Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Research and Development Cluster – Education Innovation and Research (formerly Investing in Innovation (i3) Fund – Validation Grants) Assistance Listing No. 84.411A Criteria: 2 CFR 200.332 notes, “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; …” Condition: For both subawards selected for testing, the identification of the contact information for the awarding agency was incorrect. The contact information was Education Analytics, Inc., the Organization’s grantor, but should have been Future Forward, Inc. Further, one of the two subawards selected for testing had information missing from the subaward including all requirements for the award to be used in accordance with Federal statutes, regulations and terms and conditions of the Federal award. We consider this condition to be an instance of noncompliance relating to the Subrecipient Monitoring compliance requirement. Statistical sampling was not used in making sample selections. Questioned Costs: N/A Cause and Effect: Without communication of the required information, subrecipients may overspend award amounts or incur unallowable expenses towards the grant as well as report the incorrect grantor on their schedule of expenditures of federal awards. Recommendation: We recommend the Organization evaluates policies and procedures to ensure all required information is communicated with the subrecipient. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.
FINDING 2024-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County received an allocation of the COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) from the U.S. Department of the Treasury to support its response and recovery from the novel coronavirus. A portion of the County's allocation was then used to subaward funds to another entity (i.e., the subrecipient) to carry out an eligible use. The subaward was provided to the subrecipient via two different subaward agreements. Both subaward agreements were selected for testing. The County, as the pass-through entity, is to clearly identify the subaward and the terms and conditions of the award in the agreement with the subrecipient. During review of the two subaward agreements, it was determined that the Assistance Listings Number (ALN) and Federal Award Identification Number (FAIN) were not included as required. Additionally, the County as the pass-through entity, is to monitor the activities of the subrecipient to ensure that the subaward is used for authorized purposes in compliance with federal statutes, regulations, and terms and conditions of the subaward and that performance goals are achieved. Part of the monitoring requirements include verifying the subrecipient received an audit as required so as to be able to issue management decisions on any findings, as applicable. The County did not have a process in place to obtain and review audits received by the subrecipient. Therefore, the County would not have been able to issue management decisions or ensure timely and appropriate action by the subrecipient. The lack of internal controls and noncompliance were systemic 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 200.332 states in part: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); INDIANA STATE BOARD OF ACCOUNTS 14 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date . . . of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R & D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used charged) per § 200.414. . . . (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations." Cause The County did not have adequate processes or procedures in place to ensure all of the proper information about the grant was provided to the subrecipient and all required monitoring activities were being conducted. Effect Not providing award identification information to subrecipients could result in the subrecipient not properly reporting the grant on their Schedule of Expenditures of Federal Awards. Furthermore, due to the absence of policies and procedures to monitor the activities of subrecipients, subrecipients could be spending federal funds for unauthorized purposes without the County's knowledge. As such, the County cannot ensure proper accountability and compliance with the program requirements. INDIANA STATE BOARD OF ACCOUNTS 15 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County strengthen its system of internal controls to ensure that the County verifies that all subrecipients of federal awards receive an audit and that the County receives and reviews any audit reports of the subrecipients. Additionally, we recommended that the County strengthen its system of internal controls to ensure that subaward agreements include all required information that should be known to the subrecipient. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Social Services Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Organization must comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Condition: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Questioned costs: None Context: The Organization did not comply with indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance. Cause: Management was unaware of the requirement to use the actual base costs incurred multiplied by the 10% de-minimis cost rate. Instead, indirect costs were calculated based on funds received. Effect: There is a risk that indirect costs are not calculated correctly per the actual base costs incurred. Recommendation: We recommend that the Organization review and follow the indirect cost rate guidance set out at 2 CFR section 200.414 within Uniform Guidance Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Research and Development Cluster – Education Innovation and Research (formerly Investing in Innovation (i3) Fund – Validation Grants) Assistance Listing No. 84.411A Criteria: 2 CFR 200.332 notes, “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; …” Condition: For both subawards selected for testing, the identification of the contact information for the awarding agency was incorrect. The contact information was Education Analytics, Inc., the Organization’s grantor, but should have been Future Forward, Inc. Further, one of the two subawards selected for testing had information missing from the subaward including all requirements for the award to be used in accordance with Federal statutes, regulations and terms and conditions of the Federal award. We consider this condition to be an instance of noncompliance relating to the Subrecipient Monitoring compliance requirement. Statistical sampling was not used in making sample selections. Questioned Costs: N/A Cause and Effect: Without communication of the required information, subrecipients may overspend award amounts or incur unallowable expenses towards the grant as well as report the incorrect grantor on their schedule of expenditures of federal awards. Recommendation: We recommend the Organization evaluates policies and procedures to ensure all required information is communicated with the subrecipient. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.
FINDING 2024-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County received an allocation of the COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) from the U.S. Department of the Treasury to support its response and recovery from the novel coronavirus. A portion of the County's allocation was then used to subaward funds to another entity (i.e., the subrecipient) to carry out an eligible use. The subaward was provided to the subrecipient via two different subaward agreements. Both subaward agreements were selected for testing. The County, as the pass-through entity, is to clearly identify the subaward and the terms and conditions of the award in the agreement with the subrecipient. During review of the two subaward agreements, it was determined that the Assistance Listings Number (ALN) and Federal Award Identification Number (FAIN) were not included as required. Additionally, the County as the pass-through entity, is to monitor the activities of the subrecipient to ensure that the subaward is used for authorized purposes in compliance with federal statutes, regulations, and terms and conditions of the subaward and that performance goals are achieved. Part of the monitoring requirements include verifying the subrecipient received an audit as required so as to be able to issue management decisions on any findings, as applicable. The County did not have a process in place to obtain and review audits received by the subrecipient. Therefore, the County would not have been able to issue management decisions or ensure timely and appropriate action by the subrecipient. The lack of internal controls and noncompliance were systemic 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 200.332 states in part: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); INDIANA STATE BOARD OF ACCOUNTS 14 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date . . . of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R & D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used charged) per § 200.414. . . . (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations." Cause The County did not have adequate processes or procedures in place to ensure all of the proper information about the grant was provided to the subrecipient and all required monitoring activities were being conducted. Effect Not providing award identification information to subrecipients could result in the subrecipient not properly reporting the grant on their Schedule of Expenditures of Federal Awards. Furthermore, due to the absence of policies and procedures to monitor the activities of subrecipients, subrecipients could be spending federal funds for unauthorized purposes without the County's knowledge. As such, the County cannot ensure proper accountability and compliance with the program requirements. INDIANA STATE BOARD OF ACCOUNTS 15 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County strengthen its system of internal controls to ensure that the County verifies that all subrecipients of federal awards receive an audit and that the County receives and reviews any audit reports of the subrecipients. Additionally, we recommended that the County strengthen its system of internal controls to ensure that subaward agreements include all required information that should be known to the subrecipient. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Type of Finding: Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance Federal Agency: U.S. Department of Defense Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations Assistance Listing Number: 12.005 Federal Award Identification Number and Year: H79TI083313 - 2020 Award Period: September 28, 2020 through September 27, 2025 Criteria or specific requirement: Per 2 CFR 200.414(f), "recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 15% [formerly 10%] of modified total direct costs (MTDC)”. Condition: One of the Organization's requests for reimbursement requested indirect costs in excess of the 10% de minimis rate that was allowable at the time of the request. Questioned costs: $8,519 known questioned costs. Context: This was deemed to be an isolated incident as it only applied to the first drawdown request of FY24, which was the first request since the Organization transitioned from having a Federal negotiated indirect cost rate agreement (NICRA) to using the de minimis rate. Cause: Due to confusion about the timing of the transition from a NICRA to using the de minimis rate. Effect: Indirect costs in excess of the allowable indirect cost rate may be charged to the federal program. Any costs in excess of the allowable amount may be considered unallowable costs and may be required to be reimbursed to the federal program. Repeat finding: No Recommendation: CLA recommends additional internal scrutiny and controls surrounding applicable compliance requirements when there is a change in policies and procedures, such as the change in effective indirect cost rate. Views of responsible officials: There is no disagreement with the audit finding.
Federal Program/Award Identification: 11.307 COVID-19 Economic Adjustment Assistance – Economic Development Cluster Federal Award Project Number: 01-79-15100 Federal Award Project Year: 2019 Name of Federal Agency: United States Department of Commerce Name of the Applicable Pass-Through Entity: N/A Criteria: The Organization is required to comply with all terms and conditions of the grant agreement with the Revolving Loan Fund (RLF) Award granted by the U.S. Department of Commerce, Economic Development Administration (EDA). Per the Uniform Guidance (2 CFR section 200.414(f), recipients that do not have a current Federal negotiated indirect cost rate may elect to charge a de minimis rate up to 10 percent of modified total direct costs (MTDC). MTDC excludes capital expenditures including revolving loan fund capital. Condition: Management’s requests for reimbursement of indirect costs were not based on 10% of allowable modified total direct costs (MTDC). Reimbursements submitted were based on the amount included in the authorized budget from the EDA but not in accordance with the Uniform Guidance requirements for a de minimis indirect cost rate. Cause: The Organization is a small entity with limited resources to ensure all grant requirements are met. The Organization believed the calculation was allowed based on verbal conversations with the EDA representatives, but it was never documented in writing. Effect or Potential Effect: The Organization could have recognized revenue for indirect costs in excess of what was allowable under the Uniform Guidance. Questioned Costs: None Context: UHY requested that management calculate its indirect cost reimbursement under the requirements of Uniform Guidance and compare the amount paid by EDA to the calculation. The results of the calculation indicated that the Organization had not collected in excess of what it was entitled to, therefore, no questioned costs were identified. Recommendation: Management should implement a process to ensure the calculation of indirect costs charged against the EDA grant are in accordance with the Uniform Guidance and exclude any costs that are not allowed to be included in the MTDC. Views of Responsible Officials and Planned Corrective Action: See “Management’s Response and Corrective Action” plan section.
FINDING 2024-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLFRP1096 Compliance Requirement: Subrecipient Monitoring Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Subrecipients associated with the City's Non-profit, Affordable Housing, and Homeless Initiatives activities funded by the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds were required to submit reports on program activities either quarterly or monthly. The City did not have adequate internal controls in place designed to ensure that these reports were reviewed. Responsibility for reviewing these reports rested primarily with one employee. For two of three subrecipients tested, we were not able to determine that there was a second employee involved that would ensure that the reports submitted by the subrecipients were reviewed by the City. The lack of internal controls was a systemic issue 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 200.332 states: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and include the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward notification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; INDIANA STATE BOARD OF ACCOUNTS 20 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the passthrough entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. (4) (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient; which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with § 200.405(d). INDIANA STATE BOARD OF ACCOUNTS 21 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward. . . . (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program related matters; and (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations." Cause A system of internal controls to include oversite and review of the quarterly or monthly reports prepared by the subrecipients was not in place. One individual was primarily responsible for reviewing the subrecipient reports. Effect Not having procedures in place for oversite and review of the monitoring reports could lead to noncompliance with the requirements for subrecipient monitoring. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City establish a proper system of internal controls to include oversite and review to ensure that the subrecipient report reviews are reviewed/approved by a second party. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Identification of the federal program: Federal grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.048 Program name: Special Programs for the Aging, Title IV, and Title II, Discretionary Projects Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.403 costs must be allowable; 2 CFR 200.405 allocable; and indirect costs must follow 2 CFR 200.414 and Appendix IV to Part 200 (nonprofit rate determination). Entities without a current negotiated rate may elect the 10% de minimis rate (2 CFR 200.414(f)). HHS adopts these requirements at 45 CFR Part 75. Condition: The organization applied and included an expired provisional indirect cost rate in its HHS grant application and budgets. HHS approved the application and budgets; however, the rate in use was not current and the Organization had no active negotiated indirect cost rate agreement (NICRA). Cause: Lapse in monitoring and renewing the negotiated indirect cost rate. Effect or potential effect: Risk of noncompliance with cost principles and potential unallowable indirect cost recoveries if the expired rate differs from an approved current rate. Questioned costs: Undetermined. The variance between the expired rate and an allowable rate was not calculated. Recommendation: Either (1) obtain an updated NICRA from the cognizant agency (HHS) and apply it prospectively and, if required, retroactively. Implement controls to track rate expirations and require documented verification of the current rate before budget submissions and draw requests. Views of responsible officials: Management occurs with the recommendation. See Management’s Corrective Action Plan.
2024-001 [2023-001] — INDIRECT COST CALCULATIONS AND REPORTING Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Veteran Affairs Title: VA Homeless Providers Grant and Per Diem Program Assistance Listing #: 64.024 Award #: NMVI604-2909-501-PD Award Period: 10/1/2023–9/30/2024 Estimated Questioned Costs: $29,745 Statement of Condition: During our review of the NMVIC’s indirect cost (IDC) calculations, we identified discrepancies between the calculated allowable IDC and the amounts reported. The NMVIC reported total direct costs of $652,406, and after removing rent of $9,083, we calculated a Modified Total Direct Cost (MTDC) base of $643,323. However, because the NMVIC does not separately track federal versus non-federal expenditures, the accuracy of this base is uncertain. As a result, we used revenue received of $427,443 as the base for estimating allowable IDC, applying the approved indirect cost rate of 10% to arrive at an allowable IDC of $42,744. In comparison, the NMVIC’s Profit and Loss report reflected IDC of $64,830, and the SF-425 reports and client-provided calculations indicated IDC of $72,490. The variance appears to have resulted from the calculation method and inconsistent bases used by the NMVIC. Criteria: Per Uniform Guidance (2 CFR 200.403 and 2 CFR 200.414), indirect costs must be calculated based on the approved indirect cost rate agreement and applied to the appropriate base (Modified Total Direct Costs), excluding specifically unallowable costs such as rent. Additionally, the cost base should be properly supported and consistently applied. Cause: The NMVIC did not apply the approved indirect cost rate to an appropriate and supported cost base. Instead, alternative and inconsistent calculation methods were used, resulting in the overstatement of IDC. Effect: As a result of this miscalculation, the NMVIC claimed indirect costs in excess of the allowable amount under their approved rate. This raises the risk of disallowed costs and potential repayment requirements and reflects a deficiency in internal controls over financial reporting related to grant compliance. Recommendation: We recommend that the NMVIC implement procedures to ensure indirect costs are calculated accurately and consistently, in accordance with the approved indirect cost rate agreement and applicable federal regulations. Specifically, the NMVIC should establish controls to maintain a properly supported cost base that distinguishes between federal and non-federal expenditures and ensures that unallowable costs, such as rent, are excluded from the calculation. Additionally, management should reconcile indirect cost calculations across internal reports and federal filings to prevent discrepancies. View of Responsible Officials and Corrective Action Plan We acknowledge the findings and appreciate the diligence of the audit team in identifying the discrepancies in our indirect cost calculations and reporting as outlined in the draft findings. The Veterans Integration Center (VIC) is committed to maintaining the highest standards of compliance with all federal regulations and grant requirements. Corrective Action Plan 1. Training and Guidelines: All relevant staff will undergo training to understand and implement the correct procedures for calculating indirect costs. Comprehensive guidelines will be developed and disseminated to ensure consistency across all calculations and reporting. 2. Completion of SF-425 Jointly: The COO, and VIC’s contracted Accountant will confirm the accurate Modified Total Direct Costs (MTDC) which is to be used in completing the SF-425, then prepare the GPD SF-425 jointly to ensure its accuracy. 3. Review and Approval Process: An additional layer of review and approval will be established for all indirect cost calculations before they are reported. This step will involve our Chief Executive Officer (CEO) to ensure accuracy and compliance. Corrective Action Plan Timeline • Staff Training and Guidelines Distribution: Completed by Q4 2025 • Completion of SF-425 Jointly: Starting Q3 2025 with SF-425 revision • Review and Approval Process: Effective immediately, with CEO, reviews starting Q3 2025 Designation of Employee Position Responsible for Meeting Deadline The Chief Operating Officer (COO) will be responsible for the oversight and successful implementation of the corrective action plan. The COO will coordinate with the contracted internal Accountant to ensure all actions are taken within the stipulated timelines and report directly to the Chief Executive Officer on the progress.
Condition: HOPE has elected to use the de minimis indirect cost rate of 10%. While billing the federal grantor on a monthly basis, HOPE applied this 10% rate to the direct costs. However, there was no clear documentation demonstrating how this application related to the organization's actual indirect costs incurred to support the federal program, beyond simply adding the percentage to the direct cost billing. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart E, § 200.403, states that costs charged to Federal awards must be allowable, allocable, and reasonable. While § 200.414(f) permits the use of a de minimis indirect cost rate of 10%, its application should serve as a mechanism to recover a portion of the organization's actual indirect costs. Cause and effect: HOPE experienced turnover in the CFO position during the year. In prior years, HOPE recorded all costs, including indirect costs, in the cost center (“class”) assigned to the funding source. During the year under audit, this practice wasn’t consistently followed. Recommendation: I recommend that HOPE continue to use “classes” consistently in the accounting software to capture program expenditures by funding source, including indirect costs. Views of Responsible Officials: This discrepancy resulted from a lack of understanding by the CFO in processing grant related funding. Grant policies have been updated, and personnel trained to direct and understand the role of independent accounting by funding sources through class codes.
Condition: HOPE has elected to use the de minimis indirect cost rate of 10%. While billing the federal grantor on a monthly basis, HOPE applied this 10% rate to the direct costs. However, there was no clear documentation demonstrating how this application related to the organization's actual indirect costs incurred to support the federal program, beyond simply adding the percentage to the direct cost billing. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart E, § 200.403, states that costs charged to Federal awards must be allowable, allocable, and reasonable. While § 200.414(f) permits the use of a de minimis indirect cost rate of 10%, its application should serve as a mechanism to recover a portion of the organization's actual indirect costs. Cause and effect: HOPE experienced turnover in the CFO position during the year. In prior years, HOPE recorded all costs, including indirect costs, in the cost center (“class”) assigned to the funding source. During the year under audit, this practice wasn’t consistently followed. Recommendation: I recommend that HOPE continue to use “classes” consistently in the accounting software to capture program expenditures by funding source, including indirect costs. Views of Responsible Officials: This discrepancy resulted from a lack of understanding by the CFO in processing grant related funding. Grant policies have been updated, and personnel trained to direct and understand the role of independent accounting by funding sources through class codes.
Condition: HOPE has elected to use the de minimis indirect cost rate of 10%. While billing the federal grantor on a monthly basis, HOPE applied this 10% rate to the direct costs. However, there was no clear documentation demonstrating how this application related to the organization's actual indirect costs incurred to support the federal program, beyond simply adding the percentage to the direct cost billing. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart E, § 200.403, states that costs charged to Federal awards must be allowable, allocable, and reasonable. While § 200.414(f) permits the use of a de minimis indirect cost rate of 10%, its application should serve as a mechanism to recover a portion of the organization's actual indirect costs. Cause and effect: HOPE experienced turnover in the CFO position during the year. In prior years, HOPE recorded all costs, including indirect costs, in the cost center (“class”) assigned to the funding source. During the year under audit, this practice wasn’t consistently followed. Recommendation: I recommend that HOPE continue to use “classes” consistently in the accounting software to capture program expenditures by funding source, including indirect costs. Views of Responsible Officials: This discrepancy resulted from a lack of understanding by the CFO in processing grant related funding. Grant policies have been updated, and personnel trained to direct and understand the role of independent accounting by funding sources through class codes.
2024-002 – Material Weakness in Internal Control over Compliance and Noncompliance – Allowable Costs/Cost Principles: Indirect Costs Identification of federal program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Uniform Guidance 2 C.F.R. § 200.414(f): Any non-federal entity that does not have a current negotiated cost rate may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely. As described in § 200.403, costs must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both. If chosen, this methodology once elected must be used consistently for all federal awards until such time as a nonfederal entity chooses to negotiate for a rate, which the non-federal entity may apply to do at any time. Condition: As defined by the Uniform Guidance, the determination of MTDC excludes equipment and capital expenditures, in addition to various other categories of expenditures. The Council properly elected to utilize the 10% de minimis rate, however, improperly included amounts related to capital expenditures in their determination of the MTDC base. Cause: The Council was aware of the proper method to be used in calculations but the inclusion of capital expenditures was overlooked in error. Effect or potential effect: The Council charged indirect costs to the federal program that exceeded 10% of the MTDC. The overage that was charged to the federal program does not exceed 5% of the total program expenditures over the lifetime of the award. Questioned Costs: $121,838 Context: Over the lifetime of the award, the Council had various capital expenditure purchases totaling approximately $1,350,520 that were improperly included in the calculation of the MTDC. Identification of Repeat Finding: Not applicable. Recommendations: We recommend that the Council works to improve processes and controls over the calculation of, and monitoring of, indirect costs charged to federal programs. We also recommend that training be provided to ensure that all parties are aware of the proper methodology and processes. Views of Responsible Officials: See Corrective Action Plan.
Finding Number 2024-001: Represents a material weakness in internal control over compliance and material noncompliance with Maine Community Action Association d/b/a Maine Community Action Partnership's major federal program. Repeat Finding: No Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Description: Subrecipient Monitoring over Federal Awards Major Program: AL#93.647 - Social Services Research and Demonstration - Award numbers 90XP0450-01-05 and 90EDA0019-01-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Subrecipient Monitoring Condition: Single audit procedures noted that the subrecipient grant awards do not include the required wording in accordance with the Uniform Guidance and the Organization does not have a procedure for reviewing audited financial statements of subrecipients. Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.332(b) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: (1) Federal award identification. (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obliation: (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; 25 (xii) Assistance Listing title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at the time of disbursement. (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with §200.414 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.332(b)(g). An entity must verify that a subrecipient is audited as required. Cause: The Organization's subawards do not contain all of the required language and the Organization's policy and procedures related to subrecipient monitoring does not include a process for reviewing audits of subrecipients. Effect: The Organization was not in compliance with Uniform Guidance standards for requirements to monitor pass-through entities of federal awards. Recommendations: Management should update their subawards to include all of the required language and update their policies and procedures to include a process for reviewing audited financial statements of subrecipients. Views of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number 2024-001: Represents a material weakness in internal control over compliance and material noncompliance with Maine Community Action Association d/b/a Maine Community Action Partnership's major federal program. Repeat Finding: No Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Description: Subrecipient Monitoring over Federal Awards Major Program: AL#93.647 - Social Services Research and Demonstration - Award numbers 90XP0450-01-05 and 90EDA0019-01-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Subrecipient Monitoring Condition: Single audit procedures noted that the subrecipient grant awards do not include the required wording in accordance with the Uniform Guidance and the Organization does not have a procedure for reviewing audited financial statements of subrecipients. Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.332(b) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: (1) Federal award identification. (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obliation: (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; 25 (xii) Assistance Listing title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at the time of disbursement. (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with §200.414 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.332(b)(g). An entity must verify that a subrecipient is audited as required. Cause: The Organization's subawards do not contain all of the required language and the Organization's policy and procedures related to subrecipient monitoring does not include a process for reviewing audits of subrecipients. Effect: The Organization was not in compliance with Uniform Guidance standards for requirements to monitor pass-through entities of federal awards. Recommendations: Management should update their subawards to include all of the required language and update their policies and procedures to include a process for reviewing audited financial statements of subrecipients. Views of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
2024-001 [2023-001] — INDIRECT COST CALCULATIONS AND REPORTING Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Veteran Affairs Title: VA Homeless Providers Grant and Per Diem Program Assistance Listing #: 64.024 Award #: NMVI604-2909-501-PD Award Period: 10/1/2023–9/30/2024 Estimated Questioned Costs: $29,745 Statement of Condition: During our review of the NMVIC’s indirect cost (IDC) calculations, we identified discrepancies between the calculated allowable IDC and the amounts reported. The NMVIC reported total direct costs of $652,406, and after removing rent of $9,083, we calculated a Modified Total Direct Cost (MTDC) base of $643,323. However, because the NMVIC does not separately track federal versus non-federal expenditures, the accuracy of this base is uncertain. As a result, we used revenue received of $427,443 as the base for estimating allowable IDC, applying the approved indirect cost rate of 10% to arrive at an allowable IDC of $42,744. In comparison, the NMVIC’s Profit and Loss report reflected IDC of $64,830, and the SF-425 reports and client-provided calculations indicated IDC of $72,490. The variance appears to have resulted from the calculation method and inconsistent bases used by the NMVIC. Criteria: Per Uniform Guidance (2 CFR 200.403 and 2 CFR 200.414), indirect costs must be calculated based on the approved indirect cost rate agreement and applied to the appropriate base (Modified Total Direct Costs), excluding specifically unallowable costs such as rent. Additionally, the cost base should be properly supported and consistently applied. Cause: The NMVIC did not apply the approved indirect cost rate to an appropriate and supported cost base. Instead, alternative and inconsistent calculation methods were used, resulting in the overstatement of IDC. Effect: As a result of this miscalculation, the NMVIC claimed indirect costs in excess of the allowable amount under their approved rate. This raises the risk of disallowed costs and potential repayment requirements and reflects a deficiency in internal controls over financial reporting related to grant compliance. Recommendation: We recommend that the NMVIC implement procedures to ensure indirect costs are calculated accurately and consistently, in accordance with the approved indirect cost rate agreement and applicable federal regulations. Specifically, the NMVIC should establish controls to maintain a properly supported cost base that distinguishes between federal and non-federal expenditures and ensures that unallowable costs, such as rent, are excluded from the calculation. Additionally, management should reconcile indirect cost calculations across internal reports and federal filings to prevent discrepancies. View of Responsible Officials and Corrective Action Plan We acknowledge the findings and appreciate the diligence of the audit team in identifying the discrepancies in our indirect cost calculations and reporting as outlined in the draft findings. The Veterans Integration Center (VIC) is committed to maintaining the highest standards of compliance with all federal regulations and grant requirements. Corrective Action Plan 1. Training and Guidelines: All relevant staff will undergo training to understand and implement the correct procedures for calculating indirect costs. Comprehensive guidelines will be developed and disseminated to ensure consistency across all calculations and reporting. 2. Completion of SF-425 Jointly: The COO, and VIC’s contracted Accountant will confirm the accurate Modified Total Direct Costs (MTDC) which is to be used in completing the SF-425, then prepare the GPD SF-425 jointly to ensure its accuracy. 3. Review and Approval Process: An additional layer of review and approval will be established for all indirect cost calculations before they are reported. This step will involve our Chief Executive Officer (CEO) to ensure accuracy and compliance. Corrective Action Plan Timeline • Staff Training and Guidelines Distribution: Completed by Q4 2025 • Completion of SF-425 Jointly: Starting Q3 2025 with SF-425 revision • Review and Approval Process: Effective immediately, with CEO, reviews starting Q3 2025 Designation of Employee Position Responsible for Meeting Deadline The Chief Operating Officer (COO) will be responsible for the oversight and successful implementation of the corrective action plan. The COO will coordinate with the contracted internal Accountant to ensure all actions are taken within the stipulated timelines and report directly to the Chief Executive Officer on the progress.
Condition: HOPE has elected to use the de minimis indirect cost rate of 10%. While billing the federal grantor on a monthly basis, HOPE applied this 10% rate to the direct costs. However, there was no clear documentation demonstrating how this application related to the organization's actual indirect costs incurred to support the federal program, beyond simply adding the percentage to the direct cost billing. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart E, § 200.403, states that costs charged to Federal awards must be allowable, allocable, and reasonable. While § 200.414(f) permits the use of a de minimis indirect cost rate of 10%, its application should serve as a mechanism to recover a portion of the organization's actual indirect costs. Cause and effect: HOPE experienced turnover in the CFO position during the year. In prior years, HOPE recorded all costs, including indirect costs, in the cost center (“class”) assigned to the funding source. During the year under audit, this practice wasn’t consistently followed. Recommendation: I recommend that HOPE continue to use “classes” consistently in the accounting software to capture program expenditures by funding source, including indirect costs. Views of Responsible Officials: This discrepancy resulted from a lack of understanding by the CFO in processing grant related funding. Grant policies have been updated, and personnel trained to direct and understand the role of independent accounting by funding sources through class codes.
Condition: HOPE has elected to use the de minimis indirect cost rate of 10%. While billing the federal grantor on a monthly basis, HOPE applied this 10% rate to the direct costs. However, there was no clear documentation demonstrating how this application related to the organization's actual indirect costs incurred to support the federal program, beyond simply adding the percentage to the direct cost billing. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart E, § 200.403, states that costs charged to Federal awards must be allowable, allocable, and reasonable. While § 200.414(f) permits the use of a de minimis indirect cost rate of 10%, its application should serve as a mechanism to recover a portion of the organization's actual indirect costs. Cause and effect: HOPE experienced turnover in the CFO position during the year. In prior years, HOPE recorded all costs, including indirect costs, in the cost center (“class”) assigned to the funding source. During the year under audit, this practice wasn’t consistently followed. Recommendation: I recommend that HOPE continue to use “classes” consistently in the accounting software to capture program expenditures by funding source, including indirect costs. Views of Responsible Officials: This discrepancy resulted from a lack of understanding by the CFO in processing grant related funding. Grant policies have been updated, and personnel trained to direct and understand the role of independent accounting by funding sources through class codes.
Condition: HOPE has elected to use the de minimis indirect cost rate of 10%. While billing the federal grantor on a monthly basis, HOPE applied this 10% rate to the direct costs. However, there was no clear documentation demonstrating how this application related to the organization's actual indirect costs incurred to support the federal program, beyond simply adding the percentage to the direct cost billing. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart E, § 200.403, states that costs charged to Federal awards must be allowable, allocable, and reasonable. While § 200.414(f) permits the use of a de minimis indirect cost rate of 10%, its application should serve as a mechanism to recover a portion of the organization's actual indirect costs. Cause and effect: HOPE experienced turnover in the CFO position during the year. In prior years, HOPE recorded all costs, including indirect costs, in the cost center (“class”) assigned to the funding source. During the year under audit, this practice wasn’t consistently followed. Recommendation: I recommend that HOPE continue to use “classes” consistently in the accounting software to capture program expenditures by funding source, including indirect costs. Views of Responsible Officials: This discrepancy resulted from a lack of understanding by the CFO in processing grant related funding. Grant policies have been updated, and personnel trained to direct and understand the role of independent accounting by funding sources through class codes.
2024-002 – Material Weakness in Internal Control over Compliance and Noncompliance – Allowable Costs/Cost Principles: Indirect Costs Identification of federal program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Uniform Guidance 2 C.F.R. § 200.414(f): Any non-federal entity that does not have a current negotiated cost rate may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely. As described in § 200.403, costs must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both. If chosen, this methodology once elected must be used consistently for all federal awards until such time as a nonfederal entity chooses to negotiate for a rate, which the non-federal entity may apply to do at any time. Condition: As defined by the Uniform Guidance, the determination of MTDC excludes equipment and capital expenditures, in addition to various other categories of expenditures. The Council properly elected to utilize the 10% de minimis rate, however, improperly included amounts related to capital expenditures in their determination of the MTDC base. Cause: The Council was aware of the proper method to be used in calculations but the inclusion of capital expenditures was overlooked in error. Effect or potential effect: The Council charged indirect costs to the federal program that exceeded 10% of the MTDC. The overage that was charged to the federal program does not exceed 5% of the total program expenditures over the lifetime of the award. Questioned Costs: $121,838 Context: Over the lifetime of the award, the Council had various capital expenditure purchases totaling approximately $1,350,520 that were improperly included in the calculation of the MTDC. Identification of Repeat Finding: Not applicable. Recommendations: We recommend that the Council works to improve processes and controls over the calculation of, and monitoring of, indirect costs charged to federal programs. We also recommend that training be provided to ensure that all parties are aware of the proper methodology and processes. Views of Responsible Officials: See Corrective Action Plan.
Finding Number 2024-001: Represents a material weakness in internal control over compliance and material noncompliance with Maine Community Action Association d/b/a Maine Community Action Partnership's major federal program. Repeat Finding: No Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Description: Subrecipient Monitoring over Federal Awards Major Program: AL#93.647 - Social Services Research and Demonstration - Award numbers 90XP0450-01-05 and 90EDA0019-01-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Subrecipient Monitoring Condition: Single audit procedures noted that the subrecipient grant awards do not include the required wording in accordance with the Uniform Guidance and the Organization does not have a procedure for reviewing audited financial statements of subrecipients. Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.332(b) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: (1) Federal award identification. (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obliation: (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; 25 (xii) Assistance Listing title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at the time of disbursement. (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with §200.414 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.332(b)(g). An entity must verify that a subrecipient is audited as required. Cause: The Organization's subawards do not contain all of the required language and the Organization's policy and procedures related to subrecipient monitoring does not include a process for reviewing audits of subrecipients. Effect: The Organization was not in compliance with Uniform Guidance standards for requirements to monitor pass-through entities of federal awards. Recommendations: Management should update their subawards to include all of the required language and update their policies and procedures to include a process for reviewing audited financial statements of subrecipients. Views of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number 2024-001: Represents a material weakness in internal control over compliance and material noncompliance with Maine Community Action Association d/b/a Maine Community Action Partnership's major federal program. Repeat Finding: No Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Description: Subrecipient Monitoring over Federal Awards Major Program: AL#93.647 - Social Services Research and Demonstration - Award numbers 90XP0450-01-05 and 90EDA0019-01-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Subrecipient Monitoring Condition: Single audit procedures noted that the subrecipient grant awards do not include the required wording in accordance with the Uniform Guidance and the Organization does not have a procedure for reviewing audited financial statements of subrecipients. Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.332(b) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: (1) Federal award identification. (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obliation: (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; 25 (xii) Assistance Listing title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at the time of disbursement. (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with §200.414 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.332(b)(g). An entity must verify that a subrecipient is audited as required. Cause: The Organization's subawards do not contain all of the required language and the Organization's policy and procedures related to subrecipient monitoring does not include a process for reviewing audits of subrecipients. Effect: The Organization was not in compliance with Uniform Guidance standards for requirements to monitor pass-through entities of federal awards. Recommendations: Management should update their subawards to include all of the required language and update their policies and procedures to include a process for reviewing audited financial statements of subrecipients. Views of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.