FINDING 2022-005 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-042-PN01, 21611-042-PN01, 21619-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness; Modified Opinion Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 20611-042-PN01, 21611-042-PN01, and 21619-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance were isolated to the 20611-042-PN01, 21611-042-PN01, and 21619-042-PN01 grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management had not developed an effective system of internal control that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
(2022-052) Title: Internal control over ESF expenditures needs improvement Prior Year Findings: None State Department: Education State Bureau: Office of Federal Emergency Relief Programs Federal Agency: U.S. Department of Education Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19) Assistance Listing Number: 84.425D, 84.425U Federal Award Identification Number: S425C200004, S425C210004, S425D200004, S425D210004, S425U210004, S425W210020, S425R210044, S425B200039 Compliance Area: Activities allowed or unallowed Allowable costs/cost principles Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: $620,676 Likely Questioned Costs: Likely questioned costs totaling $6,364,627 were projected by dividing the known questioned costs in our sample by total expenditures tested to establish an error rate, then applying that error rate to total expenditures paid in fiscal year 2022. Criteria: 2 CFR 200.303; 2 CFR 200.403; Coronavirus Aid, Relief, and Economic Security (CARES) Act, Public Law No. 116-136; Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, Public Law No. 116-260; American Rescue Plan (ARP) Act, Public Law No. 117-2 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. The CARES Act, CRRSA Act, and ARP Act authorized the creation of the Education Stabilization Fund and its subprograms. Governors and State Education Agencies (SEAs) must demonstrate that costs incurred by governors, SEAs, and subrecipients are allowable under the relevant statutory and regulatory provisions, assurances, and certification and agreement, and consistent with the purpose of the Education Stabilization Fund, which is to prevent, prepare for, and respond to COVID-19. Condition: Education Stabilization Funds (ESF) were authorized by Federal legislation for use by school administrative units (SAUs) within the State to prevent, prepare for, and respond to the COVID-19 pandemic. SAUs were required to submit applications to the Office of Federal Emergency Relief Programs (OFERP) under the Department of Education outlining identified uses for ESF including planned projects. Applications included detail on costs and the necessity of costs as a result of the COVID-19 pandemic. Program coordinators within OFERP were responsible for reviewing and approving applications submitted by SAUs. Once there was an approved application on file, SAUs could submit reimbursement requests to the Department for expenditures identified and approved in the application. The Office of the State Auditor (OSA) tested 60 SAU reimbursement requests to ensure that only allowable costs were charged to ESF and found that: ? one request for reimbursement contained an invoice for the purchase and installation of a new hot water boiler. The boiler project description stated that the school was in need of a new hot water boiler because it was likely that the existing equipment would not pass inspection after the current year. The cost of the new boiler and installation totaled $154,800. Replacing a boiler that was likely not going to pass upcoming inspections would have been a necessary project of the SAU independent of the COVID-19 pandemic. ? one request for reimbursement contained an invoice for replacing two sections of roof at a district elementary school. The roofing project description stated that the roof replacement was needed because they had leaks that may start to impact air quality and a functioning roof was needed in order to have students in person full-time. The cost of the roofing job totaled $54,915. Replacing a leaking roof would have been a necessary project of the SAU independent of the COVID-19 pandemic. Both subrecipients had an approved application on file with OFERP listing these specific projects. OSA selected a non-statistical random sample. OSA expanded testing as a result of the exceptions noted above. OSA reviewed the applications on file for the two SAUs and found a roof replacement project totaling $410,961. The SAU documented the roofing project as necessary to address concerns that could contribute to the possible spread of COVID-19. Replacing a roof would have been a necessary project of the SAU independent of the COVID-19 pandemic. The supporting documentation provided by the SAUs and maintained by the State does not demonstrate that the above costs are consistent with the purpose of ESF which is to prevent, prepare for, and respond to COVID-19; as a result, questioned costs total $620,676. Context: In fiscal year 2022, ESF expenditures totaled $126.4 million, of which $120.6 million was paid to subrecipient SAUs. Cause: ? Misinterpretation of Federal regulations ? Lack of explicit Federal guidance surrounding ESF allowability Effect: ? Noncompliance with Federal regulations ? Known questioned costs ? Potential future questioned costs and disallowances Recommendation: We recommend that the Department review all ESF expenditures to ensure that only allowable costs are charged to the Federal program. Expenditures that do not meet ESF criteria for allowability should be transferred out of ESF. Corrective Action Plan: See F-20 Management?s Response: The Maine Department of Education (MDOE) disagrees with the identified questioned costs. The Office of Federal Emergency Relief Programs (OFERP) utilized guidance provided by the U.S. Department of Education (grantor) and conferred in writing with Maine?s assigned U.S. Department of Education program officer throughout the Education Stabilization Fund application review process. The Maine Department of Education?s OFERP provided the auditor with the grantor?s guidance which clearly states that the questioned costs were allowable, reasonable, and necessary to prepare, prevent, and respond to the COVID-19 pandemic. Throughout the application review process, OFERP utilized ESF federal statutory language and the grantor?s published guidance to determine allowability. Once funding applications were approved, SAUs requested reimbursement from the OFERP for the approved costs outlined in the school administrative unit (SAU) application. The OFERP reviewed SAU reimbursement requests and provided payment for approved expenses. The ESF costs outlined in this finding were allowable, reasonable, and necessary to prepare, prevent, and respond to the COVID-19 pandemic. Documentation provided by the grantor supports the determinations made by the Maine Department of Education. Contact: Shelly Chasse-Johndro, Director of OFERP, DOE, 207-458-3180 Auditor?s Concluding Remarks: Supporting documentation provided by the Department for the reimbursements totaling $620,676 related to two roof replacements and a boiler replacement did not provide adequate evidence that these expenditures were necessary and in line with the allowability criteria of ESF, which is to prevent, prepare for, or respond to COVID-19. While all subrecipients had approved applications on file listing these specific projects, additional allowability considerations should have been made and documented prior to reimbursement. All questioned costs reported by OSA are related to projects that, based on the support maintained by the Department, would have been necessary for the SAU to address independent of the COVID-19 pandemic. Without documentation and evidence to substantiate that the expenditures are for needs directly arising from the public health emergency, OSA cannot determine that the reimbursements were in fact to prepare for, prevent, and respond to COVID-19; therefore, OSA questions the allowability of these costs. The finding remains as stated. (State Number: 22-1235-04)
(2022-067) Title: Internal control over payments made to and on behalf of TANF clients needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Temporary Assistance for Needy Families (TANF) (COVID-19) Assistance Listing Number: 93.558 Federal Award Identification Number: 1901METANF, 2001METANF, 2101METANF Compliance Area: Activities allowed or unallowed Allowable costs/cost principles Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: $1,447 Likely Questioned Costs: Likely questioned costs totaling $35,002 were projected by dividing the identified known overpayment in our sample by total payments tested to establish an error rate, then applying that error rate to total payments to TANF clients for these services and payments to providers on behalf of TANF clients in fiscal year 2022. Criteria: 2 CFR 200.303; 2 CFR 200.403; 45 CFR 263.11 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. The Department must use Federal TANF funds for expenditures that are reasonably calculated to accomplish the purposes of TANF. Use of funds in violation of this is considered misuse of funds. Condition: The Department issues TANF payments directly to a TANF client for various items and services. The Department also issues TANF payments directly to providers on behalf of TANF clients for services rendered such as child care and transportation. The Office of the State Auditor (OSA) tested 60 payments and found that: ? one payment issued in October 2021 overpaid a provider by $22 for Transitional Child Care. Upon further review, OSA found that an additional $506 was overpaid to the child- care provider during fiscal year 2022. The overpayment was identified by the Department in December 2021; however, as of audit testing, 14 months after the overpayment was identified, there has not been a recoupment. ? one payment overpaid a provider by $15 for Transitional Child Care. Upon further review, OSA found that an additional $555 was overpaid to the childcare provider during fiscal year 2022. The overpayment was identified by OSA during testing. ? one payment overpaid a provider by $17 for Transitional Child Care. Upon further review, OSA found that an additional $323 was overpaid to the childcare provider during fiscal year 2022. The overpayment was identified by OSA during testing. ? one payment issued in May 2022 overpaid a TANF client a total of $75 for clothing. An advance allowance was issued to the TANF client; however, the TANF client did not submit a receipt substantiating the purchase as required. The Department identified the overpayment in July 2022 and $66 of the overpayment was recouped on January 6, 2023. OSA selected a non-statistical random sample. Context: In fiscal year 2022, payments to TANF clients for services other than direct cash benefits and payments to providers on behalf of TANF clients totaled $6.8 million. Cause: ? Lack of adequate procedures ? Lack of supervisory oversight Effect: ? Known questioned costs ? Potential future questioned costs and disallowances ? Noncompliance with Federal regulations Recommendation: We recommend that the Department implement procedures to ensure that payments made to TANF clients and providers are accurate, allowable, and adequately documented. We further recommend that the Department increase monitoring procedures over these payments. Corrective Action Plan: See F-24 Management?s Response: The Department disagrees with this finding. The Department?s effective internal controls identified the overpayments, made the referrals, and followed procedures for two of the four exceptions noted. The two exceptions that we did not identify as overpayments we believe are in accordance with the reasonably calculated requirement to accomplish one or more of the four TANF purposes and should not be considered unallowable. The criteria cited do not indicate any requirement to recoup funds within a specific time frame and the exceptions noted demonstrate the effective internal controls rather than indicate any misuse of funds. Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104 Auditor?s Concluding Remarks: The Department?s internal controls did not identify two overpayments in OSA?s sample. The Department did identify the other two overpayments in OSA?s sample; however, for one of those overpayments, no action had been taken by the Department 14 months after the overpayment was identified. Therefore, the Department?s internal controls do not provide reasonable assurance that the Federal award is being managed in compliance with Federal statutes, regulations, and the terms and condition of the award. In accordance with 2 CFR 200.403, for a cost to be allowable under a Federal award, the costs must be reasonable and necessary for the performance of the Federal award. Overpayments made to providers or clients with Federal funds are not a necessary cost for the performance of the Federal award; therefore, OSA questions the allowability of these costs. The finding remains as stated. (State Number: 22-1111-03)
(2022-067) Title: Internal control over payments made to and on behalf of TANF clients needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Temporary Assistance for Needy Families (TANF) (COVID-19) Assistance Listing Number: 93.558 Federal Award Identification Number: 1901METANF, 2001METANF, 2101METANF Compliance Area: Activities allowed or unallowed Allowable costs/cost principles Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: $1,447 Likely Questioned Costs: Likely questioned costs totaling $35,002 were projected by dividing the identified known overpayment in our sample by total payments tested to establish an error rate, then applying that error rate to total payments to TANF clients for these services and payments to providers on behalf of TANF clients in fiscal year 2022. Criteria: 2 CFR 200.303; 2 CFR 200.403; 45 CFR 263.11 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. The Department must use Federal TANF funds for expenditures that are reasonably calculated to accomplish the purposes of TANF. Use of funds in violation of this is considered misuse of funds. Condition: The Department issues TANF payments directly to a TANF client for various items and services. The Department also issues TANF payments directly to providers on behalf of TANF clients for services rendered such as child care and transportation. The Office of the State Auditor (OSA) tested 60 payments and found that: ? one payment issued in October 2021 overpaid a provider by $22 for Transitional Child Care. Upon further review, OSA found that an additional $506 was overpaid to the child- care provider during fiscal year 2022. The overpayment was identified by the Department in December 2021; however, as of audit testing, 14 months after the overpayment was identified, there has not been a recoupment. ? one payment overpaid a provider by $15 for Transitional Child Care. Upon further review, OSA found that an additional $555 was overpaid to the childcare provider during fiscal year 2022. The overpayment was identified by OSA during testing. ? one payment overpaid a provider by $17 for Transitional Child Care. Upon further review, OSA found that an additional $323 was overpaid to the childcare provider during fiscal year 2022. The overpayment was identified by OSA during testing. ? one payment issued in May 2022 overpaid a TANF client a total of $75 for clothing. An advance allowance was issued to the TANF client; however, the TANF client did not submit a receipt substantiating the purchase as required. The Department identified the overpayment in July 2022 and $66 of the overpayment was recouped on January 6, 2023. OSA selected a non-statistical random sample. Context: In fiscal year 2022, payments to TANF clients for services other than direct cash benefits and payments to providers on behalf of TANF clients totaled $6.8 million. Cause: ? Lack of adequate procedures ? Lack of supervisory oversight Effect: ? Known questioned costs ? Potential future questioned costs and disallowances ? Noncompliance with Federal regulations Recommendation: We recommend that the Department implement procedures to ensure that payments made to TANF clients and providers are accurate, allowable, and adequately documented. We further recommend that the Department increase monitoring procedures over these payments. Corrective Action Plan: See F-24 Management?s Response: The Department disagrees with this finding. The Department?s effective internal controls identified the overpayments, made the referrals, and followed procedures for two of the four exceptions noted. The two exceptions that we did not identify as overpayments we believe are in accordance with the reasonably calculated requirement to accomplish one or more of the four TANF purposes and should not be considered unallowable. The criteria cited do not indicate any requirement to recoup funds within a specific time frame and the exceptions noted demonstrate the effective internal controls rather than indicate any misuse of funds. Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104 Auditor?s Concluding Remarks: The Department?s internal controls did not identify two overpayments in OSA?s sample. The Department did identify the other two overpayments in OSA?s sample; however, for one of those overpayments, no action had been taken by the Department 14 months after the overpayment was identified. Therefore, the Department?s internal controls do not provide reasonable assurance that the Federal award is being managed in compliance with Federal statutes, regulations, and the terms and condition of the award. In accordance with 2 CFR 200.403, for a cost to be allowable under a Federal award, the costs must be reasonable and necessary for the performance of the Federal award. Overpayments made to providers or clients with Federal funds are not a necessary cost for the performance of the Federal award; therefore, OSA questions the allowability of these costs. The finding remains as stated. (State Number: 22-1111-03)
(2022-077) Title: Internal control over Child Support Enforcement expenditures needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Child Support Enforcement Assistance Listing Number: 93.563 Federal Award Identification Number: 2001MECSES, 2101MECSES, 2201MECSES Compliance Area: Activities allowed or unallowed Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 2 CFR 200.403; Cooperative Agreement Between State of Maine DHHS and Maine State Judicial Branch for State Fiscal Years 2022 and 2023, Section V (b)(1) The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be adequately documented. The State?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to determine that such funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in cost principles or in the Federal award as to types or amount of cost items. The Administrative Office of the Courts (AOC) under the Judicial Branch must provide a report to the Department of Health and Human Services? (DHHS) Division of Support and Recovery (DSER) for all Judicial Branch estimated expenditures. This report must detail costs that are eligible for Federal financial participation and must be provided within 35 calendar days after the close of the quarters ending in March, June, September, and December. These estimated expenditures are calculated using the per minute rate that was in effect for the prior fiscal year. Within 35 days after the close of the State fiscal year, the AOC will update the per minute rate and provide DSER a report with actual expenditures for the State fiscal year. Condition: The Child Support Enforcement (CSE) program is administered by DSER within DHHS. DHHS has a cooperative agreement with AOC that defines roles, relationships, and responsibilities of the parties, and sets forth a basis for financial reimbursement for court services provided to DHHS by AOC. These services include conducting paternity hearings; hearings to establish, modify, or enforce support orders; civil and criminal complaint hearings related to CSE; providing mediation services; and conducting proceedings related to income withholding responsibilities. AOC sends monthly invoices to the DHHS Service Center (DHHS SC) with estimated costs for work performed for the CSE program. DHHS SC is responsible for transferring funds from the CSE program to AOC. On a quarterly basis, AOC provides DHHS SC with a reconciliation of estimated costs to actual costs. This quarterly reconciliation utilizes the per minute rate that was in effect for the prior fiscal year and is due 35 days after the close of the quarter. Annually, the per minute rate is updated and AOC provides DHHS SC with a final report of actual costs with the updated per minute rate. This final report is due within 35 days after the close of the fiscal year. The Office of the State Auditor (OSA) selected six transfers from DHHS SC to AOC for testing and found that costs incurred for court services were not adequately supported. DHHS SC did not receive two quarterly reports from AOC; therefore, court expenditures were based on estimated costs rather than actual costs. Furthermore, the annual report and reconciliation of estimated costs to actual costs was not completed until five months after the fiscal year end. As a result, expenditure amounts reported by the CSE program are not based on actual costs. OSA reviewed the annual reconciliation and determined that the variance is not material to the program. OSA selected a non-statistical random sample. Context: The CSE program expended $18.8 million in Federal funds during fiscal year 2022, of which $2.2 million was used for court services. Cause: Management override of controls. The program elected to defer reconciling estimated costs to actual costs until the per minute rate was updated by AOC. Effect: CSE program expenditures for fiscal year 2022, specifically relating to AOC expenditures, were understated by the amount included in the annual reconciling invoice for AOC. Recommendation: We recommend that the Department enhance oversight of established procedures to ensure that CSE is in compliance with Federal regulations. Corrective Action Plan: See F-27 Management?s Response: The Department agrees with this finding. The Division of Support Enforcement and Recovery and the Judicial Branch will modify the language of the cooperative agreement to clarify that all allowable costs subject to federal financial participation are adequately and timely documented. Contact: Jerry Joy, Director, Division of Support Enforcement and Recovery, DHHS, 207-624-6985 (State Number: 22-1128-02)
(2022-086) Title: Internal control over deceased client cases and claims analysis needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Office of MaineCare Services Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Medicaid Cluster (COVID-19) Assistance Listing Number: 93.775, 93.777, 93.778 Federal Award Identification Number: 2105ME5MAP, 2205ME5MAP Compliance Area: Allowable costs/costs principles Eligibility Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.403 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be necessary and reasonable for the performance of the Federal award. Condition: The Office for Family Independence (OFI) is responsible for maintaining complete and accurate client information in the Automated Client Eligibility System (ACES). Information entered into ACES is relied upon by the Office of MaineCare Services (OMS) to approve, deny, process, and analyze claims. OFI relies on numerous data sources for identifying and providing client date of death (DOD) information for input into ACES. In some cases where the exact DOD may not be immediately available, the DOD is entered as the last day of the month so that OFI can close the case of a known deceased client in a timely manner. OFI performs monthly crosswalks to compare the DOD entered in ACES to the reported DOD obtained from the Maine Center for Disease Control & Prevention (MeCDC) vital records. OMS has established procedures to identify claims paid with a service date after DOD. These procedures include staff review of claims and identification of appropriate action for any claim that was improperly paid, as certain claims with service dates after death are allowable. With regards to OMS claims identification procedures, OSA analyzed all claims paid for a client with a DOD in fiscal year 2022 and identified 110 claims paid on behalf of 75 clients that had service dates after death but were not identified by OMS procedures. Claims paid on behalf of these clients after DOD totaled $9,988 in fiscal year 2022. With regards to OFI eligibility procedures, OSA tested a sample of 60 clients with DOD in fiscal year 2022 and identified: ? four clients with a DOD in ACES that did not correspond to the actual DOD provided by MeCDC vital records; and ? one client with no DOD recorded in ACES. OSA selected a non-statistical random sample. Audit procedures also identified that: ? three clients for whom claims were paid after DOD had no DOD recorded in ACES; and ? 13 clients with an incorrect DOD identified by OSA during the fiscal year 2021 audit were still not corrected in ACES. Context: The Medicaid program processed $2.2 billion in paid claims in fiscal year 2022. Cause: ? Lack of adequate procedures to ensure DOD information is entered accurately and appropriately updated in ACES ? Lack of adequate procedures to ensure all claims paid after a client?s DOD are identified Effect: ? Claims paid on behalf of deceased clients may go undetected. ? Potential questioned costs and disallowances Recommendation: We recommend that OFI enhance existing procedures to identify and correct DOD information when a known DOD is not initially provided. We further recommend that OFI implement oversight to ensure DOD information is accurately entered into ACES. We recommend that OMS enhance existing procedures to ensure that all claims with service dates after a client?s DOD are identified for review to detect any claims that are not allowable. Corrective Action Plan: See F-31 Management?s Response: The Department partially agrees with this finding. OFI acknowledges a data mismatch of five clients. Edits were made to the standard operating procedures governing the date of death procedures in November of 2021 including articulation of responsible parties and expected timelines for processing. Additionally, OFI continues to process weekly IEVS discrepancy reports based on death data from our federal partners as well as conduct monthly crosswalks with Maine?s CDC Office of Vital Statistics. OMS worked with OSA to review the original population of over 600 claims that were made after a client?s DOD. The original claims identified by OSA were reduced to 110. OMS did not have sufficient time to perform a more detailed analysis into the underlying reasons that these 110 claims were made to clients after DOD. OMS will complete the in-depth review and then consider if additional updates to procedures are necessary. Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104 Auditor?s Concluding Remarks: OFI indicates they have enhanced their procedures as of November 2021, implying these will prevent the types of errors identified in the finding. However, of the three clients for whom no DOD was entered into ACES, two occurred after OFI?s November 2021 standard operating procedures update. Though OSA initially identified approximately 600 claims paid after a client?s DOD that were not identified through OMS? procedures, OMS was able to provide additional documentation to remove approximately 500 claims from OSA?s list of exceptions. For the remaining 110 claims, OMS could not provide documentation to support that these claims were identified through OMS? procedures. The finding remains as stated. (State Number: 22-1106-11)
(2022-086) Title: Internal control over deceased client cases and claims analysis needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Office of MaineCare Services Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Medicaid Cluster (COVID-19) Assistance Listing Number: 93.775, 93.777, 93.778 Federal Award Identification Number: 2105ME5MAP, 2205ME5MAP Compliance Area: Allowable costs/costs principles Eligibility Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.403 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be necessary and reasonable for the performance of the Federal award. Condition: The Office for Family Independence (OFI) is responsible for maintaining complete and accurate client information in the Automated Client Eligibility System (ACES). Information entered into ACES is relied upon by the Office of MaineCare Services (OMS) to approve, deny, process, and analyze claims. OFI relies on numerous data sources for identifying and providing client date of death (DOD) information for input into ACES. In some cases where the exact DOD may not be immediately available, the DOD is entered as the last day of the month so that OFI can close the case of a known deceased client in a timely manner. OFI performs monthly crosswalks to compare the DOD entered in ACES to the reported DOD obtained from the Maine Center for Disease Control & Prevention (MeCDC) vital records. OMS has established procedures to identify claims paid with a service date after DOD. These procedures include staff review of claims and identification of appropriate action for any claim that was improperly paid, as certain claims with service dates after death are allowable. With regards to OMS claims identification procedures, OSA analyzed all claims paid for a client with a DOD in fiscal year 2022 and identified 110 claims paid on behalf of 75 clients that had service dates after death but were not identified by OMS procedures. Claims paid on behalf of these clients after DOD totaled $9,988 in fiscal year 2022. With regards to OFI eligibility procedures, OSA tested a sample of 60 clients with DOD in fiscal year 2022 and identified: ? four clients with a DOD in ACES that did not correspond to the actual DOD provided by MeCDC vital records; and ? one client with no DOD recorded in ACES. OSA selected a non-statistical random sample. Audit procedures also identified that: ? three clients for whom claims were paid after DOD had no DOD recorded in ACES; and ? 13 clients with an incorrect DOD identified by OSA during the fiscal year 2021 audit were still not corrected in ACES. Context: The Medicaid program processed $2.2 billion in paid claims in fiscal year 2022. Cause: ? Lack of adequate procedures to ensure DOD information is entered accurately and appropriately updated in ACES ? Lack of adequate procedures to ensure all claims paid after a client?s DOD are identified Effect: ? Claims paid on behalf of deceased clients may go undetected. ? Potential questioned costs and disallowances Recommendation: We recommend that OFI enhance existing procedures to identify and correct DOD information when a known DOD is not initially provided. We further recommend that OFI implement oversight to ensure DOD information is accurately entered into ACES. We recommend that OMS enhance existing procedures to ensure that all claims with service dates after a client?s DOD are identified for review to detect any claims that are not allowable. Corrective Action Plan: See F-31 Management?s Response: The Department partially agrees with this finding. OFI acknowledges a data mismatch of five clients. Edits were made to the standard operating procedures governing the date of death procedures in November of 2021 including articulation of responsible parties and expected timelines for processing. Additionally, OFI continues to process weekly IEVS discrepancy reports based on death data from our federal partners as well as conduct monthly crosswalks with Maine?s CDC Office of Vital Statistics. OMS worked with OSA to review the original population of over 600 claims that were made after a client?s DOD. The original claims identified by OSA were reduced to 110. OMS did not have sufficient time to perform a more detailed analysis into the underlying reasons that these 110 claims were made to clients after DOD. OMS will complete the in-depth review and then consider if additional updates to procedures are necessary. Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104 Auditor?s Concluding Remarks: OFI indicates they have enhanced their procedures as of November 2021, implying these will prevent the types of errors identified in the finding. However, of the three clients for whom no DOD was entered into ACES, two occurred after OFI?s November 2021 standard operating procedures update. Though OSA initially identified approximately 600 claims paid after a client?s DOD that were not identified through OMS? procedures, OMS was able to provide additional documentation to remove approximately 500 claims from OSA?s list of exceptions. For the remaining 110 claims, OMS could not provide documentation to support that these claims were identified through OMS? procedures. The finding remains as stated. (State Number: 22-1106-11)
(2022-086) Title: Internal control over deceased client cases and claims analysis needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Office of MaineCare Services Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Medicaid Cluster (COVID-19) Assistance Listing Number: 93.775, 93.777, 93.778 Federal Award Identification Number: 2105ME5MAP, 2205ME5MAP Compliance Area: Allowable costs/costs principles Eligibility Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.403 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be necessary and reasonable for the performance of the Federal award. Condition: The Office for Family Independence (OFI) is responsible for maintaining complete and accurate client information in the Automated Client Eligibility System (ACES). Information entered into ACES is relied upon by the Office of MaineCare Services (OMS) to approve, deny, process, and analyze claims. OFI relies on numerous data sources for identifying and providing client date of death (DOD) information for input into ACES. In some cases where the exact DOD may not be immediately available, the DOD is entered as the last day of the month so that OFI can close the case of a known deceased client in a timely manner. OFI performs monthly crosswalks to compare the DOD entered in ACES to the reported DOD obtained from the Maine Center for Disease Control & Prevention (MeCDC) vital records. OMS has established procedures to identify claims paid with a service date after DOD. These procedures include staff review of claims and identification of appropriate action for any claim that was improperly paid, as certain claims with service dates after death are allowable. With regards to OMS claims identification procedures, OSA analyzed all claims paid for a client with a DOD in fiscal year 2022 and identified 110 claims paid on behalf of 75 clients that had service dates after death but were not identified by OMS procedures. Claims paid on behalf of these clients after DOD totaled $9,988 in fiscal year 2022. With regards to OFI eligibility procedures, OSA tested a sample of 60 clients with DOD in fiscal year 2022 and identified: ? four clients with a DOD in ACES that did not correspond to the actual DOD provided by MeCDC vital records; and ? one client with no DOD recorded in ACES. OSA selected a non-statistical random sample. Audit procedures also identified that: ? three clients for whom claims were paid after DOD had no DOD recorded in ACES; and ? 13 clients with an incorrect DOD identified by OSA during the fiscal year 2021 audit were still not corrected in ACES. Context: The Medicaid program processed $2.2 billion in paid claims in fiscal year 2022. Cause: ? Lack of adequate procedures to ensure DOD information is entered accurately and appropriately updated in ACES ? Lack of adequate procedures to ensure all claims paid after a client?s DOD are identified Effect: ? Claims paid on behalf of deceased clients may go undetected. ? Potential questioned costs and disallowances Recommendation: We recommend that OFI enhance existing procedures to identify and correct DOD information when a known DOD is not initially provided. We further recommend that OFI implement oversight to ensure DOD information is accurately entered into ACES. We recommend that OMS enhance existing procedures to ensure that all claims with service dates after a client?s DOD are identified for review to detect any claims that are not allowable. Corrective Action Plan: See F-31 Management?s Response: The Department partially agrees with this finding. OFI acknowledges a data mismatch of five clients. Edits were made to the standard operating procedures governing the date of death procedures in November of 2021 including articulation of responsible parties and expected timelines for processing. Additionally, OFI continues to process weekly IEVS discrepancy reports based on death data from our federal partners as well as conduct monthly crosswalks with Maine?s CDC Office of Vital Statistics. OMS worked with OSA to review the original population of over 600 claims that were made after a client?s DOD. The original claims identified by OSA were reduced to 110. OMS did not have sufficient time to perform a more detailed analysis into the underlying reasons that these 110 claims were made to clients after DOD. OMS will complete the in-depth review and then consider if additional updates to procedures are necessary. Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104 Auditor?s Concluding Remarks: OFI indicates they have enhanced their procedures as of November 2021, implying these will prevent the types of errors identified in the finding. However, of the three clients for whom no DOD was entered into ACES, two occurred after OFI?s November 2021 standard operating procedures update. Though OSA initially identified approximately 600 claims paid after a client?s DOD that were not identified through OMS? procedures, OMS was able to provide additional documentation to remove approximately 500 claims from OSA?s list of exceptions. For the remaining 110 claims, OMS could not provide documentation to support that these claims were identified through OMS? procedures. The finding remains as stated. (State Number: 22-1106-11)
(2022-086) Title: Internal control over deceased client cases and claims analysis needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Office of MaineCare Services Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Medicaid Cluster (COVID-19) Assistance Listing Number: 93.775, 93.777, 93.778 Federal Award Identification Number: 2105ME5MAP, 2205ME5MAP Compliance Area: Allowable costs/costs principles Eligibility Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.403 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be necessary and reasonable for the performance of the Federal award. Condition: The Office for Family Independence (OFI) is responsible for maintaining complete and accurate client information in the Automated Client Eligibility System (ACES). Information entered into ACES is relied upon by the Office of MaineCare Services (OMS) to approve, deny, process, and analyze claims. OFI relies on numerous data sources for identifying and providing client date of death (DOD) information for input into ACES. In some cases where the exact DOD may not be immediately available, the DOD is entered as the last day of the month so that OFI can close the case of a known deceased client in a timely manner. OFI performs monthly crosswalks to compare the DOD entered in ACES to the reported DOD obtained from the Maine Center for Disease Control & Prevention (MeCDC) vital records. OMS has established procedures to identify claims paid with a service date after DOD. These procedures include staff review of claims and identification of appropriate action for any claim that was improperly paid, as certain claims with service dates after death are allowable. With regards to OMS claims identification procedures, OSA analyzed all claims paid for a client with a DOD in fiscal year 2022 and identified 110 claims paid on behalf of 75 clients that had service dates after death but were not identified by OMS procedures. Claims paid on behalf of these clients after DOD totaled $9,988 in fiscal year 2022. With regards to OFI eligibility procedures, OSA tested a sample of 60 clients with DOD in fiscal year 2022 and identified: ? four clients with a DOD in ACES that did not correspond to the actual DOD provided by MeCDC vital records; and ? one client with no DOD recorded in ACES. OSA selected a non-statistical random sample. Audit procedures also identified that: ? three clients for whom claims were paid after DOD had no DOD recorded in ACES; and ? 13 clients with an incorrect DOD identified by OSA during the fiscal year 2021 audit were still not corrected in ACES. Context: The Medicaid program processed $2.2 billion in paid claims in fiscal year 2022. Cause: ? Lack of adequate procedures to ensure DOD information is entered accurately and appropriately updated in ACES ? Lack of adequate procedures to ensure all claims paid after a client?s DOD are identified Effect: ? Claims paid on behalf of deceased clients may go undetected. ? Potential questioned costs and disallowances Recommendation: We recommend that OFI enhance existing procedures to identify and correct DOD information when a known DOD is not initially provided. We further recommend that OFI implement oversight to ensure DOD information is accurately entered into ACES. We recommend that OMS enhance existing procedures to ensure that all claims with service dates after a client?s DOD are identified for review to detect any claims that are not allowable. Corrective Action Plan: See F-31 Management?s Response: The Department partially agrees with this finding. OFI acknowledges a data mismatch of five clients. Edits were made to the standard operating procedures governing the date of death procedures in November of 2021 including articulation of responsible parties and expected timelines for processing. Additionally, OFI continues to process weekly IEVS discrepancy reports based on death data from our federal partners as well as conduct monthly crosswalks with Maine?s CDC Office of Vital Statistics. OMS worked with OSA to review the original population of over 600 claims that were made after a client?s DOD. The original claims identified by OSA were reduced to 110. OMS did not have sufficient time to perform a more detailed analysis into the underlying reasons that these 110 claims were made to clients after DOD. OMS will complete the in-depth review and then consider if additional updates to procedures are necessary. Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104 Auditor?s Concluding Remarks: OFI indicates they have enhanced their procedures as of November 2021, implying these will prevent the types of errors identified in the finding. However, of the three clients for whom no DOD was entered into ACES, two occurred after OFI?s November 2021 standard operating procedures update. Though OSA initially identified approximately 600 claims paid after a client?s DOD that were not identified through OMS? procedures, OMS was able to provide additional documentation to remove approximately 500 claims from OSA?s list of exceptions. For the remaining 110 claims, OMS could not provide documentation to support that these claims were identified through OMS? procedures. The finding remains as stated. (State Number: 22-1106-11)
(2022-086) Title: Internal control over deceased client cases and claims analysis needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Office of MaineCare Services Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Medicaid Cluster (COVID-19) Assistance Listing Number: 93.775, 93.777, 93.778 Federal Award Identification Number: 2105ME5MAP, 2205ME5MAP Compliance Area: Allowable costs/costs principles Eligibility Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.403 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be necessary and reasonable for the performance of the Federal award. Condition: The Office for Family Independence (OFI) is responsible for maintaining complete and accurate client information in the Automated Client Eligibility System (ACES). Information entered into ACES is relied upon by the Office of MaineCare Services (OMS) to approve, deny, process, and analyze claims. OFI relies on numerous data sources for identifying and providing client date of death (DOD) information for input into ACES. In some cases where the exact DOD may not be immediately available, the DOD is entered as the last day of the month so that OFI can close the case of a known deceased client in a timely manner. OFI performs monthly crosswalks to compare the DOD entered in ACES to the reported DOD obtained from the Maine Center for Disease Control & Prevention (MeCDC) vital records. OMS has established procedures to identify claims paid with a service date after DOD. These procedures include staff review of claims and identification of appropriate action for any claim that was improperly paid, as certain claims with service dates after death are allowable. With regards to OMS claims identification procedures, OSA analyzed all claims paid for a client with a DOD in fiscal year 2022 and identified 110 claims paid on behalf of 75 clients that had service dates after death but were not identified by OMS procedures. Claims paid on behalf of these clients after DOD totaled $9,988 in fiscal year 2022. With regards to OFI eligibility procedures, OSA tested a sample of 60 clients with DOD in fiscal year 2022 and identified: ? four clients with a DOD in ACES that did not correspond to the actual DOD provided by MeCDC vital records; and ? one client with no DOD recorded in ACES. OSA selected a non-statistical random sample. Audit procedures also identified that: ? three clients for whom claims were paid after DOD had no DOD recorded in ACES; and ? 13 clients with an incorrect DOD identified by OSA during the fiscal year 2021 audit were still not corrected in ACES. Context: The Medicaid program processed $2.2 billion in paid claims in fiscal year 2022. Cause: ? Lack of adequate procedures to ensure DOD information is entered accurately and appropriately updated in ACES ? Lack of adequate procedures to ensure all claims paid after a client?s DOD are identified Effect: ? Claims paid on behalf of deceased clients may go undetected. ? Potential questioned costs and disallowances Recommendation: We recommend that OFI enhance existing procedures to identify and correct DOD information when a known DOD is not initially provided. We further recommend that OFI implement oversight to ensure DOD information is accurately entered into ACES. We recommend that OMS enhance existing procedures to ensure that all claims with service dates after a client?s DOD are identified for review to detect any claims that are not allowable. Corrective Action Plan: See F-31 Management?s Response: The Department partially agrees with this finding. OFI acknowledges a data mismatch of five clients. Edits were made to the standard operating procedures governing the date of death procedures in November of 2021 including articulation of responsible parties and expected timelines for processing. Additionally, OFI continues to process weekly IEVS discrepancy reports based on death data from our federal partners as well as conduct monthly crosswalks with Maine?s CDC Office of Vital Statistics. OMS worked with OSA to review the original population of over 600 claims that were made after a client?s DOD. The original claims identified by OSA were reduced to 110. OMS did not have sufficient time to perform a more detailed analysis into the underlying reasons that these 110 claims were made to clients after DOD. OMS will complete the in-depth review and then consider if additional updates to procedures are necessary. Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104 Auditor?s Concluding Remarks: OFI indicates they have enhanced their procedures as of November 2021, implying these will prevent the types of errors identified in the finding. However, of the three clients for whom no DOD was entered into ACES, two occurred after OFI?s November 2021 standard operating procedures update. Though OSA initially identified approximately 600 claims paid after a client?s DOD that were not identified through OMS? procedures, OMS was able to provide additional documentation to remove approximately 500 claims from OSA?s list of exceptions. For the remaining 110 claims, OMS could not provide documentation to support that these claims were identified through OMS? procedures. The finding remains as stated. (State Number: 22-1106-11)
(2022-093) Title: Internal control over expenditure processing needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Security and Employment Service Center Federal Agency: U.S. Department of Homeland Security Assistance Listing Title: Homeland Security Grant Program Emergency Management Performance Grant Assistance Listing Number: 97.067; 97.042 Federal Award Identification Number: EMW2018SS00049S01; EMB2019EP00004 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned costs Known Questioned Costs: $59,759 under ALN 97.067, Homeland Security Grant Program Likely Questioned Costs: Likely questioned costs cannot be determined due to the variety of expenditures within the population. The projection of questioned costs utilizing the error rate related to the known exception and amounts tested would not produce a reasonable estimate of likely questioned costs. Criteria: 2 CFR 200.303; 2 CFR 200.403 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. Condition: The Security and Employment Service Center is responsible for processing invoices for multiple State agencies. The Office of the State Auditor (OSA) tested a sample of 60 Federal expenditure transactions to ensure that the expenditure was accurately recorded. OSA found that one quarterly lease payment totaling $59,759 was processed incorrectly. The coding on the invoice indicated that the expenditure should be split coded utilizing Federal and State funds, and that the Federal share should be paid utilizing funds from the Emergency Management Performance Grant. Instead, Homeland Security Grant Program funds were erroneously charged. OSA selected a non-statistical random sample. Context: In fiscal year 2022, the Department reported expenditures of $2.6 million for the Emergency Management Performance Grant and $4.7 million for the Homeland Security Grant Program. Cause: Lack of supervisory oversight Effect: ? Questioned costs and potential disallowances ? Inaccurate reporting of expenditures Recommendation: We recommend that the Department improve oversight procedures to ensure staff are properly recording expenditures in the correct accounts with the proper utilization of grant funds. Corrective Action Plan: See F-33 Management?s Response: The Department agrees with this finding. The Security and Employment Service Center will continue to provide training for data entry and invoice approval processes. Contact: Marilyn Leimbach, Director, Service and Employment Service Center, DFPS, DAFS, 207-248-2556 (State Number: 22-1000-01
(2022-093) Title: Internal control over expenditure processing needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Security and Employment Service Center Federal Agency: U.S. Department of Homeland Security Assistance Listing Title: Homeland Security Grant Program Emergency Management Performance Grant Assistance Listing Number: 97.067; 97.042 Federal Award Identification Number: EMW2018SS00049S01; EMB2019EP00004 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned costs Known Questioned Costs: $59,759 under ALN 97.067, Homeland Security Grant Program Likely Questioned Costs: Likely questioned costs cannot be determined due to the variety of expenditures within the population. The projection of questioned costs utilizing the error rate related to the known exception and amounts tested would not produce a reasonable estimate of likely questioned costs. Criteria: 2 CFR 200.303; 2 CFR 200.403 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. Condition: The Security and Employment Service Center is responsible for processing invoices for multiple State agencies. The Office of the State Auditor (OSA) tested a sample of 60 Federal expenditure transactions to ensure that the expenditure was accurately recorded. OSA found that one quarterly lease payment totaling $59,759 was processed incorrectly. The coding on the invoice indicated that the expenditure should be split coded utilizing Federal and State funds, and that the Federal share should be paid utilizing funds from the Emergency Management Performance Grant. Instead, Homeland Security Grant Program funds were erroneously charged. OSA selected a non-statistical random sample. Context: In fiscal year 2022, the Department reported expenditures of $2.6 million for the Emergency Management Performance Grant and $4.7 million for the Homeland Security Grant Program. Cause: Lack of supervisory oversight Effect: ? Questioned costs and potential disallowances ? Inaccurate reporting of expenditures Recommendation: We recommend that the Department improve oversight procedures to ensure staff are properly recording expenditures in the correct accounts with the proper utilization of grant funds. Corrective Action Plan: See F-33 Management?s Response: The Department agrees with this finding. The Security and Employment Service Center will continue to provide training for data entry and invoice approval processes. Contact: Marilyn Leimbach, Director, Service and Employment Service Center, DFPS, DAFS, 207-248-2556 (State Number: 22-1000-01
FINDING 2022-004 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not developed at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The School Corporation approved a salary schedule for bus drivers which included additional compensation based on miles driven for bus drivers who transported preschool students. Each pay period, the Director of Transportation calculated a bus driver's daily pay by adding the approved hourly wage rate times hours worked to the per mile rate times miles driven for the preschool route, if applicable. The School Corporation provided approved timesheets for the bus drivers selected for testing; however, the calculation of the daily pay calculation was not provided for audit. The bus drivers' payroll of $113,486 charged to the Title I grants during the audit period were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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: . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs were $113,486 as identified in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not developed at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The School Corporation approved a salary schedule for bus drivers which included additional compensation based on miles driven for bus drivers who transported preschool students. Each pay period, the Director of Transportation calculated a bus driver's daily pay by adding the approved hourly wage rate times hours worked to the per mile rate times miles driven for the preschool route, if applicable. The School Corporation provided approved timesheets for the bus drivers selected for testing; however, the calculation of the daily pay calculation was not provided for audit. The bus drivers' payroll of $113,486 charged to the Title I grants during the audit period were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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: . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs were $113,486 as identified in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-007 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. The COVID-19 - Education Stabilization Fund established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act was for the purpose of preventing, preparing for, and responding to Novel Coronavirus (COVID-19). The School Corporation paid Classified Staff and all Administrators and Directors (Superintendent of Schools excluded) School Board approved stipends on December 11, 2020, from the program. The across-the-board stipends were paid without justification or documentation that provided for additional duties or work performed on which to base the stipends. The total amount of stipends paid, $178,800, were considered questioned costs. The lack of internal controls and noncompliance were isolated to the stipend payments made from S425D200013. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. . . . (g) Be adequately documented. . . ." 2 CFR 200.404 states in part: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. . . ." Public Law 116-136, Section 18003(d) states: "Uses of Funds. - A local educational agency that receives funds under this title may use funds for any of the following: (1) Any activity authorized by the ESEA of 1965, including the Native Hawaiian Education Act and the Alaska Native Educational Equity, Support, and Assistance Act (20 U.S.C. 6301 et seq.), the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.) ('IDEA'), the Adult Education and Family Literacy Act (20 U.S.C. 1400 et seq.), the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.) ('the Perkins Act'), or subtitle B of title VII of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11431 et seq.). (2) Coordination of preparedness and response efforts of local educational agencies with State, local, Tribal, and territorial public health departments, and other relevant agencies, to improve coordinated responses among such entities to prevent, prepare for, and respond to coronavirus. (3) Providing principals and others school leaders with the resources necessary to address the needs of their individual schools. (4) Activities to address the unique needs of low-income children or students, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth, including how outreach and service delivery will meet the needs of each population. (5) Developing and implementing procedures and systems to improve the preparedness and response efforts of local educational agencies. (6) Training and professional development for staff of the local educational agency on sanitation and minimizing the spread of infectious diseases. (7) Purchasing supplies to sanitize and clean the facilities of a local educational agency, including buildings operated by such agency. (8) Planning for and coordinating during long-term closures, including for how to provide meals to eligible students, how to provide technology for online learning to all students, how to provide guidance for carrying out requirements under the Individuals with Disabilities Education Act (20 U.S.C. 1401 et seq.) and how to ensure other educational services can continue to be provided consistent with all Federal, State, and local requirements. (9) Purchasing educational technology (including hardware, software, and connectivity) for students who are served by the local educational agency that aids in regular and substantive educational interaction between students and their classroom instructors, including low-income students and students with disabilities, which may include assistive technology or adaptive equipment. (10) Providing mental health services and supports. (11) Planning and implementing activities related to summer learning and supplemental afterschool programs, including providing classroom instruction or online learning during the summer months and addressing the needs of low-income students, students with disabilities, English learners, migrant students, students experiencing homelessness, and children in foster care. (12) Other activities that are necessary to maintain the operation of and continuity of services in local educational H. R. 748?287 agencies and continuing to employ existing staff of the local educational agency." Cause Management had not established a system of internal controls that would have ensured compliance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs in the amount of $178,800 were identified and noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-007 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. The COVID-19 - Education Stabilization Fund established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act was for the purpose of preventing, preparing for, and responding to Novel Coronavirus (COVID-19). The School Corporation paid Classified Staff and all Administrators and Directors (Superintendent of Schools excluded) School Board approved stipends on December 11, 2020, from the program. The across-the-board stipends were paid without justification or documentation that provided for additional duties or work performed on which to base the stipends. The total amount of stipends paid, $178,800, were considered questioned costs. The lack of internal controls and noncompliance were isolated to the stipend payments made from S425D200013. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. . . . (g) Be adequately documented. . . ." 2 CFR 200.404 states in part: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. . . ." Public Law 116-136, Section 18003(d) states: "Uses of Funds. - A local educational agency that receives funds under this title may use funds for any of the following: (1) Any activity authorized by the ESEA of 1965, including the Native Hawaiian Education Act and the Alaska Native Educational Equity, Support, and Assistance Act (20 U.S.C. 6301 et seq.), the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.) ('IDEA'), the Adult Education and Family Literacy Act (20 U.S.C. 1400 et seq.), the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.) ('the Perkins Act'), or subtitle B of title VII of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11431 et seq.). (2) Coordination of preparedness and response efforts of local educational agencies with State, local, Tribal, and territorial public health departments, and other relevant agencies, to improve coordinated responses among such entities to prevent, prepare for, and respond to coronavirus. (3) Providing principals and others school leaders with the resources necessary to address the needs of their individual schools. (4) Activities to address the unique needs of low-income children or students, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth, including how outreach and service delivery will meet the needs of each population. (5) Developing and implementing procedures and systems to improve the preparedness and response efforts of local educational agencies. (6) Training and professional development for staff of the local educational agency on sanitation and minimizing the spread of infectious diseases. (7) Purchasing supplies to sanitize and clean the facilities of a local educational agency, including buildings operated by such agency. (8) Planning for and coordinating during long-term closures, including for how to provide meals to eligible students, how to provide technology for online learning to all students, how to provide guidance for carrying out requirements under the Individuals with Disabilities Education Act (20 U.S.C. 1401 et seq.) and how to ensure other educational services can continue to be provided consistent with all Federal, State, and local requirements. (9) Purchasing educational technology (including hardware, software, and connectivity) for students who are served by the local educational agency that aids in regular and substantive educational interaction between students and their classroom instructors, including low-income students and students with disabilities, which may include assistive technology or adaptive equipment. (10) Providing mental health services and supports. (11) Planning and implementing activities related to summer learning and supplemental afterschool programs, including providing classroom instruction or online learning during the summer months and addressing the needs of low-income students, students with disabilities, English learners, migrant students, students experiencing homelessness, and children in foster care. (12) Other activities that are necessary to maintain the operation of and continuity of services in local educational H. R. 748?287 agencies and continuing to employ existing staff of the local educational agency." Cause Management had not established a system of internal controls that would have ensured compliance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs in the amount of $178,800 were identified and noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Federal Communications Commission AL Number and Title: COVID-19 ? 32.009 ? Emergency Connectivity Fund Federal Award Number: ECF202105452 (Year: 2022) Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $26,460 Description: A review of expenditures charged to the Emergency Connectivity Fund and Elementary and Secondary School Emergency Relief Fund programs revealed that the School District?s internal control procedures were not operating appropriately to ensure that expenditures were allowable. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. Additionally, Congress established the Emergency Connectivity Fund (ECF) through the American Rescue Plan Act and appropriated $7.2 billion for the purchase of eligible equipment, advanced telecommunications, and information services for use by students, school staff, and library patrons at locations that include locations other than at a school or library. The ECF program provides funding to meet the remote learning needs of students, school staff, and library patrons who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning during the COVID-19 emergency period. ECF funds totaling $956,562 and ESSER funds totaling $10,418,254 were expended and reported on the Baldwin County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?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? (f) Not be included as a cost or used to meet the cost sharing or matching requirements of any other federally-financed program in either the current or a prior period, (g) Be adequately documented?? Furthermore, provisions included in Title 47 CFR Section 54.1712 ? Duplicate Support state that ?Entities participating in the Emergency Connectivity Fund may not seek Emergency Connectivity Fund support or reimbursement for eligible equipment or services that have been purchased with or reimbursed in full from other Federal pandemic-relief funding, targeted state funding, other external sources of targeted funding or targeted gifts, or eligible for discounts from the schools and libraries universal service support mechanism or other universal service support mechanisms.? Condition: All expenditures related to the ECF program were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that expenditures for wireless service totaling $26,460 were approved through the budget process and recorded under both the ECF program and the ESSER program. Upon further review, it was noted that reimbursement was requested and received through the ESSER program during fiscal year 2022 and the ECF program after year-end. Additionally, a refund of such funding had not been processed for either of the programs as of the end of audit fieldwork. Therefore, duplicate federal funding was received for the same expenditure. Questioned Costs: Known questioned costs of $26,460 were identified for expenditures that were reimbursed through both the ECF and ESSER programs. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing these deficiencies with management, they stated that these expenditures were allowable and reimbursed through the ESSER program during the fiscal year. However, the director over ECF funding was unaware that these funds had already been requested through ESSER funding and requested and received reimbursement through the ECF program, as well. Effect: The School District is not in compliance with the Uniform Guidance, the U.S. Federal Communications Commission guidance related to the ECF program, and the U.S. Department of Education (ED) guidance related to the ESSER program. Failure to ensure that appropriate controls exist to support the allowability of payments from federal programs may expose the School District to unnecessary financial strains and shortages as the grantor and/or pass-through entity may require the School District to return funds associated with the unallowable expenditures. Recommendation: The School District should review current internal control procedures related to federal program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that duplicate reimbursements are not sought from multiple federal programs for the same expenditure. Additionally, the School District should initiate a refund in the amount of $26,460 to either the ECF or ESSER program. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Federal Communications Commission AL Number and Title: COVID-19 ? 32.009 ? Emergency Connectivity Fund Federal Award Number: ECF202105452 (Year: 2022) Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $26,460 Description: A review of expenditures charged to the Emergency Connectivity Fund and Elementary and Secondary School Emergency Relief Fund programs revealed that the School District?s internal control procedures were not operating appropriately to ensure that expenditures were allowable. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. Additionally, Congress established the Emergency Connectivity Fund (ECF) through the American Rescue Plan Act and appropriated $7.2 billion for the purchase of eligible equipment, advanced telecommunications, and information services for use by students, school staff, and library patrons at locations that include locations other than at a school or library. The ECF program provides funding to meet the remote learning needs of students, school staff, and library patrons who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning during the COVID-19 emergency period. ECF funds totaling $956,562 and ESSER funds totaling $10,418,254 were expended and reported on the Baldwin County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?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? (f) Not be included as a cost or used to meet the cost sharing or matching requirements of any other federally-financed program in either the current or a prior period, (g) Be adequately documented?? Furthermore, provisions included in Title 47 CFR Section 54.1712 ? Duplicate Support state that ?Entities participating in the Emergency Connectivity Fund may not seek Emergency Connectivity Fund support or reimbursement for eligible equipment or services that have been purchased with or reimbursed in full from other Federal pandemic-relief funding, targeted state funding, other external sources of targeted funding or targeted gifts, or eligible for discounts from the schools and libraries universal service support mechanism or other universal service support mechanisms.? Condition: All expenditures related to the ECF program were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that expenditures for wireless service totaling $26,460 were approved through the budget process and recorded under both the ECF program and the ESSER program. Upon further review, it was noted that reimbursement was requested and received through the ESSER program during fiscal year 2022 and the ECF program after year-end. Additionally, a refund of such funding had not been processed for either of the programs as of the end of audit fieldwork. Therefore, duplicate federal funding was received for the same expenditure. Questioned Costs: Known questioned costs of $26,460 were identified for expenditures that were reimbursed through both the ECF and ESSER programs. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing these deficiencies with management, they stated that these expenditures were allowable and reimbursed through the ESSER program during the fiscal year. However, the director over ECF funding was unaware that these funds had already been requested through ESSER funding and requested and received reimbursement through the ECF program, as well. Effect: The School District is not in compliance with the Uniform Guidance, the U.S. Federal Communications Commission guidance related to the ECF program, and the U.S. Department of Education (ED) guidance related to the ESSER program. Failure to ensure that appropriate controls exist to support the allowability of payments from federal programs may expose the School District to unnecessary financial strains and shortages as the grantor and/or pass-through entity may require the School District to return funds associated with the unallowable expenditures. Recommendation: The School District should review current internal control procedures related to federal program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that duplicate reimbursements are not sought from multiple federal programs for the same expenditure. Additionally, the School District should initiate a refund in the amount of $26,460 to either the ECF or ESSER program. Views of Responsible Officials: We concur with this finding.
Cluster name: WIOA Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award number and year: DI21-002285 A1, April 1, 2020 through June 30, 2022 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Compliance requirements: Activities allowed or unallowed and allowable costs/cost principles Questioned costs: $25,761 Condition?Contrary to federal regulations and grantor and County policies and procedures, the County?s Workforce Innovation and Opportunity Act (WIOA) Department (Department) spent $25,761 of WIOA program monies for unallowable purposes. Specifically, we found that the Department paid for unallowable purchases and invoices of a third-party nonprofit organization that the Department?s former director helped create while employed by the County and that the County had contracted with to increase the capacity of the local workforce system. Despite the contract between the County and the nonprofit organization not authorizing the nonprofit organization to obligate the County for its expenses or enter into agreements on the County?s behalf, both occurred. The $25,761 of unallowable purchases included: ? $25,431 for the nonprofit organization?s leased building ($18,700), electronic data services ($3,545), utilities invoices ($2,951), and a storage unit ($235). ? $260 for purchases made using County purchasing cards, consisting of gift cards, food and beverages, and board games, $245 of which were for the nonprofit organization?s program outreach activities but not allowed by the program?s requirements or the County?s purchasing card policies and procedures. ? $70 for other purchases made using County purchasing cards that the Department charged to the program but did not have documentation to support their allowability. Effect?The Department received federal reimbursement for $25,761 in unallowable charges it made to the program that it was not eligible to receive and, therefore, is at risk of having to return these monies to the pass-through grantor.1 Further, the Department made $25,761 of grant monies unavailable for their intended purpose. Cause?The County?s lack of internal controls and former WIOA director?s inadequate oversight of the WIOA program contributed to the Department?s spending of WIOA program monies for unallowable purposes. Specifically, the County?s policies and procedures did not include detailed instructions for departments to follow for initiating new vendors with the County and processing vendor invoices using its established accounts payable process through the Finance Department. This, combined with the former WIOA director?s comingling of the nonprofit organization?s financial activities, contributed to the Department directly paying for purchases and invoices belonging to the nonprofit organization despite them not being invoiced to or addressed to the County. In addition, Department staff reported that they believed the nonprofit organization?s purchases and invoices were allowable for the County to pay for and charge to the program; however, they did not maintain documentation to support this justification. Further, the former WIOA director did not provide proper oversight and ensure that the Department followed federal regulations and grantor and County policies and procedures to incur and pay for or reimburse only authorized federal program costs and to maintain documentation to support that the County?s program costs were allowable. Criteria?Federal regulations require the Department to reimburse only those federal program costs that are necessary and reasonable for the federal award?s performance, adequately documented, and allowed by the federal program?s requirements (2 CFR 200.403). The grantor and County policies and procedures contain similar requirements and also require the Department to retain records and other documentation supporting the County?s administration of federal awards for at least 3 years (Navajo County. [2019]. Fiscal Policy Manual, Section 4.4 ).2 Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR ?200.303). Recommendations?The County should: 1. Improve its accounts payable policies and procedures to include detailed instructions for departments to follow for initiating new vendors with the County and processing vendor invoices using its established accounts payable process through the Finance Department. 2. Follow federal regulations and grantor and County policies and procedures requiring it to: a. Incur and pay for or reimburse only authorized federal program costs that are necessary and reasonable for the federal award?s performance, adequately documented, and allowed by the federal program?s requirements. b. Maintain documentation to support that federal program costs it incurs and pays for or reimburses are allowable. 3. Verify all invoices belong to and are addressed to the County prior to payment. 4. Ensure that the Department establishes clear contractual arrangements with entities the Department plans to use to help administer the federal program that comply with County policies and procedures and the program?s requirements. 5. Coordinate with the pass-through grantor to adjust future federal reimbursements requests or repay the pass-through grantor for the unallowable costs the Department charged to the program. The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Arizona Department of Economic Security. (n.d.). Workforce Innovation and Opportunity Act Policy Manual. Retrieved on 3/1/2023 from https://des.az.gov/services/employment/workforce-innovation-and-opportunity-act-wioa/title-i-b-policy-and-procedure 2 Federal Uniform Guidance requires the pass-through entities to follow up, issue management decisions, and resolve subrecipients single audit findings as part of their monitoring responsibilities for ensuring that subawards are used for authorized purposes, in compliance with federal laws and regulations and the award terms, and that the program?s performance goals are achieved (2 CFR ?200.332[d]).
Cluster name: WIOA Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award number and year: DI21-002285 A1, April 1, 2020 through June 30, 2022 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Compliance requirements: Activities allowed or unallowed and allowable costs/cost principles Questioned costs: $25,761 Condition?Contrary to federal regulations and grantor and County policies and procedures, the County?s Workforce Innovation and Opportunity Act (WIOA) Department (Department) spent $25,761 of WIOA program monies for unallowable purposes. Specifically, we found that the Department paid for unallowable purchases and invoices of a third-party nonprofit organization that the Department?s former director helped create while employed by the County and that the County had contracted with to increase the capacity of the local workforce system. Despite the contract between the County and the nonprofit organization not authorizing the nonprofit organization to obligate the County for its expenses or enter into agreements on the County?s behalf, both occurred. The $25,761 of unallowable purchases included: ? $25,431 for the nonprofit organization?s leased building ($18,700), electronic data services ($3,545), utilities invoices ($2,951), and a storage unit ($235). ? $260 for purchases made using County purchasing cards, consisting of gift cards, food and beverages, and board games, $245 of which were for the nonprofit organization?s program outreach activities but not allowed by the program?s requirements or the County?s purchasing card policies and procedures. ? $70 for other purchases made using County purchasing cards that the Department charged to the program but did not have documentation to support their allowability. Effect?The Department received federal reimbursement for $25,761 in unallowable charges it made to the program that it was not eligible to receive and, therefore, is at risk of having to return these monies to the pass-through grantor.1 Further, the Department made $25,761 of grant monies unavailable for their intended purpose. Cause?The County?s lack of internal controls and former WIOA director?s inadequate oversight of the WIOA program contributed to the Department?s spending of WIOA program monies for unallowable purposes. Specifically, the County?s policies and procedures did not include detailed instructions for departments to follow for initiating new vendors with the County and processing vendor invoices using its established accounts payable process through the Finance Department. This, combined with the former WIOA director?s comingling of the nonprofit organization?s financial activities, contributed to the Department directly paying for purchases and invoices belonging to the nonprofit organization despite them not being invoiced to or addressed to the County. In addition, Department staff reported that they believed the nonprofit organization?s purchases and invoices were allowable for the County to pay for and charge to the program; however, they did not maintain documentation to support this justification. Further, the former WIOA director did not provide proper oversight and ensure that the Department followed federal regulations and grantor and County policies and procedures to incur and pay for or reimburse only authorized federal program costs and to maintain documentation to support that the County?s program costs were allowable. Criteria?Federal regulations require the Department to reimburse only those federal program costs that are necessary and reasonable for the federal award?s performance, adequately documented, and allowed by the federal program?s requirements (2 CFR 200.403). The grantor and County policies and procedures contain similar requirements and also require the Department to retain records and other documentation supporting the County?s administration of federal awards for at least 3 years (Navajo County. [2019]. Fiscal Policy Manual, Section 4.4 ).2 Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR ?200.303). Recommendations?The County should: 1. Improve its accounts payable policies and procedures to include detailed instructions for departments to follow for initiating new vendors with the County and processing vendor invoices using its established accounts payable process through the Finance Department. 2. Follow federal regulations and grantor and County policies and procedures requiring it to: a. Incur and pay for or reimburse only authorized federal program costs that are necessary and reasonable for the federal award?s performance, adequately documented, and allowed by the federal program?s requirements. b. Maintain documentation to support that federal program costs it incurs and pays for or reimburses are allowable. 3. Verify all invoices belong to and are addressed to the County prior to payment. 4. Ensure that the Department establishes clear contractual arrangements with entities the Department plans to use to help administer the federal program that comply with County policies and procedures and the program?s requirements. 5. Coordinate with the pass-through grantor to adjust future federal reimbursements requests or repay the pass-through grantor for the unallowable costs the Department charged to the program. The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Arizona Department of Economic Security. (n.d.). Workforce Innovation and Opportunity Act Policy Manual. Retrieved on 3/1/2023 from https://des.az.gov/services/employment/workforce-innovation-and-opportunity-act-wioa/title-i-b-policy-and-procedure 2 Federal Uniform Guidance requires the pass-through entities to follow up, issue management decisions, and resolve subrecipients single audit findings as part of their monitoring responsibilities for ensuring that subawards are used for authorized purposes, in compliance with federal laws and regulations and the award terms, and that the program?s performance goals are achieved (2 CFR ?200.332[d]).
Cluster name: WIOA Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award number and year: DI21-002285 A1, April 1, 2020 through June 30, 2022 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Compliance requirements: Activities allowed or unallowed and allowable costs/cost principles Questioned costs: $25,761 Condition?Contrary to federal regulations and grantor and County policies and procedures, the County?s Workforce Innovation and Opportunity Act (WIOA) Department (Department) spent $25,761 of WIOA program monies for unallowable purposes. Specifically, we found that the Department paid for unallowable purchases and invoices of a third-party nonprofit organization that the Department?s former director helped create while employed by the County and that the County had contracted with to increase the capacity of the local workforce system. Despite the contract between the County and the nonprofit organization not authorizing the nonprofit organization to obligate the County for its expenses or enter into agreements on the County?s behalf, both occurred. The $25,761 of unallowable purchases included: ? $25,431 for the nonprofit organization?s leased building ($18,700), electronic data services ($3,545), utilities invoices ($2,951), and a storage unit ($235). ? $260 for purchases made using County purchasing cards, consisting of gift cards, food and beverages, and board games, $245 of which were for the nonprofit organization?s program outreach activities but not allowed by the program?s requirements or the County?s purchasing card policies and procedures. ? $70 for other purchases made using County purchasing cards that the Department charged to the program but did not have documentation to support their allowability. Effect?The Department received federal reimbursement for $25,761 in unallowable charges it made to the program that it was not eligible to receive and, therefore, is at risk of having to return these monies to the pass-through grantor.1 Further, the Department made $25,761 of grant monies unavailable for their intended purpose. Cause?The County?s lack of internal controls and former WIOA director?s inadequate oversight of the WIOA program contributed to the Department?s spending of WIOA program monies for unallowable purposes. Specifically, the County?s policies and procedures did not include detailed instructions for departments to follow for initiating new vendors with the County and processing vendor invoices using its established accounts payable process through the Finance Department. This, combined with the former WIOA director?s comingling of the nonprofit organization?s financial activities, contributed to the Department directly paying for purchases and invoices belonging to the nonprofit organization despite them not being invoiced to or addressed to the County. In addition, Department staff reported that they believed the nonprofit organization?s purchases and invoices were allowable for the County to pay for and charge to the program; however, they did not maintain documentation to support this justification. Further, the former WIOA director did not provide proper oversight and ensure that the Department followed federal regulations and grantor and County policies and procedures to incur and pay for or reimburse only authorized federal program costs and to maintain documentation to support that the County?s program costs were allowable. Criteria?Federal regulations require the Department to reimburse only those federal program costs that are necessary and reasonable for the federal award?s performance, adequately documented, and allowed by the federal program?s requirements (2 CFR 200.403). The grantor and County policies and procedures contain similar requirements and also require the Department to retain records and other documentation supporting the County?s administration of federal awards for at least 3 years (Navajo County. [2019]. Fiscal Policy Manual, Section 4.4 ).2 Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR ?200.303). Recommendations?The County should: 1. Improve its accounts payable policies and procedures to include detailed instructions for departments to follow for initiating new vendors with the County and processing vendor invoices using its established accounts payable process through the Finance Department. 2. Follow federal regulations and grantor and County policies and procedures requiring it to: a. Incur and pay for or reimburse only authorized federal program costs that are necessary and reasonable for the federal award?s performance, adequately documented, and allowed by the federal program?s requirements. b. Maintain documentation to support that federal program costs it incurs and pays for or reimburses are allowable. 3. Verify all invoices belong to and are addressed to the County prior to payment. 4. Ensure that the Department establishes clear contractual arrangements with entities the Department plans to use to help administer the federal program that comply with County policies and procedures and the program?s requirements. 5. Coordinate with the pass-through grantor to adjust future federal reimbursements requests or repay the pass-through grantor for the unallowable costs the Department charged to the program. The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Arizona Department of Economic Security. (n.d.). Workforce Innovation and Opportunity Act Policy Manual. Retrieved on 3/1/2023 from https://des.az.gov/services/employment/workforce-innovation-and-opportunity-act-wioa/title-i-b-policy-and-procedure 2 Federal Uniform Guidance requires the pass-through entities to follow up, issue management decisions, and resolve subrecipients single audit findings as part of their monitoring responsibilities for ensuring that subawards are used for authorized purposes, in compliance with federal laws and regulations and the award terms, and that the program?s performance goals are achieved (2 CFR ?200.332[d]).
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Number: 20611-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 grant award could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 grant application was $10,523. Identification as a repeat finding, if applicable: Yes. Identified as Finding 2020-002 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Number: 20611-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 grant award could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 grant application was $10,523. Identification as a repeat finding, if applicable: Yes. Identified as Finding 2020-002 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Number: 20611-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 grant award could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 grant application was $10,523. Identification as a repeat finding, if applicable: Yes. Identified as Finding 2020-002 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Number: 20611-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 grant award could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 grant application was $10,523. Identification as a repeat finding, if applicable: Yes. Identified as Finding 2020-002 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Number: 20611-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 grant award could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 grant application was $10,523. Identification as a repeat finding, if applicable: Yes. Identified as Finding 2020-002 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Brookwood School District 167 07-016-1670-02 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2022 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER:14 2022 - 002 2. THIS FINDING IS: x New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: COVID-19 - Elementary and Secondary School Emergency Relief E2 - 2021 4. Project No.: 21-4998-E2 5. AL No.: 84.425D 6. Passed Through: Illinois State Board of Education 7. Federal Agency: U.S. Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) According to 2 CFR 200.403(g) allowable costs must "be adequately documented." 9. Condition15 The District's expenditure population was less than amounts claimed by $5,617. The District was unable to identify and support expenditures for this difference. 10. Questioned Costs16 $5,617 11. Context17 Finding is an isolated incident and resulted from reconciling the District's expenditure population to the SEFA. No exceptions were noted during activities allowed or unallowed and allowable costs testing for the amounts that were sampled during our audit procedures. 12. Effect The District received funding in excess of the expenditures incurred. 13. Cause The District's controls did not prevent or detect unsupported amounts from being reported and submitted for reimbursement. 14. Recommendation We recommend that the District implement additional review procedures prior to submitting request for reimbursement of grant expenditures incurred and ensure that amounts claimed are supported by allowable transactions. 15. Management's response18 The District will implement additional review procedures to ensure that expenditure claims submitted for reimbursement agree to supported transactions within the accounting system for allowable costs under the award. 14 See footnote 11. 15 Include facts that support the deficiency identified on the audit finding (?200.516 (b)(3)). 16 Identify questioned costs as required by ?200.516 (a)(3 - 4). 17 See footnote 12. 18 To the extent practical, indicate when management does not agree with the finding, questioned cost, or both.
2022-002 Allowable Costs ? Material Weakness Federal Program ? Victims of Crimes Act (VOCA) CFDA 16-575 Pass-through Entity - State of Florida Office of the Attorney General Federal Agency - Department of Justice Criteria: 2 CFR 200.303 states a non-Federal entity must establish and maintain effective internal controls 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. VOCA funds provide reimbursement assistance to Hibiscus for services provided to the victims of crimes that are not otherwise paid. 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. Condition: Auditor tested 4 of the 12 months of services provided and noted no controls related to the verification of the employees time spent working under this grant. Amounts billed were directly related to the budgeted amounts. Auditor reviewed eCR billing system and timesheets maintained by the providers for billing and payroll processes and noted no controls were implemented to allow for quantification of the time spent with VOCA clients. The program director was listed as the provider in eCR in many instances when she was not, and time sheets are not maintained to allow for proper breakdown of providers time spent on each client. This condition could lead to a potential misstatement of the financial statements. Questioned Costs: Likely estimated questioned costs from $80,000-$166,000. Cause: During the preliminary review of the VOCA grant, auditor noted VOCA had changed the way reimbursements were paid; in prior years VOCA disbursed grant funds based on a fee for service, and during the current audit period changed to grant funds being disbursed based on actual salaries paid. Management did not have a full understanding of the change. Effect: Potential unallowable costs. Recommendation: We recommend Hibiscus implement and monitor the time value related to the services provided under the VOCA grant. Additionally, the appropriate provider should be selected in eCR and appropriate detailed time sheets maintained for the VOCA providers. Billings should be then created based on actual time spent of the providers working with VOCA clients. Management Response: Hibiscus is using eCR data verifying time value related services based on VOCA allowable cost. In addition, updates were made on time sheet for providers detailing actual percentage of services. Cost reimbursements submitted were reviewed, verified, and approved by VOCA.