, or that all obligations were liquidated within 90 days of the end of the period of performance. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004. Recommendation: It was recommended that the School Corporation?s management establish internal controls to ensure that records and documentation will be maintained and made available for audit related to the Period of Performance compliance requirements. As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.