Criteria or specific requirement: According to § 200.302 Financial management of 2 CFR Part 200, the financial management system of each nonfederal entity must provide for written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the federal award. According to § 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.403 Factors affecting allowability of costs of 2 CFR Part 200, except where otherwise authorized by statute, costs must be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the nonfederal entity in order to be allowable under federal awards. According to § 200.430 Compensation—personal services of 2 CFR Part 200, costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, when applicable. According to § 200.431 Compensation-fringe benefits of 2 CFR Part 200, except as provided elsewhere in these principles, the costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, nonfederal entity-employee agreement, or an established policy of the nonfederal entity. Condition: The County does not have written procedures for determining the allowability of costs nor an established written policy for compensation-personal services and fringe benefits. Questioned costs: None Context: During our testing, we noted the County charged various types of salaries and benefits to the grants. The County does not have written procedures for determining the allowability of costs. Specific to compensation-personal services and fringe benefits, there is not an established written policy for us to test that personnel costs charged to grants conform to, follows an appointment in accordance with, and are required by an established policy of the County. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in potential unallowable costs charged to grants. Repeat Finding: This audit finding was reported in the prior year in finding 2022-002. Recommendation: We recommend the County establish written procedures for determining the allowability of costs to include a written policy regarding the charging of personnel costs to grants. Views of responsible officials: There is no disagreement from responsible officials.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Opioid Response Grants Assistance Listing Number: 93.788 Federal Award Identification Number: H79TI083278 Pass-Through Entity: Illinois Department of Human Services Pass-Through Number: 43CBC03525 Award Periods: July 1, 2022 – June 30, 2023 Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance 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 sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs incurred outside of the period of performance were charged to the grant. Questioned Costs: $26,230 Context: Six of eighteen transactions selected for testing. Cause: Unknown. Effect: The Organization may allocate unallowable costs to the grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278) Criteria: Per 2 CFR 200.403 (g), “Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal awards:” and “(g) Be adequately documented.” Policy Issuances for the WIOA programs state that all reporting of expenditures of the funds provided through these grants must be reported to Workforce Development on a quarterly basis. Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Context: Management of the Consortium did not retain supporting documentation used to complete the reports at the time they were prepared. Cause: Management oversight. Effect: Unable to determine that required reports were based on accurate, supporting documentation. Recommendation: The Consortium should adopt policies and procedures that require that they maintain adequate documentation for quarterly and final close out reports. Views of Responsible Officials: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports.
2023-002 – Allowable Cost/Cost Principles – Internal Control Over Compliance –Noncompliance Information on Federal Program: U.S. Department of Health and Human Services ALN Number: 93.243 ALN Name: Substance Abuse and Mental Health Service Projects of Regional and National Significance Grant Award Number: 1H79TI083607-01 Contract Period: 07/01/2022 - 6/30/2023 Criteria: The 2 CFR Part 200 establishes cost principles for determining costs applicable to federal awards. The OMB Compliance Supplement, Part 3 – Compliance Requirements, Allowable Cost/Cost Principles notes that “Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.” Further, the Uniform Guidance Section §200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented, and there must be sufficient documentation. Condition: During our testing of personnel costs, we noted that one employee was improperly classified as an hourly employee instead of a salary-based employee which led to the employee being paid $200 more per paycheck for four pay periods. Cause: The overpayment was due to human error caused by the Human Resource clerk. The employee sampled was a salaried employee, however, in the timekeeping system the employee was classified as an hourly employee in error. This led to payroll not being able to review and make adjustments to this employee’s hours (related to any leave taken during the pay period) when payroll ran the timekeeping system report for salary employees and led to the employee being overpaid. Effect or Potential Effect: This resulted to the questioned costs noted above. Questioned Costs: Known questioned costs of $800 in relation to our sample. Unable to determine unknown questioned costs. Context: We tested a sample of 40 items and found one employee exception as noted in the condition. The sampled employee occurred twice in sampled items that were tested during the audit and based on information reviewed, the total overpayment to this employee amounted to $800. This is a condition identified per review of the Organization’s compliance with specified requirements using a statistically valid sample. Recommendation: In order to facilitate accurate reporting and compliance with terms and conditions of federal awards, we recommend management to enhance controls related to payroll processing to ensure that payroll is accurate prior processing and payment to employees. This also assists in ensuring that only allowable costs are charged to the program. Views of Responsible Official and Planned Corrective Action: The Company agrees with the finding identified. The Company’s response to the finding is described in the accompanying management’s corrective action plan.
2023-003 – Allowable Cost/Cost Principles – Internal Control Over Compliance –Noncompliance Information on Federal Program: U.S. Department of Health and Human Services ALN Number: 93.243 ALN Name: Substance Abuse and Mental Health Service Projects of Regional and National Significance Grant Award Number: 1H79TI084507-01 Contract Period: 07/01/2022 - 6/30/2023 Criteria: The 2 CFR Part 200 establishes cost principles for determining costs applicable to federal awards. The OMB Compliance Supplement, Part 3 – Compliance Requirements, Allowable Cost/Cost Principles notes that “Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.” Further, the Uniform Guidance Section §200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented, and there must be sufficient documentation. Condition: During our testing of personnel costs, we noted that one employee received a full bi-weekly pay even after termination. This resulted to an overpayment to the employee amounting to $6,923 which was charged to the program. Cause: The overpayment was due to an oversight and payroll missing to update the employee’s status to terminated in the payroll system. Effect or Potential Effect: This resulted to the questioned costs noted above. Questioned Costs: Known questioned costs of $6,923 in relation to our sample. Unable to determine unknown questioned costs. Context: We tested a sample of 40 items and found one exception amounting to $6,923 as noted in the condition. This is a condition identified per review of the Organization’s compliance with specified requirements using a statistically valid sample. Recommendation: In order to facilitate accurate reporting and compliance with terms and conditions of federal awards, we recommend management to enhance controls related to payroll processing to ensure that payroll is accurate prior to processing and payment to employees. Management should also consider automating the process, where possible, to avoid human errors in the process. This also assists in ensuring that only allowable costs are charged to the program. Views of Responsible Official and Planned Corrective Action: The Company agrees with the finding identified. The Company’s response to the finding is described in the accompanying management’s corrective action plan.
Criteria or specific requirement (including statutory, regulatory, or other citation) - Per 2 CFR Subpart E- Cost Principles Part 200.403 (g) states that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards "(g) Be adequately documented." Per Part 200.413 (a) Direct costs are those costs that can be identified specifically with a particular final cost objective. Condition - The Special Education District prepared, and the cognizant agency approved, a grant budget that included $637,216 of salaries for learning loss, summer enrichment and after school programs (run by member districts). The Special Education District claimed grant expenditures for payments to member districts as salaries. Questioned Costs - Unknown. Context - The Special Education District budgeted and claimed salaries on grant expenditure reports however these expenditures were not salaries incurred directly by the Special Education District, but rather payments to member districts. The grant agreement stipulated that "no subcontracts or sub-grants are allowed without prior written approval of the State Superintendent of Education. If subcontracts or sub-grants are allowed, then all project responsibilities are to be retained by the grantee to ensure compliance with the terms and conditions of the grant. All subcontracts and sub-grants must be documented and must have the prior written approval of the State Superintendent of Education. Approval of subcontracts and sub-grants shall be subject to the same criteria as are applied to the original proposal/application. " Effect - Grant expenditures claimed as salaries on the expenditure reports were payments to member districts which no invoice, representations, or documented by the member districts to the Special Education District as to how the funds were used. Cause - The Special Education District disbursed funds, without documentation, to member districts. Recommendation - We recommend that in the future the Special Education District prepare grant budgets that align with the expected grant expenditures and that expenditures be adequately documented as to the use of funds. Management's response - Management does not agree with this finding. Management reached out to the cognizant agency which provided the following response - "The ESSER III Cooperative grant was state set-aside funds that were originally awarded to ISBE. ISBE determined that to meet the stipulations of Learning Loss-Summer Enrichment-After School Program reservations, the most efficient way to reach the maximum number of students would be through the cooperatives providing for their member districts. Henry-Stark County Special Education District met those requirements and fulfilled their financial obligations by providing evidence-based activities through their member districts"
Criteria or specific requirement (including statutory, regulatory, or other citation) - Per 2 CFR Subpart E- Cost Principles Part 200.403 (g) states that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards "(g) Be adequately documented." Per Part 200.413 (a) Direct costs are those costs that can be identified specifically with a particular final cost objective. Condition - The Special Education District prepared, and the cognizant agency approved, a grant budget that included $637,216 of salaries for learning loss, summer enrichment and after school programs (run by member districts). The Special Education District claimed grant expenditures for payments to member districts as salaries. Questioned Costs - Unknown. Context - The Special Education District budgeted and claimed salaries on grant expenditure reports however these expenditures were not salaries incurred directly by the Special Education District, but rather payments to member districts. The grant agreement stipulated that "no subcontracts or sub-grants are allowed without prior written approval of the State Superintendent of Education. If subcontracts or sub-grants are allowed, then all project responsibilities are to be retained by the grantee to ensure compliance with the terms and conditions of the grant. All subcontracts and sub-grants must be documented and must have the prior written approval of the State Superintendent of Education. Approval of subcontracts and sub-grants shall be subject to the same criteria as are applied to the original proposal/application. " Effect - Grant expenditures claimed as salaries on the expenditure reports were payments to member districts which no invoice, representations, or documented by the member districts to the Special Education District as to how the funds were used. Cause - The Special Education District disbursed funds, without documentation, to member districts. Recommendation - We recommend that in the future the Special Education District prepare grant budgets that align with the expected grant expenditures and that expenditures be adequately documented as to the use of funds. Management's response - Management does not agree with this finding. Management reached out to the cognizant agency which provided the following response - "The ESSER III Cooperative grant was state set-aside funds that were originally awarded to ISBE. ISBE determined that to meet the stipulations of Learning Loss-Summer Enrichment-After School Program reservations, the most efficient way to reach the maximum number of students would be through the cooperatives providing for their member districts. Henry-Stark County Special Education District met those requirements and fulfilled their financial obligations by providing evidence-based activities through their member districts"
2023-003 – Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also §§ 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Condition: During our audit, we noted that three (3) out of forty (40) samples summed up to $39,055.50 had no proper source documents to support the transactions charged to the grant brought by lost official receipts, hence, identified as not adequately documented. Alternatively, the City created a memo to document the loss of receipts signed by the department head. Cause: The City was not able to safeguard the documents substantiating the transactions being charged to the grant. Effect or Potential Effect: The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred. Questioned Costs: Known questionable cost $39,056 and the estimated questionable cost is projected to be $69,269. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant. Views of Responsible Officials: Management concurs the finding.
Crime Victim Assistance U.S. Department of Justice Passed through California Office of Emergency Services Federal Catalog Number 16.575 Federal Award Identification Number XC 22 05 1248 (January 1, 2023 - December 31, 2023) Federal Award Identification Number RC 22 31 1248 (October 1, 2022 - September 30, 2023) Federal Award Identification Number XL 21 04 1248 (January 1, 2022 - December 31, 2022) Federal Award Identification Number SP 22 05 1248 (May 1, 2023 - April 30, 2024) Federal Award Identification Number XH 21 04 1248 (January 1, 2022 - December 31, 2022) Criteria Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and numerous federal guidelines require the establishment and maintenance of internal control designed to reasonable ensure accurate financial reporting and compliance with laws, regulations and program requirements. The Organization is required to be in compliance with the criteria contained in 2 CFR Part 200. 430(i)(1 )(viii). Which require documentation of personnel expenses based on: "Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes provided that: A. The system for establishing the estimates produces reasonable approximations of the activity actually performed; B. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and C. The non-Federal entity's system of internal controls includes processes to review after-the- fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated." Condition The budgeted allocation of salaried employees' wages among multiple projects were not reviewed and adjusted after-the-fact as required by 2 CFR Section 200.403(i)(1 )(viii). Questioned Costs The known questioned costs were $1,427 of personnel costs charges to federal program. Proper Perspective Twenty-eight payroll cash disbursements were tested totaling $25,645. The total sample population was $1,221,287. Therefore, likely questioned costs are $36,471. Our sample was a statistically valid sample. The issue is systematic to the organization's salaried employee payroll process. Effect The Organization is out of compliance with Uniform Guidance requirements for Allowable Costs/Cost Principle. Cause The Organization's internal control process over charging salaried personnel cost based on the labor distribution report, does not include an after-the-fact review and adjustment based on actual time worked. Recommendation We recommend that the Organization have support for the distribution of the employees' wages among each project. If budget or estimates are used for allocations among projects, we recommend an after- the-fact review is done and the necessary adjustments are made to the final amount charged for that period to ensure the amount charges to the project is accurate, allowable and properly allocated following the requirements of 2 CFR Section 200.430(i)(1 )(viii).
2023-004 - Activities Allowed or Unallowed; Allowable Costs/Cost Principles Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Number: 93.667 Assistance Listing Name: Social Services Block Grant Pass-through Awards under the Uniform Guidance Requirements: Criteria – CFR 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition – During our testing of allowable costs, we noted exceptions in the ability of management to support payroll incurred for the United Way of Greater Cleveland’s Title XX federal program. The Organization billed for personnel time on a monthly basis (1/12 of the total award) up to the maximum available for personnel costs, versus billing for the actual costs incurred under the award. The United Way of Greater Cleveland did not adequately document hours worked per employee per submission, and accordingly, time and effort were not properly supported on a monthly basis. Rather, United Way of Greater Cleveland allocated the time and effort of employees at the end of the fiscal year to ensure that costs incurred were not less than total reimbursements, and no programs were overbilled for the annual costs under the program. In performing the allocation in this manner, United Way inadvertently overallocated time charges to the Title XX program, however, total costs incurred by United Way after exclusion of the overallocation were not in excess of the amounts funded by the program. Cause – United Way does not have specific policies and procedures in place as to how monthly personnel costs across federal programs will be aggregated and charged to federal programs. Effect – An ineffective control system related to the charging of cost to federal programs in order to ensure that only hours worked relating to the programs is charged and requested for reimbursement and can be supported with timecards can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs – None. Context – United Way of Greater Cleveland collects timecards for all employees for submission and approval prior to biweekly payroll. However, a policy or procedure does not exist to ensure that the actual hours incurred (time and effort) billed to the federal agencies on a monthly basis is fully supported at the time of invoicing. Rather, invoicing is done on a pro-rata basis for the entire amount of the personnel cost under the contract, and then an annual comparison to contract was done across programs to provide greater assurance that no costs had been billed and reported in excess of the amounts incurred. Repeat Finding – This is a repeat finding.Recommendation - We recommend that United Way of Greater Cleveland develop a policy and procedure to ensure that prior to submission of invoices to federal awarding agencies, management prepare a monthly analysis to support the actual amounts allocated across all programs and invoiced to the awarding agencies, reconciled to payroll reports, which then will allow to evidence that all hours submitted for reimbursement are supported with timecards or appropriate allocation, thus demonstrating the level of effort under the uniform guidance. We further recommend that management review its policies and procedures on a regular and ongoing basis related to the allocation methodology to ensure that its appropriate given changes in the program and workforce. Views of Responsible Officials and Planned Corrective Actions – Management concurs with the finding and the recommendation.
2023-004 - Activities Allowed or Unallowed; Allowable Costs/Cost Principles Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Number: 93.667 Assistance Listing Name: Social Services Block Grant Pass-through Awards under the Uniform Guidance Requirements: Criteria – CFR 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition – During our testing of allowable costs, we noted exceptions in the ability of management to support payroll incurred for the United Way of Greater Cleveland’s Title XX federal program. The Organization billed for personnel time on a monthly basis (1/12 of the total award) up to the maximum available for personnel costs, versus billing for the actual costs incurred under the award. The United Way of Greater Cleveland did not adequately document hours worked per employee per submission, and accordingly, time and effort were not properly supported on a monthly basis. Rather, United Way of Greater Cleveland allocated the time and effort of employees at the end of the fiscal year to ensure that costs incurred were not less than total reimbursements, and no programs were overbilled for the annual costs under the program. In performing the allocation in this manner, United Way inadvertently overallocated time charges to the Title XX program, however, total costs incurred by United Way after exclusion of the overallocation were not in excess of the amounts funded by the program. Cause – United Way does not have specific policies and procedures in place as to how monthly personnel costs across federal programs will be aggregated and charged to federal programs. Effect – An ineffective control system related to the charging of cost to federal programs in order to ensure that only hours worked relating to the programs is charged and requested for reimbursement and can be supported with timecards can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs – None. Context – United Way of Greater Cleveland collects timecards for all employees for submission and approval prior to biweekly payroll. However, a policy or procedure does not exist to ensure that the actual hours incurred (time and effort) billed to the federal agencies on a monthly basis is fully supported at the time of invoicing. Rather, invoicing is done on a pro-rata basis for the entire amount of the personnel cost under the contract, and then an annual comparison to contract was done across programs to provide greater assurance that no costs had been billed and reported in excess of the amounts incurred. Repeat Finding – This is a repeat finding.Recommendation - We recommend that United Way of Greater Cleveland develop a policy and procedure to ensure that prior to submission of invoices to federal awarding agencies, management prepare a monthly analysis to support the actual amounts allocated across all programs and invoiced to the awarding agencies, reconciled to payroll reports, which then will allow to evidence that all hours submitted for reimbursement are supported with timecards or appropriate allocation, thus demonstrating the level of effort under the uniform guidance. We further recommend that management review its policies and procedures on a regular and ongoing basis related to the allocation methodology to ensure that its appropriate given changes in the program and workforce. Views of Responsible Officials and Planned Corrective Actions – Management concurs with the finding and the recommendation.
2023-005 - Activities Allowed or Unallowed; Allowable Costs/Cost Principles Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Number: 93.391 Assistance Listing Name: Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Pass-through Awards under the Uniform Guidance Requirements: Criteria – CFR 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition – During our testing of allowable costs, we noted exceptions in the ability of management to support payroll incurred for the United Way of Greater Cleveland’s OHIZ federal program. The bi-weekly payroll amounts presented as costs incurred did not agree to the personnel files provided to support such costs. Cause – United Way does not have specific policies and procedures in place as to how monthly personnel costs across federal programs will be aggregated and charged to federal programs, including the matching of the costs to documentation within personnel files of the employees charged to the program. Effect – An ineffective control system related to the charging of cost to federal programs in order to ensure that proper rates based on information maintained in personnel files are used in the determination of costs incurred can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs – $3,945. Context – The Organization did not consistently comply with the documented procedures to ensure that all employee rates used in the calculation of costs incurred for the OHIZ program were agreed to/based upon the personnel records for certain employees. We sampled 10 items for the OHIZ program and found 5 exceptions resulting in $3,945 of questioned costs. Repeat Finding – This is a repeat finding. Recommendation – We recommend that the Organization develop a policy and procedures to ensure that all personnel costs used to calculate costs incurred under federal programs are reconciled back to personnel records to accurately reflect the actual costs incurred. Views of Responsible Officials and Planned Corrective Actions – The United Way of Greater Cleveland concurs with the finding and the recommendation. Our corrective action plan is described in Management’s Corrective Action plan included at page 63 of this reporting package.
2023-006 – Reporting Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Number: 93.667 Assistance Listing Name: Social Services Block Grant Pass-through Awards under the Uniform Guidance Requirements: Criteria – CFR 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition – During our testing of reporting, we test selected two reports for testing and noted two exceptions in the ability of management to support payroll reported to for the Title XX federal program, in that the Organization billed for personnel time on a monthly basis (1/12 of the total award) up to the maximum available for personnel costs, versus billing for the actual costs incurred under the award. The United Way of Greater Cleveland did not adequately document hours worked per employee per submission, and accordingly, time and effort were not properly supported on a monthly basis. Cause – United Way does not have specific policies and procedures in place as to how monthly personnel costs across federal programs will be aggregated and charged and reported to federal programs. Effect – An ineffective control system related to the charging of cost to federal programs in order to ensure that only hours worked relating to the programs is charged and requested for reimbursement and can be supported with timecards can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs – None. Context – United Way of Greater Cleveland collects timecards for all employees for submission and approval prior to biweekly payroll. However, a policy or procedure does not exist to ensure that the actual hours incurred (time and effort) billed to the federal agencies on a monthly basis is fully supported at the time of invoicing. Rather, invoicing is done on a pro-rata basis for the entire amount of the personnel cost under the contract, and then an annual comparison to contract was done across programs to provide greater assurance that no costs had been billed and reported in excess of the amounts incurred. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that United Way of Greater Cleveland develop a policy and procedure to ensure that prior to submission of invoices to federal awarding agencies, management prepare a monthly analysis to support the actual amounts allocated across all programs and invoiced to the awarding agencies, reconciled to payroll reports, which then will allow to evidence that all hours submitted for reimbursement are supported with timecards or appropriate allocation to support costs reported to the program.
2023-006 – Reporting Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Number: 93.667 Assistance Listing Name: Social Services Block Grant Pass-through Awards under the Uniform Guidance Requirements: Criteria – CFR 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition – During our testing of reporting, we test selected two reports for testing and noted two exceptions in the ability of management to support payroll reported to for the Title XX federal program, in that the Organization billed for personnel time on a monthly basis (1/12 of the total award) up to the maximum available for personnel costs, versus billing for the actual costs incurred under the award. The United Way of Greater Cleveland did not adequately document hours worked per employee per submission, and accordingly, time and effort were not properly supported on a monthly basis. Cause – United Way does not have specific policies and procedures in place as to how monthly personnel costs across federal programs will be aggregated and charged and reported to federal programs. Effect – An ineffective control system related to the charging of cost to federal programs in order to ensure that only hours worked relating to the programs is charged and requested for reimbursement and can be supported with timecards can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs – None. Context – United Way of Greater Cleveland collects timecards for all employees for submission and approval prior to biweekly payroll. However, a policy or procedure does not exist to ensure that the actual hours incurred (time and effort) billed to the federal agencies on a monthly basis is fully supported at the time of invoicing. Rather, invoicing is done on a pro-rata basis for the entire amount of the personnel cost under the contract, and then an annual comparison to contract was done across programs to provide greater assurance that no costs had been billed and reported in excess of the amounts incurred. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that United Way of Greater Cleveland develop a policy and procedure to ensure that prior to submission of invoices to federal awarding agencies, management prepare a monthly analysis to support the actual amounts allocated across all programs and invoiced to the awarding agencies, reconciled to payroll reports, which then will allow to evidence that all hours submitted for reimbursement are supported with timecards or appropriate allocation to support costs reported to the program.
FINDING 2023-005 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls which would include segregation of duties that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure expenditures charged to the food service program fund (School Lunch fund) are for the benefit of the food service program. The School Corporation's payroll disbursements were prepared by the Payroll Clerk without a documented review or approval process to prevent, or detect and correct, errors. In addition, vendor claims were to be reviewed and approved by the Treasurer and the School Board. Of the 40 vendor claims selected for testing to ensure the internal control was in place and operating effectively, 3 claims did not have documentation of approval by the Treasurer or the School Board. In addition, the total amount of trash removal services for the School Corporation was paid from the School Lunch fund. The total amount charged to the School Lunch fund was $15,448. This amount was considered questioned costs. The lack of internal controls over payroll and vendor claims was a systemic issue throughout the audit period. The noncompliance was isolated to the payments for trash removal services. INDIANA STATE BOARD OF ACCOUNTS 22 RANDOLPH EASTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs for trash removal were incorrectly charged to the food service program. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $15,448 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented.
FINDING 2023-005 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls which would include segregation of duties that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure expenditures charged to the food service program fund (School Lunch fund) are for the benefit of the food service program. The School Corporation's payroll disbursements were prepared by the Payroll Clerk without a documented review or approval process to prevent, or detect and correct, errors. In addition, vendor claims were to be reviewed and approved by the Treasurer and the School Board. Of the 40 vendor claims selected for testing to ensure the internal control was in place and operating effectively, 3 claims did not have documentation of approval by the Treasurer or the School Board. In addition, the total amount of trash removal services for the School Corporation was paid from the School Lunch fund. The total amount charged to the School Lunch fund was $15,448. This amount was considered questioned costs. The lack of internal controls over payroll and vendor claims was a systemic issue throughout the audit period. The noncompliance was isolated to the payments for trash removal services. INDIANA STATE BOARD OF ACCOUNTS 22 RANDOLPH EASTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs for trash removal were incorrectly charged to the food service program. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $15,448 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented.
FINDING 2023-005 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls which would include segregation of duties that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure expenditures charged to the food service program fund (School Lunch fund) are for the benefit of the food service program. The School Corporation's payroll disbursements were prepared by the Payroll Clerk without a documented review or approval process to prevent, or detect and correct, errors. In addition, vendor claims were to be reviewed and approved by the Treasurer and the School Board. Of the 40 vendor claims selected for testing to ensure the internal control was in place and operating effectively, 3 claims did not have documentation of approval by the Treasurer or the School Board. In addition, the total amount of trash removal services for the School Corporation was paid from the School Lunch fund. The total amount charged to the School Lunch fund was $15,448. This amount was considered questioned costs. The lack of internal controls over payroll and vendor claims was a systemic issue throughout the audit period. The noncompliance was isolated to the payments for trash removal services. INDIANA STATE BOARD OF ACCOUNTS 22 RANDOLPH EASTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs for trash removal were incorrectly charged to the food service program. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $15,448 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented.
FINDING 2023-005 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls which would include segregation of duties that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure expenditures charged to the food service program fund (School Lunch fund) are for the benefit of the food service program. The School Corporation's payroll disbursements were prepared by the Payroll Clerk without a documented review or approval process to prevent, or detect and correct, errors. In addition, vendor claims were to be reviewed and approved by the Treasurer and the School Board. Of the 40 vendor claims selected for testing to ensure the internal control was in place and operating effectively, 3 claims did not have documentation of approval by the Treasurer or the School Board. In addition, the total amount of trash removal services for the School Corporation was paid from the School Lunch fund. The total amount charged to the School Lunch fund was $15,448. This amount was considered questioned costs. The lack of internal controls over payroll and vendor claims was a systemic issue throughout the audit period. The noncompliance was isolated to the payments for trash removal services. INDIANA STATE BOARD OF ACCOUNTS 22 RANDOLPH EASTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs for trash removal were incorrectly charged to the food service program. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $15,448 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented.
FINDING 2023-005 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls which would include segregation of duties that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure expenditures charged to the food service program fund (School Lunch fund) are for the benefit of the food service program. The School Corporation's payroll disbursements were prepared by the Payroll Clerk without a documented review or approval process to prevent, or detect and correct, errors. In addition, vendor claims were to be reviewed and approved by the Treasurer and the School Board. Of the 40 vendor claims selected for testing to ensure the internal control was in place and operating effectively, 3 claims did not have documentation of approval by the Treasurer or the School Board. In addition, the total amount of trash removal services for the School Corporation was paid from the School Lunch fund. The total amount charged to the School Lunch fund was $15,448. This amount was considered questioned costs. The lack of internal controls over payroll and vendor claims was a systemic issue throughout the audit period. The noncompliance was isolated to the payments for trash removal services. INDIANA STATE BOARD OF ACCOUNTS 22 RANDOLPH EASTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs for trash removal were incorrectly charged to the food service program. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $15,448 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented.