Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “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. (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 testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “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. (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 testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Finding 2022-003 ? Unallowable Use of Public Housing Program Funds (Noncompliance/Other Matter) Public Housing Program ? Assistance Listing No. 14.850a, Grant Period: Year-End December 31, 2022 Criteria The cost principles in 2 CFR Part 200, Sub-part E of the Uniform Guidance describe allowable and unallowable uses of federal award program subsidies. Parts 200.403 and 200.405 prohibit the use of federal award program subsidies to fund expenditures outside of the applicable federal award program. Specifically, the Public Housing Programs subsidies and reserves cannot be used to fund expenditures and/or deficits of other federal or non-federal programs, except through allowable Management, Book-keeping and Service Fees. Condition and Perspective During 2022, the Authority?s Public Housing Program loaned the Central Office Cost Center (COCC) $668,552. This amount was payable back to the Public Housing Program as of December 31, 2022.Questioned Costs ? None noted Cause Lack of non-federal funds available to finance non-federal expenditures. Effect Non-compliance with federal Allowable Cost requirements. Recommendation We recommend that the Authority limit funding the COCC from the Public Housing Program, to allowable Fees only as specified in the Uniform Guidance and applicable HUD literature. Management?s Response The Authority will limit funding the COCC from the Public Housing Program, to allowable Fees only. The Authority?s Executive Director, Trey George, has assumed the responsibility of executing this corrective action as of November 1, 2023.
FINDING 2022-002 Subject: Child Support Enforcement - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Health and Human Services Federal Program: Child Support Enforcement Assistance Listings Number: 93.563 Federal Award Number and Year (or Other Identifying Number): FY2022 Pass-Through Entity: Indiana Department of Child Services Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context Clerk's Incentive Fund The Clerk Incentive fund is a separate statutorily created fund held at the local County level and represents 22.2 percent of the total incentive funds received by the County. These funds are available for the use of the County Clerk which must be used to improve the efficiency and effectiveness of the Title IV-D program in the County. A Deputy Court Clerk was hired in 1999 to work solely for the County Clerk's Title IV-D Child Support office. From the date of hire, the salary of this employee was paid out of the County's General fund. Beginning in 2016, and through the current audit period, the County paid the employee's salary solely from Fund 8899, the Clerk's Incentive Fund. During the audit period, wages, and benefits, totaling $68,693, were paid out of the Clerk's Incentive Fund. Although salaries and benefits of employees performing Title IV-D duties are an allowable expense of incentive funds, incentive funds must be used to supplement and not supplant existing program funding. Due to the County paying the Deputy Court Clerk's wages and benefits entirely from the Clerk's Incentive Fund, incentive funds were then used to supplant instead of supplement existing program funding. Indirect Costs Indirect costs are expenses that are incurred by other County offices and departments, which indirectly benefit the County Title IV-D offices. Indirect expenses are allocated to the County Title IV-D offices through an indirect Cost Allocation Plan (CAP), which is submitted by the County to the Child Support Bureau of the Indiana Department of Child Services (DCS). Indirect costs charged are based on two-year prior expenditures; therefore, indirect costs charged in 2022 were based on expenditures from 2020. A sample of 25 indirect cost expenditures, totaling $27,077, from the department cost pools from the Cost Allocation Plan (CAP) was selected for testing. For 3 of the 25 expenditures examined, the County was unable to provide the vendor contract; therefore, we were unable to verify if the correct rate for the contract payment was charged. In addition, the County did not have written procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR 200. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 45 CFR 305.35(a) states: "A State must expend the full amount of incentive payments received under this part to supplement, and not supplant, other funds used by the State to carry out IV-D program activities or funds for other activities approved by the Secretary which may contribute to improving the effectiveness or efficiency of the State's IV-D program, including cost-effective contracts with local agencies, whether or not the expenditures for the activity are eligible for reimbursement under this part." Indiana Code 31-25-4-23(c) states: "The amount that a county receives and the terms under which the incentive payment is paid must be in accordance with relevant federal statutes and the federal regulations promulgated under the statutes. However, amounts received as incentive payments may not, without the approval of the county fiscal body, be used to increase or supplement the salary of an elected official. The amounts received as incentive payments must be used to supplement, rather than take the place of, other funds used for Title IV-D program activities." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items . . . (g) Be adequately documented. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (7) 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." Cause A proper system of internal controls over child support enforcement expenditures was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County'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, direct costs associated with one individual's salary paid form the incentive fund were used to supplant not supplement the Child Support program. In addition, expenses within the cost application plan could be verified as accurate. INDIANA STATE BOARD OF ACCOUNTS 19 VIGO COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs Known questioned costs in the amount of $68,693 were identified as detailed in the Condition and Context. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure all expenses paid out of incentive funds supplement the Title IV-D program, and that costs included within the cost allocation plan have adequate supporting documentation to support the amount paid. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2022-005 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: 1/1/2022-12/31/2022 Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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 section 200.403(h)) states: ?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: Management does not track expenses by budget period for Corewell Health East federal Research and Development (R&D) grants and is therefore unable to support that expenses are recorded in the appropriate period of performance. Cause: Management?s General Ledger system was not designed to record R&D expenditures by budget period. Effect or Potential Effect: Expenses could be expensed outside the period performance. Questioned Costs: Unknown Context: Corewell Health East has twenty-five R&D grants. We were unable to test period of performance for seven grants, totalling $765,791, which had budget periods beginning or ending during the audit period. As such, we were unable to conclude if expenses were incurred in the appropriate budget period. Total R&D Cluster expenditures reported on the Schedule for Corewell Health East are $3,348,876 for the year ended December 31, 2022, The total R&D Cluster expenditures reported on the Schedule are $10,507,754 for the year ended December 31, 2022. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend that management design appropriate cost structure to monitor R&D expenditures by performance period Views of Responsible Officials: The hierarchy and functionality of the Corporate financial management system does not support separate budget periods during a single award project period. This was managed manually by the CHE Sponsored Programs Administration via a customized internal report. Effective 7/1/2023, the System transitioned Corewell Health East onto Workday, the common financial management system used by Corewell Health West. The Workday financial management system includes a separate grant module that has the capability to establish defined budget periods under a single award. With the functionality now enabled by Workday, we do not anticipate any barriers to maintaining defined budget periods within an award funding cycle to assure that expenses are recorded in the appropriate period of performance.
Finding 2022-005 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: 1/1/2022-12/31/2022 Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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 section 200.403(h)) states: ?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: Management does not track expenses by budget period for Corewell Health East federal Research and Development (R&D) grants and is therefore unable to support that expenses are recorded in the appropriate period of performance. Cause: Management?s General Ledger system was not designed to record R&D expenditures by budget period. Effect or Potential Effect: Expenses could be expensed outside the period performance. Questioned Costs: Unknown Context: Corewell Health East has twenty-five R&D grants. We were unable to test period of performance for seven grants, totalling $765,791, which had budget periods beginning or ending during the audit period. As such, we were unable to conclude if expenses were incurred in the appropriate budget period. Total R&D Cluster expenditures reported on the Schedule for Corewell Health East are $3,348,876 for the year ended December 31, 2022, The total R&D Cluster expenditures reported on the Schedule are $10,507,754 for the year ended December 31, 2022. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend that management design appropriate cost structure to monitor R&D expenditures by performance period Views of Responsible Officials: The hierarchy and functionality of the Corporate financial management system does not support separate budget periods during a single award project period. This was managed manually by the CHE Sponsored Programs Administration via a customized internal report. Effective 7/1/2023, the System transitioned Corewell Health East onto Workday, the common financial management system used by Corewell Health West. The Workday financial management system includes a separate grant module that has the capability to establish defined budget periods under a single award. With the functionality now enabled by Workday, we do not anticipate any barriers to maintaining defined budget periods within an award funding cycle to assure that expenses are recorded in the appropriate period of performance.
Finding 2022-005 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: 1/1/2022-12/31/2022 Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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 section 200.403(h)) states: ?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: Management does not track expenses by budget period for Corewell Health East federal Research and Development (R&D) grants and is therefore unable to support that expenses are recorded in the appropriate period of performance. Cause: Management?s General Ledger system was not designed to record R&D expenditures by budget period. Effect or Potential Effect: Expenses could be expensed outside the period performance. Questioned Costs: Unknown Context: Corewell Health East has twenty-five R&D grants. We were unable to test period of performance for seven grants, totalling $765,791, which had budget periods beginning or ending during the audit period. As such, we were unable to conclude if expenses were incurred in the appropriate budget period. Total R&D Cluster expenditures reported on the Schedule for Corewell Health East are $3,348,876 for the year ended December 31, 2022, The total R&D Cluster expenditures reported on the Schedule are $10,507,754 for the year ended December 31, 2022. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend that management design appropriate cost structure to monitor R&D expenditures by performance period Views of Responsible Officials: The hierarchy and functionality of the Corporate financial management system does not support separate budget periods during a single award project period. This was managed manually by the CHE Sponsored Programs Administration via a customized internal report. Effective 7/1/2023, the System transitioned Corewell Health East onto Workday, the common financial management system used by Corewell Health West. The Workday financial management system includes a separate grant module that has the capability to establish defined budget periods under a single award. With the functionality now enabled by Workday, we do not anticipate any barriers to maintaining defined budget periods within an award funding cycle to assure that expenses are recorded in the appropriate period of performance.
Finding 2022-005 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: 1/1/2022-12/31/2022 Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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 section 200.403(h)) states: ?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: Management does not track expenses by budget period for Corewell Health East federal Research and Development (R&D) grants and is therefore unable to support that expenses are recorded in the appropriate period of performance. Cause: Management?s General Ledger system was not designed to record R&D expenditures by budget period. Effect or Potential Effect: Expenses could be expensed outside the period performance. Questioned Costs: Unknown Context: Corewell Health East has twenty-five R&D grants. We were unable to test period of performance for seven grants, totalling $765,791, which had budget periods beginning or ending during the audit period. As such, we were unable to conclude if expenses were incurred in the appropriate budget period. Total R&D Cluster expenditures reported on the Schedule for Corewell Health East are $3,348,876 for the year ended December 31, 2022, The total R&D Cluster expenditures reported on the Schedule are $10,507,754 for the year ended December 31, 2022. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend that management design appropriate cost structure to monitor R&D expenditures by performance period Views of Responsible Officials: The hierarchy and functionality of the Corporate financial management system does not support separate budget periods during a single award project period. This was managed manually by the CHE Sponsored Programs Administration via a customized internal report. Effective 7/1/2023, the System transitioned Corewell Health East onto Workday, the common financial management system used by Corewell Health West. The Workday financial management system includes a separate grant module that has the capability to establish defined budget periods under a single award. With the functionality now enabled by Workday, we do not anticipate any barriers to maintaining defined budget periods within an award funding cycle to assure that expenses are recorded in the appropriate period of performance.
Finding 2022-005 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: 1/1/2022-12/31/2022 Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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 section 200.403(h)) states: ?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: Management does not track expenses by budget period for Corewell Health East federal Research and Development (R&D) grants and is therefore unable to support that expenses are recorded in the appropriate period of performance. Cause: Management?s General Ledger system was not designed to record R&D expenditures by budget period. Effect or Potential Effect: Expenses could be expensed outside the period performance. Questioned Costs: Unknown Context: Corewell Health East has twenty-five R&D grants. We were unable to test period of performance for seven grants, totalling $765,791, which had budget periods beginning or ending during the audit period. As such, we were unable to conclude if expenses were incurred in the appropriate budget period. Total R&D Cluster expenditures reported on the Schedule for Corewell Health East are $3,348,876 for the year ended December 31, 2022, The total R&D Cluster expenditures reported on the Schedule are $10,507,754 for the year ended December 31, 2022. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend that management design appropriate cost structure to monitor R&D expenditures by performance period Views of Responsible Officials: The hierarchy and functionality of the Corporate financial management system does not support separate budget periods during a single award project period. This was managed manually by the CHE Sponsored Programs Administration via a customized internal report. Effective 7/1/2023, the System transitioned Corewell Health East onto Workday, the common financial management system used by Corewell Health West. The Workday financial management system includes a separate grant module that has the capability to establish defined budget periods under a single award. With the functionality now enabled by Workday, we do not anticipate any barriers to maintaining defined budget periods within an award funding cycle to assure that expenses are recorded in the appropriate period of performance.
Finding 2022-005 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: 1/1/2022-12/31/2022 Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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 section 200.403(h)) states: ?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: Management does not track expenses by budget period for Corewell Health East federal Research and Development (R&D) grants and is therefore unable to support that expenses are recorded in the appropriate period of performance. Cause: Management?s General Ledger system was not designed to record R&D expenditures by budget period. Effect or Potential Effect: Expenses could be expensed outside the period performance. Questioned Costs: Unknown Context: Corewell Health East has twenty-five R&D grants. We were unable to test period of performance for seven grants, totalling $765,791, which had budget periods beginning or ending during the audit period. As such, we were unable to conclude if expenses were incurred in the appropriate budget period. Total R&D Cluster expenditures reported on the Schedule for Corewell Health East are $3,348,876 for the year ended December 31, 2022, The total R&D Cluster expenditures reported on the Schedule are $10,507,754 for the year ended December 31, 2022. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend that management design appropriate cost structure to monitor R&D expenditures by performance period Views of Responsible Officials: The hierarchy and functionality of the Corporate financial management system does not support separate budget periods during a single award project period. This was managed manually by the CHE Sponsored Programs Administration via a customized internal report. Effective 7/1/2023, the System transitioned Corewell Health East onto Workday, the common financial management system used by Corewell Health West. The Workday financial management system includes a separate grant module that has the capability to establish defined budget periods under a single award. With the functionality now enabled by Workday, we do not anticipate any barriers to maintaining defined budget periods within an award funding cycle to assure that expenses are recorded in the appropriate period of performance.
Finding 2022-005 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: 1/1/2022-12/31/2022 Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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 section 200.403(h)) states: ?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: Management does not track expenses by budget period for Corewell Health East federal Research and Development (R&D) grants and is therefore unable to support that expenses are recorded in the appropriate period of performance. Cause: Management?s General Ledger system was not designed to record R&D expenditures by budget period. Effect or Potential Effect: Expenses could be expensed outside the period performance. Questioned Costs: Unknown Context: Corewell Health East has twenty-five R&D grants. We were unable to test period of performance for seven grants, totalling $765,791, which had budget periods beginning or ending during the audit period. As such, we were unable to conclude if expenses were incurred in the appropriate budget period. Total R&D Cluster expenditures reported on the Schedule for Corewell Health East are $3,348,876 for the year ended December 31, 2022, The total R&D Cluster expenditures reported on the Schedule are $10,507,754 for the year ended December 31, 2022. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend that management design appropriate cost structure to monitor R&D expenditures by performance period Views of Responsible Officials: The hierarchy and functionality of the Corporate financial management system does not support separate budget periods during a single award project period. This was managed manually by the CHE Sponsored Programs Administration via a customized internal report. Effective 7/1/2023, the System transitioned Corewell Health East onto Workday, the common financial management system used by Corewell Health West. The Workday financial management system includes a separate grant module that has the capability to establish defined budget periods under a single award. With the functionality now enabled by Workday, we do not anticipate any barriers to maintaining defined budget periods within an award funding cycle to assure that expenses are recorded in the appropriate period of performance.
2022 ? 001 Emergency Rental Assistance Eligibility Prior Year Finding: N/A Federal Agency: Department of the Treasury Federal Program: COVID-19 ? Emergency Rental Assistance Assistance Listing Number: 21.023 Award Number and Period: ERA0279 (1/12/2021 ? 9/30/2022) ERAE0206 (5/10/2021 ? 9/30/2025) ERAE0299 (5/10/2021 ? 9/30/2025) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: In accordance with Consolidated Appropriations Act, 2021 and 2 CFR 200.403 costs must be adequately documented, and benefits paid to or on behalf of individuals must be calculated correctly. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The County incorrectly processed a benefit payment that included an overpayment of $30 by inadvertently including utilities on top of base rent. Questioned Costs: $30 ? Federal share of overpayment made Context: Sixty cases were selected for testing and the following exception was noted: ? For 1 of 60 cases tested, an overpayment was made. Total benefit amount overpaid totaled $30 by including utilities on top of base rent. Per the rent ledger and rental agreement, base rent and utilities totaled $1,525 and the payment total $1,555. Cause: The County did not have sufficient controls in place to ensure that all payments were processed adequately and could be supported. Effect The County made an overpayment of $30 to eligible participants using Emergency Rental Assistance funds. Recommendation: We recommend the County review its procedures and controls over the processing of beneficiary payments to ensure amounts are properly paid and reimbursed. Views of responsible officials: Management agrees with the finding.
FINDING 2022-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Procurement and Suspension and Debarment, Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY2021 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Procurement and Suspension and Debarment, Subrecipient Monitoring Audit Findings: Material Weakness, Modified Opinion Condition and Context The City made a payment to a non-profit agency (non-profit) in the amount of $350,000. The City could not provide documentation to support whether the non-profit was considered by the City to be a beneficiary or a subrecipient of State and Local Fiscal Recovery Funds (SLFRF). Documentation presented for audit to support the payment was an invoice from the non-profit and the City's approved Recovery Plan, neither of which included sufficient evidence to determine the relationship between the two entities. Due to the lack of sufficient audit evidence, we were unable to identify whether the payment was to a beneficiary or a subrecipient in order to perform the required corresponding audit procedures. If the non-profit had been determined by the City to be a subrecipient, the City would have been required to complete monitoring procedures designated for subrecipient relationships, including ensuring the non-profit complied with federal statutes, regulations, and the terms and conditions of the federal award. In addition, the City did not perform procedures to verify if the non-profit was suspended or debarred or otherwise prohibited from participating in federal awards prior to issuing the payment. Furthermore, the City did not have policies or procedures as part of a proper internal control system in place to ensure payments made from SLFRF funds were free of conflicts of interest. A conflict of interest arises when an employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated, has a financial or other interest in or a tangible personal benefit from an entity considered for a payment. The Chief Executive Officer of the non-profit at the time that the payment of $350,000 was received was also the wife of the President of the Common Council. The President of the Common Council did not have a conflict-of-interest statement filed to disclose the circumstance, nor did the President of the Common Council abstain from voting on the City's plan for utilizing the SLFRF funding, which included the payment to the non-profit. In addition to the payment to the non-profit, the City paid premium pay, totaling $50,000, to ten exempt employees whose earnings exceeded the 150 percent of the average annual wage threshold. The City was required to notify the U.S. Department of the Treasury if the employees were classified as exempt or if the employees' wages were over the threshold. The City did not submit a reasoning for the premium pay payments. We consider the $400,000 paid to the non-profit and the employees to be questioned costs. The lack of internal controls and noncompliance were isolated to the payments as described above. 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). . . ." 31 CFR 35.6(b) states in part: "Responding to the public health emergency or its negative economic impacts. A recipient may use funds to respond to the public health emergency or its negative economic impacts if the use meets the criteria provided in paragraph (b)(1) of this section or is enumerated in paragraph (b)(3) of this section; . . . (1) Identifying eligible responses to the public health emergency or it negative impacts. (i) A program, service, or capital expenditure is eligible under this paragraph (b)(1) if a recipient identifies a harm or impact to a beneficiary or class of beneficiaries caused or exacerbated by the public health emergency or its negative impacts and the program, service, or capital expenditure responds to such harm. . . ." 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. . . . (g) be adequately documented. . . ." 31 CFR 35.3 states in part: ". . . Obligation means an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment. . . ." Federal Register, Vol. 87, No.18, page 4400, states in part: ". . . as part of accepting the Award Terms and Conditions for SLFRF, each recipient agreed to maintain a conflict-of-interest policy consistent with 2 CFR 200.318(c) that is applicable to all activities funded with the SLFRF award. This award term requires recipients and subrecipients to report to Treasury or the pass-through agency, as appropriate, any potential conflict of interest related to the award funds per 2 CFR 200.112. . . ." 2 CFR 200.112 states: "The Federal awarding agency must establish conflict of interest policies for Federal awards. The non-Federal entity must disclose in writing any potential conflict of interest to the Federal awarding agency or pass-through entity in accordance with applicable Federal awarding agency policy." 2 CFR 200.318(c)(1) states in part: "The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. . . ." Coronavirus State and Local Fiscal Recovery Funds: Overview of the Final Rule, pages 35-36, states in part: "The Coronavirus State and Local Fiscal Recovery Funds may be used to provide premium pay to eligible workers performing essential work during the pandemic. Premium pay may be awarded to eligible workers up to $13 per hour. Premium pay must be in addition to wages or remuneration (i.e., compensation) the eligible worker otherwise receives. Premium pay may not exceed $25,000 for any single worker during the program. . . . 3. Confirm that the premium pay 'responds to' workers performing essential work during the COVID-19 public health emergency. Under the final rule, which broadened the share of eligible workers who can receive premium pay without a written justification, recipients may meet this requirement in one of three ways: ? Eligible worker receiving premium pay is earning (with the premium included) at or below 150 percent of their residing state or county's average annual wage for all occupations, as defined by the Bureau of Labor Statistics' Occupational Employment and Wage Statistics, whichever is higher, on an annual basis; or ? Eligible worker receiving premium pay is not exempt from the Fair Labor Standards Act overtime provisions; or ? If a worker does not meet either of the above requirements, the recipient must submit written justification to Treasury detailing how the premium pay is otherwise responsive to workers performing essential work during the public health emergency. This may include a description of the essential worker's duties, health, or financial risks faced due to COVID-19, and why the recipient determined that the premium pay was responsive. Treasury anticipates that recipients will easily be able to satisfy the justification requirement for front-line workers, like nurses and hospital staff. . . ." Cause The system of internal controls as established by management of the City was not properly designed, nor implemented. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect City management's views of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. These policies and procedures should include the preparation and retention of appropriate documentation to support a determination of the relationship with the non-profit. Additionally, policies and procedures were not in place to ensure conflict-of-interest statements or written justification for the premium pay paid to employees were filed as required. 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 of the failure to identify, as well as document the relationship with the nonprofit, the City's compliance with the applicable compliance requirements could not be verified. If the City had determined the non-profit to be a subrecipient, the City would have been responsible for monitoring the non-profit, and additional audit procedures related to subrecipient monitoring would have been required. The failure to file a conflict-of-interest statement and abstain from voting on matters related to the SLFRF funds caused the payment to the non-profit to be a questioned cost of the federal award. 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 City. Questioned Costs Known questioned costs in the amount of $400,000 were identified as noted in the Condition and Context. Recommendation We recommended that management of the City design and implement a proper system of internal controls and develop policies and procedures to ensure adequate supporting documentation is retained to be presented for audit and that appropriate conflict-of-interest statements are filed. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2022 Pass-Through Entity: Boone County Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/ Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context The Town submitted an application to the Indiana Finance Authority's (IFA) Clean Water State Revolving Fund (SRF) Loan Program on June 13, 2019. The Clean Water SRF provides financial assistance to local communities for the planning, design, construction, renovation, improvement, or expansion of wastewater collection and treatment systems, or for other activities that are permitted by the Clean Water Act. The Town's proposed project was for infrastructure improvements and the expansion of its existing waste stabilization lagoon. The Town submitted to IFA the required Preliminary Engineering Report (PER), which provided the information necessary for IFA to determine technical, economic, and environmental adequacy of the proposed project. On November 18, 2020, the Town received approval of its PER from IFA. This approval was contingent upon the issuance of all required permits, including construction permits. After receiving approval, the Town was to contact its financial advisor and its nationally-recognized bond counsel to assist in preparing the appropriate financial and legal documents needed to close the Town's SRF loan. All SRF Loan Program requirements, including bidding the entire SRF-financed project, was to be completed prior to the Town receiving SRF funding. On July 26, 2021, the Town received the necessary permits, including the construction permit issued by the Indiana Department of Environmental Management related to the waste stabilization lagoon project. On October 25, 2021, the Town passed Resolution No. 2021-7 A Resolution Authorizing the Issuance of Interim Financing with Home National Bank for the Cost of Improvements to the Sewage Works of the Town. As a result, the Town issued Sewage Works Bond Anticipation Notes of 2021 in the principal amount of $1,500,000. On March 11, 2022, the Town received a $1,500,000 subaward from Boone County (County). The subaward was made from the County's allocation of State and Local Fiscal Recovery Funds (SLFRF). On March 12, 2022, the Town made a payment of $1,500,000 to Home National Bank to repay the Sewage Works Bond Anticipation Notes of 2021. The source of the payment was the SLFRF subaward received from the County on March 11, 2022. On April 21, 2022, the Town received a $500,000 subaward from the County. The subaward was made from the County's allocation of State and Local Fiscal Recovery Funds (SLFRF). Effective on April 29, 2022, the Town entered into a Subrecipient Agreement (agreement) with the County. Per the agreement, the County appropriated $2,000,000 of its SLFRF allocation as a subaward to the Town to construct certain improvements and expansions of the Town's sanitary sewer system and lagoon. The agreement is to remain in effect no later than the later of December 31, 2026, or the completion of the project and payment of the final project expenses, unless terminated by the County in writing. Per the agreement, the Town agreed to comply with all federal, state, and local laws and all requirements and published guidance set forth regarding the usage of any and all SLFRF monies. Per SLFRF program regulations, the period of performance for the SLFRF award began on the date the funds were disbursed and ends on December 31, 2026. As such, funds may only be used to cover costs incurred during the period that began on March 3, 2021, and ends on December 31, 2024. Recipients must liquidate all obligations incurred by December 31, 2024, under the award no later than December 31, 2026, which is the end of the period of performance. Although the Town's project is an eligible water and sewer infrastructure project under the SLFRF Final Rule, the project was initiated and approved by the Town prior to the SLFRF period of performance beginning date of March 3, 2021. Further, the project was not prospective in nature, and the Town incurred a financial obligation prior to the beginning of the period of performance. In addition, the SLFRF subaward received from the County was used to pay the principal on an outstanding debt that was initiated outside the effective date of the subaward agreement. As such, the payment of $1,500,000 was determined to be questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 35.5(a) states: "In general. A recipient may only use funds to cover costs incurred during the period beginning March 3, 2021, and ending December 31, 2024, for one or more of the purposes enumerated in sections 602(c)(1) and 603(c)(1) of the Social Security Act, as applicable, including those enumerated in ? 35.6, subject to the restrictions set for in sections 602(c)(2) and 603(c)(2) of the Social Security Act, as applicable." 31 CFR 35.3 states in part: ". . . Obligation means an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment. . . ." 31 CFR 35.6 states in part: "(a) In general. Subject to ?? 35.7 and 35.8, a recipient may use funds for one or more of the purposes described in paragraphs (b) through (f) . . . (b) Responding to the public health emergency or its negative economic impacts. . . . (1) Identifying eligible responses to the public health emergency or it negative economic impacts. (i) A program, service, or capital expenditure . . . (c) Providing premium pay to eligible workers. . . . (d) Providing government services. A recipient may use funds for the provision of government services to the extent of the reduction in the recipient's general revenue due to the public health emergency, . . . (e) Making necessary investments in water, sewer, and broadband infrastructure. . . . (f) Meeting the non-federal matching requirements for Bureau of Reclamation projects. . . ." Interim Final Rule Frequently Asked Questions, Question 4.3, states in part: ". . . Expenses related to financing, including servicing or redeeming notes, would not address the needs of the pandemic response or its negative economic impacts. Such expenses would also not be considered provision of government services, as these financing expenses do not directly provide services or aid to citizens. This applies to paying interest or principal on any outstanding debt instrument, including, for example, short term revenue or tax anticipation notes, or paying fees or issuance costs associated with the issuance of new debt." Federal Register, Vol. 87, No.18, page 4429, states in part: ". . . debt service is not an eligible use of funds either to respond to the public health emergency or its negative economic impacts or as a provision of government services to the extent of revenue loss . . ." 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: . . . (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)." Cause The system of internal controls, as designed and implemented by management of the Town, was not effective to ensure SLFRF funds were used appropriately. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Town'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 such, payment on debt associated with a project outside of the period of performance was allowed to occur. Noncompliance with the provisions of federal statutes, regulations, and terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs Known questioned costs in the amount of $1,500,000 were identified as noted in the Condition and Context. Recommendation We recommended that management of the Town establish a system of internal controls and develop policies and procedures to ensure SLFRF funds are used appropriately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response It is the Town's responsibility to comply with applicable federal regulations and guidelines when accepting and managing a federal award. The Town had designed and implemented a system of internal controls; however, these internal controls were not effective in ensuring that federal funds were obligated during the period of performance and spent in accordance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles. Payments from the Fiscal Recovery Funds are intended to be used prospectively to provide support to governments in responding to the impact of COVID-19. The Town's waste stabilization lagoon project was initiated prior to, and the Town incurred a financial obligation for the project, prior to the pandemic as the contracts and corresponding financing documents were completed prior to the period of performance and could not have been enacted in anticipation of the passage of the Act, as they were executed a year prior to referenced legislation. Furthermore, while "outstanding debt" is not defined in the interim final rule, a general definition is the total amount of money, including interest and fees, owed to a lender or creditor. As such, as soon as the bond anticipation notes were issued, they were "outstanding debt." We reaffirm our finding and will review the status of the finding during our next audit.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-003: Reportable Finding Considered a Significant Deficiency ? Disbursement cutoff Program Name: Market Access Plan Assistance listing #: 10.601 Federal Awarding Agency: U.S. Department of Agriculture Award Number: 12-4336-0-3-999 Compliance Requirement: Allowable Costs/Principles Criteria: According to 2 CFR 200.403, costs must meet a set of criteria in order to be allowable under the federal award, including being determined in accordance with generally accepted accounting principles (GAAP). According to GAAP, expenses must be recognized in the period incurred. Condition: During our testing of allowable cost principles compliance, out of 40 selections, we noted one that was partially expensed in the incorrect year. Cause: The invoice for this selection included services performed in both fiscal year 2022 and 2023, but the entire invoice balance was expensed in 2022. Effect: The auditee was not in compliance with allowable cost principles outlined in of 2 CFR 200.403 resulting in program expenses being recognized in the incorrect year. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization adopt procedures for more detailed review of invoices prior to recognizing expenses. Invoices should be reviewed in detail to determine when the services were performed to therefore recognize the expense appropriately, rather than recognizing invoices upon receipt or upon payment. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
Criteria or specific requirement: 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: We identified two instances in which expenses charged to the grant were outside of the period of performance. Context: We selected 30 items from the entire Continuum of Care expenditure population for the year ended December 31, 2022. Of the 30 items selected for testing, two items were identified in which the underlying charge occurred prior to the period of performance. Effect: Amounts were inappropriately charged to the grant. Questioned costs: Amounts incorrectly charged to the grant totaled $32.27, less than the questioned costs threshold of $25,000. Cause: For one of the transactions that was identified that had been charged outside the period of performance, the employee responsible for entering the expense and determining whether it should be included or excluded from the grant reimbursement request was later placed on a performance improvement plan due to errors in data entry. For both transactions, as of December 31, 2022, the grant award had not been closed out, and therefore had not yet been subject to the Organization?s control to review expenses charged in detail and remove those outside of the period of performance. Repeat finding: No. Recommendation: We recommend more training be provided to employees responsible for reviewing grant expenses as well as over the various compliance requirements to ensure expenses are only charged when within the period of performance. We further recommend management tighten up the review process to ensure expenses that are outside the period of performance are noted at the time of the initial review. Views of responsible officials and planned corrective actions: Contracts charged for expenses outside of the period of performance have been credited for ineligible expenses. Share has provided additional training to accounting staff about the allowability of expenses being based on both contract criteria and the period of performance. Additionally, training was provided on key identifiers that could flag an exception in allowability based on period of performance, and how to catch this in the review of expenses. Additionally, training was provided on general ledgers transactions that require further review for period of performance allowability during monthly review of expenses prior to preparing invoices. Training included this being a specific area of focus for review during periods when a contract terms and a new contract starts. This training will be provided to all new accounting staff and will be incorporated as refresher trainings if upon review contract and grant administrator expense reviews identify this as being a continued issue by staff performing expense data entry.
2022-002: Significant Deficiency Emergency Solutions Grant Program ? 14.231 ? Allowable Costs / Activities Criteria The ?Basic Guidelines? section of 2 CFR Part 200, Subpart E Section 200.403, requires charges to federal awards to be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. Condition The Organization paid more than the invoice amount for one transaction. Cause The Organization did not have sufficient procedures in place to ensure that only necessary and reasonable costs were charged to this program. Effect The Organization charged costs to this federal program that were not necessary and reasonable for this federal program. Questioned Costs $4,532 Context A sample of 5 transactions were selected for testing this federal program to determine if the finding issued in the prior year has been resolved. For one transaction tested, the amount paid exceeded the invoice amount due to oversight. Repeat Finding Yes Recommendation The Organization should implement procedures to ensure that only necessary, reasonable costs and incurred costs are charged to the program. Views of Responsible Officials and Planned Corrective Actions The Organization agrees with the recommendation and will implement immediately.
2022-002 Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP2889, 2022 Compliance Requirement Affected: Allowable Costs and Allowable Activities Award Period: Year Ended December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: According to Uniform Guidance 2 CFR 200.403, costs reported under one federal program should not be included as a cost of any other federally financed program in either the current or a prior period. Condition: Federal expenditures were reported under two federal grant programs. Questioned Costs: $385,015 Context: During our testing, it was noted that there were costs reported under the SLFRF grant that were also being reported under other federally funded human service programs. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: Lack of oversight by management. Effect: Ineligible costs are being reported on the Schedule of Expenditures of Federal Awards. Repeat Finding: No. Recommendation: We recommend that the County include consideration of any expenditures that may be part of other federal programs as part of their review. Views of responsible officials: There is no disagreement with the audit finding.
2022-002 Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP2889, 2022 Compliance Requirement Affected: Allowable Costs and Allowable Activities Award Period: Year Ended December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: According to Uniform Guidance 2 CFR 200.403, costs reported under one federal program should not be included as a cost of any other federally financed program in either the current or a prior period. Condition: Federal expenditures were reported under two federal grant programs. Questioned Costs: $385,015 Context: During our testing, it was noted that there were costs reported under the SLFRF grant that were also being reported under other federally funded human service programs. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: Lack of oversight by management. Effect: Ineligible costs are being reported on the Schedule of Expenditures of Federal Awards. Repeat Finding: No. Recommendation: We recommend that the County include consideration of any expenditures that may be part of other federal programs as part of their review. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2022-001: Internal control deficiency and noncompliance over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions related to amounts reimbursed for the project worksheet. Identification of the federal program: Assistance Listing Number 97.036: ? COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? U.S. Department of Homeland Security ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) ? Federal award year ? January 20, 2020 to July 1, 2022 ? Pass-through entity ? California Governor?s Office of Emergency Services Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 ? Internal controls. 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, Part 200, Section 200.84 ? Questioned costs states a questioned cost as either (a) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (b) where the costs, at the time of the audit, are not supported by adequate documentation; or (c) where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. 2 CFR, Part 200, Section 200.403 ? 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 ? (g) Be adequately documented The Office of Management and Budget Compliance Supplement states the Federal Emergency Management Agency (FEMA) evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. Costs must be: ? Directly tied to the performance of eligible work ? Adequately documented ? Reduced by all applicable credits ? Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations ? Consistent with applicant?s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant ? Necessary and reasonable to accomplish the work properly and efficiently The Office of Management and Budget Compliance Supplement states the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. Condition: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we observed management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were actual paid expenditures. This resulted in an overstatement of the amount reimbursed by FEMA. Cause: Management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were based on actual paid expenditures. Effect or potential effect: Management was reimbursed by FEMA for expenditures that were not based on the final paid expenditure. Questioned costs: $904,020 ? Assistance Listing Number 97.036 ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) The questioned costs were computed by calculating the difference between the expenditures submitted to FEMA in the amount of $70,825,974 and the actual paid expenditures in the amount of $69,921,954 resulting in $904,020. Context: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we obtained a listing of expenditures submitted for reimbursement to FEMA for the tested project worksheet and observed 561,641 expenditures in the listing for a total value of $70,825,974. We selected a sample of 40 for testing over activities allowed or unallowed and allowable costs/cost principals, a sample of 80 for testing over period of performance, and 1 project worksheet for testing over all compliance requirements. There were 12 out of 120 selections where the expenditures submitted to FEMA were not based on the actual paid expenditures. Management performed an analysis of all expenditures submitted to FEMA and determined the actual paid expenditures amounted to $69,921,954 compared to the expenditures submitted to FEMA in the amount of $70,825,974 resulting in an overstatement of the amount reimbursed by FEMA of $904,020. Management?s control regarding the review of the project worksheet did not identify these expenditures that were not based on actual paid expenditures. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement effective internal controls to ensure expenditures reported for reimbursement in FEMA project worksheets are based on actual paid expenditures. Management should refund the questioned costs to FEMA and work with FEMA to determine the extent of additional courses of action. Management should ensure this is performed through the closeout process of the project worksheet with FEMA. Views of responsible officials: Management will develop and implement an additional layer of review in future FEMA project worksheet submissions to ensure expenditures reported for reimbursement are based on actual paid expenditures. Management will work with FEMA to refund the total overpayment of $904,020 and discuss the extent of additional courses of action. Management will ensure this is performed through the closeout process of the project worksheet with FEMA.
Finding 2022-001: Internal control deficiency and noncompliance over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions related to amounts reimbursed for the project worksheet. Identification of the federal program: Assistance Listing Number 97.036: ? COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? U.S. Department of Homeland Security ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) ? Federal award year ? January 20, 2020 to July 1, 2022 ? Pass-through entity ? California Governor?s Office of Emergency Services Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 ? Internal controls. 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, Part 200, Section 200.84 ? Questioned costs states a questioned cost as either (a) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (b) where the costs, at the time of the audit, are not supported by adequate documentation; or (c) where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. 2 CFR, Part 200, Section 200.403 ? 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 ? (g) Be adequately documented The Office of Management and Budget Compliance Supplement states the Federal Emergency Management Agency (FEMA) evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. Costs must be: ? Directly tied to the performance of eligible work ? Adequately documented ? Reduced by all applicable credits ? Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations ? Consistent with applicant?s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant ? Necessary and reasonable to accomplish the work properly and efficiently The Office of Management and Budget Compliance Supplement states the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. Condition: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we observed management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were actual paid expenditures. This resulted in an overstatement of the amount reimbursed by FEMA. Cause: Management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were based on actual paid expenditures. Effect or potential effect: Management was reimbursed by FEMA for expenditures that were not based on the final paid expenditure. Questioned costs: $904,020 ? Assistance Listing Number 97.036 ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) The questioned costs were computed by calculating the difference between the expenditures submitted to FEMA in the amount of $70,825,974 and the actual paid expenditures in the amount of $69,921,954 resulting in $904,020. Context: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we obtained a listing of expenditures submitted for reimbursement to FEMA for the tested project worksheet and observed 561,641 expenditures in the listing for a total value of $70,825,974. We selected a sample of 40 for testing over activities allowed or unallowed and allowable costs/cost principals, a sample of 80 for testing over period of performance, and 1 project worksheet for testing over all compliance requirements. There were 12 out of 120 selections where the expenditures submitted to FEMA were not based on the actual paid expenditures. Management performed an analysis of all expenditures submitted to FEMA and determined the actual paid expenditures amounted to $69,921,954 compared to the expenditures submitted to FEMA in the amount of $70,825,974 resulting in an overstatement of the amount reimbursed by FEMA of $904,020. Management?s control regarding the review of the project worksheet did not identify these expenditures that were not based on actual paid expenditures. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement effective internal controls to ensure expenditures reported for reimbursement in FEMA project worksheets are based on actual paid expenditures. Management should refund the questioned costs to FEMA and work with FEMA to determine the extent of additional courses of action. Management should ensure this is performed through the closeout process of the project worksheet with FEMA. Views of responsible officials: Management will develop and implement an additional layer of review in future FEMA project worksheet submissions to ensure expenditures reported for reimbursement are based on actual paid expenditures. Management will work with FEMA to refund the total overpayment of $904,020 and discuss the extent of additional courses of action. Management will ensure this is performed through the closeout process of the project worksheet with FEMA.
Finding 2022-001: Internal control deficiency and noncompliance over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions related to amounts reimbursed for the project worksheet. Identification of the federal program: Assistance Listing Number 97.036: ? COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? U.S. Department of Homeland Security ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) ? Federal award year ? January 20, 2020 to July 1, 2022 ? Pass-through entity ? California Governor?s Office of Emergency Services Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 ? Internal controls. 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, Part 200, Section 200.84 ? Questioned costs states a questioned cost as either (a) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (b) where the costs, at the time of the audit, are not supported by adequate documentation; or (c) where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. 2 CFR, Part 200, Section 200.403 ? 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 ? (g) Be adequately documented The Office of Management and Budget Compliance Supplement states the Federal Emergency Management Agency (FEMA) evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. Costs must be: ? Directly tied to the performance of eligible work ? Adequately documented ? Reduced by all applicable credits ? Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations ? Consistent with applicant?s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant ? Necessary and reasonable to accomplish the work properly and efficiently The Office of Management and Budget Compliance Supplement states the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. Condition: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we observed management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were actual paid expenditures. This resulted in an overstatement of the amount reimbursed by FEMA. Cause: Management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were based on actual paid expenditures. Effect or potential effect: Management was reimbursed by FEMA for expenditures that were not based on the final paid expenditure. Questioned costs: $904,020 ? Assistance Listing Number 97.036 ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) The questioned costs were computed by calculating the difference between the expenditures submitted to FEMA in the amount of $70,825,974 and the actual paid expenditures in the amount of $69,921,954 resulting in $904,020. Context: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we obtained a listing of expenditures submitted for reimbursement to FEMA for the tested project worksheet and observed 561,641 expenditures in the listing for a total value of $70,825,974. We selected a sample of 40 for testing over activities allowed or unallowed and allowable costs/cost principals, a sample of 80 for testing over period of performance, and 1 project worksheet for testing over all compliance requirements. There were 12 out of 120 selections where the expenditures submitted to FEMA were not based on the actual paid expenditures. Management performed an analysis of all expenditures submitted to FEMA and determined the actual paid expenditures amounted to $69,921,954 compared to the expenditures submitted to FEMA in the amount of $70,825,974 resulting in an overstatement of the amount reimbursed by FEMA of $904,020. Management?s control regarding the review of the project worksheet did not identify these expenditures that were not based on actual paid expenditures. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement effective internal controls to ensure expenditures reported for reimbursement in FEMA project worksheets are based on actual paid expenditures. Management should refund the questioned costs to FEMA and work with FEMA to determine the extent of additional courses of action. Management should ensure this is performed through the closeout process of the project worksheet with FEMA. Views of responsible officials: Management will develop and implement an additional layer of review in future FEMA project worksheet submissions to ensure expenditures reported for reimbursement are based on actual paid expenditures. Management will work with FEMA to refund the total overpayment of $904,020 and discuss the extent of additional courses of action. Management will ensure this is performed through the closeout process of the project worksheet with FEMA.
Unallowable Costs Significant Deficiency U.S. SMALL BUSINESS ASSOCIATION (SBA) ALN #: 59.077 Federal Award Identification #: COVID-19 Community Navigator Pilot Program (SBAHQ22CNP0036) Condition: The Organization charged and was reimbursed for grant expenses that were not paid. There also is not a clear trail from source document to expenditures charged to the federal grant. Criteria: CFR 200.302, 200.403 Questioned Costs: $17,984 Context: Out of $253,139 of non-payroll expenses charged to the grant and reimbursed, $17,984 was not yet paid to program beneficiaries. Cause: Financial management system is not adequate to track grant funds and expenses from source document to grant reimbursement. Effect: Potential for over charging the grant for expenses not allocable to the program or charging the same expense to multiple funding sources. Identification as repeat finding, if applicable: Not Applicable Recommendation: We recommend that the Organization track grant funds through a general ledger project designation to provide an audit trail from source document to grant revenue and allowable grant expenditures. We also recommend that the program beneficiaries be paid or the funds reimbursed be returned to the SBA. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.