Reference Number: 2023-001 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Assistance Listing Number: 93.323 Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: N/A Federal Award Number and Year: 6 NU50CK000498-02-04; Fiscal Year 2021-22 Name of Department: Department of Public Health Category of Finding: Schedule of Expenditure of Federal Awards Type of Finding: Significant Deficiency in Internal Control Over Financial Reporting Criteria In accordance with Title 2 U.S. Code of Federal Regulations (CFR) § 200.510 the non-Federal entity must prepare the schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee non-Federal entity's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. 2 CFR § 200.502 states: The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. Condition During our audit of the Department of Public Health’s (DPH) Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, we noted that DPH under reported expenditures in the SEFA for fiscal year ended June 30, 2022 by $27.5 million. The County disclosed the prior year expenditures not previously reported in note 9 to the SEFA. Cause The program misinterpreted guidance provided by the Office of the Auditor-Controller on identifying expenditures to include in the SEFA, and did not include accruals recorded in the accounting system for services incurred but not paid as of June 30, 2022. Effect Failure to accurately identify and report Federal expenditures in the SEFA could affect the major program determination and the programs selected for audit. Questioned Costs Questioned costs were not identified. Context The FY 2021-22 SEFA underreported $27.5 million of expenditures, constituting 4.5 percent of the ELC program’s reported total expenditures of $607.4 million, or 4.3 percent of the ELC program’s actual total expenditures of $634.9 million. The County disclosed the prior year expenditures not previously reported in note 9 of the notes to the SEFA. The under reporting of expenditures in the SEFA did not affect the prior year’s major program determination and programs selected for audit. Recommendation We recommend that the DPH strengthen its processes for identifying and reporting Federal expenditures in the SEFA to ensure all services incurred but not paid during the applicable fiscal year are appropriately included in the SEFA.
Reference Number: 2023-001 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Assistance Listing Number: 93.323 Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: N/A Federal Award Number and Year: 6 NU50CK000498-02-04; Fiscal Year 2021-22 Name of Department: Department of Public Health Category of Finding: Schedule of Expenditure of Federal Awards Type of Finding: Significant Deficiency in Internal Control Over Financial Reporting Criteria In accordance with Title 2 U.S. Code of Federal Regulations (CFR) § 200.510 the non-Federal entity must prepare the schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee non-Federal entity's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. 2 CFR § 200.502 states: The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. Condition During our audit of the Department of Public Health’s (DPH) Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, we noted that DPH under reported expenditures in the SEFA for fiscal year ended June 30, 2022 by $27.5 million. The County disclosed the prior year expenditures not previously reported in note 9 to the SEFA. Cause The program misinterpreted guidance provided by the Office of the Auditor-Controller on identifying expenditures to include in the SEFA, and did not include accruals recorded in the accounting system for services incurred but not paid as of June 30, 2022. Effect Failure to accurately identify and report Federal expenditures in the SEFA could affect the major program determination and the programs selected for audit. Questioned Costs Questioned costs were not identified. Context The FY 2021-22 SEFA underreported $27.5 million of expenditures, constituting 4.5 percent of the ELC program’s reported total expenditures of $607.4 million, or 4.3 percent of the ELC program’s actual total expenditures of $634.9 million. The County disclosed the prior year expenditures not previously reported in note 9 of the notes to the SEFA. The under reporting of expenditures in the SEFA did not affect the prior year’s major program determination and programs selected for audit. Recommendation We recommend that the DPH strengthen its processes for identifying and reporting Federal expenditures in the SEFA to ensure all services incurred but not paid during the applicable fiscal year are appropriately included in the SEFA.
Reference Number: 2023-001 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Assistance Listing Number: 93.323 Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: N/A Federal Award Number and Year: 6 NU50CK000498-02-04; Fiscal Year 2021-22 Name of Department: Department of Public Health Category of Finding: Schedule of Expenditure of Federal Awards Type of Finding: Significant Deficiency in Internal Control Over Financial Reporting Criteria In accordance with Title 2 U.S. Code of Federal Regulations (CFR) § 200.510 the non-Federal entity must prepare the schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee non-Federal entity's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. 2 CFR § 200.502 states: The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. Condition During our audit of the Department of Public Health’s (DPH) Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, we noted that DPH under reported expenditures in the SEFA for fiscal year ended June 30, 2022 by $27.5 million. The County disclosed the prior year expenditures not previously reported in note 9 to the SEFA. Cause The program misinterpreted guidance provided by the Office of the Auditor-Controller on identifying expenditures to include in the SEFA, and did not include accruals recorded in the accounting system for services incurred but not paid as of June 30, 2022. Effect Failure to accurately identify and report Federal expenditures in the SEFA could affect the major program determination and the programs selected for audit. Questioned Costs Questioned costs were not identified. Context The FY 2021-22 SEFA underreported $27.5 million of expenditures, constituting 4.5 percent of the ELC program’s reported total expenditures of $607.4 million, or 4.3 percent of the ELC program’s actual total expenditures of $634.9 million. The County disclosed the prior year expenditures not previously reported in note 9 of the notes to the SEFA. The under reporting of expenditures in the SEFA did not affect the prior year’s major program determination and programs selected for audit. Recommendation We recommend that the DPH strengthen its processes for identifying and reporting Federal expenditures in the SEFA to ensure all services incurred but not paid during the applicable fiscal year are appropriately included in the SEFA.
Reference Number: 2023-001 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Assistance Listing Number: 93.323 Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: N/A Federal Award Number and Year: 6 NU50CK000498-02-04; Fiscal Year 2021-22 Name of Department: Department of Public Health Category of Finding: Schedule of Expenditure of Federal Awards Type of Finding: Significant Deficiency in Internal Control Over Financial Reporting Criteria In accordance with Title 2 U.S. Code of Federal Regulations (CFR) § 200.510 the non-Federal entity must prepare the schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee non-Federal entity's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. 2 CFR § 200.502 states: The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. Condition During our audit of the Department of Public Health’s (DPH) Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, we noted that DPH under reported expenditures in the SEFA for fiscal year ended June 30, 2022 by $27.5 million. The County disclosed the prior year expenditures not previously reported in note 9 to the SEFA. Cause The program misinterpreted guidance provided by the Office of the Auditor-Controller on identifying expenditures to include in the SEFA, and did not include accruals recorded in the accounting system for services incurred but not paid as of June 30, 2022. Effect Failure to accurately identify and report Federal expenditures in the SEFA could affect the major program determination and the programs selected for audit. Questioned Costs Questioned costs were not identified. Context The FY 2021-22 SEFA underreported $27.5 million of expenditures, constituting 4.5 percent of the ELC program’s reported total expenditures of $607.4 million, or 4.3 percent of the ELC program’s actual total expenditures of $634.9 million. The County disclosed the prior year expenditures not previously reported in note 9 of the notes to the SEFA. The under reporting of expenditures in the SEFA did not affect the prior year’s major program determination and programs selected for audit. Recommendation We recommend that the DPH strengthen its processes for identifying and reporting Federal expenditures in the SEFA to ensure all services incurred but not paid during the applicable fiscal year are appropriately included in the SEFA.
Reference Number: 2023-001 Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Assistance Listing Number: 93.323 Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: N/A Federal Award Number and Year: 6 NU50CK000498-02-04; Fiscal Year 2021-22 Name of Department: Department of Public Health Category of Finding: Schedule of Expenditure of Federal Awards Type of Finding: Significant Deficiency in Internal Control Over Financial Reporting Criteria In accordance with Title 2 U.S. Code of Federal Regulations (CFR) § 200.510 the non-Federal entity must prepare the schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee non-Federal entity's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. 2 CFR § 200.502 states: The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. Condition During our audit of the Department of Public Health’s (DPH) Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, we noted that DPH under reported expenditures in the SEFA for fiscal year ended June 30, 2022 by $27.5 million. The County disclosed the prior year expenditures not previously reported in note 9 to the SEFA. Cause The program misinterpreted guidance provided by the Office of the Auditor-Controller on identifying expenditures to include in the SEFA, and did not include accruals recorded in the accounting system for services incurred but not paid as of June 30, 2022. Effect Failure to accurately identify and report Federal expenditures in the SEFA could affect the major program determination and the programs selected for audit. Questioned Costs Questioned costs were not identified. Context The FY 2021-22 SEFA underreported $27.5 million of expenditures, constituting 4.5 percent of the ELC program’s reported total expenditures of $607.4 million, or 4.3 percent of the ELC program’s actual total expenditures of $634.9 million. The County disclosed the prior year expenditures not previously reported in note 9 of the notes to the SEFA. The under reporting of expenditures in the SEFA did not affect the prior year’s major program determination and programs selected for audit. Recommendation We recommend that the DPH strengthen its processes for identifying and reporting Federal expenditures in the SEFA to ensure all services incurred but not paid during the applicable fiscal year are appropriately included in the SEFA.
2023 – 007 Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, and 84.268 Federal Award Identification Number and Year: See FAIN numbers included within the Context section below; all grants were awarded within the 2021-22 and 2022-23 award years. Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: Uniform Guidance requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA) which must include the total federal awards expended as determined in accordance with sub-section 200.502. 2 CFR 200.510. The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. Condition and Context: During our testing of completeness of the SEFA for Cheyney University (P007A213558, P007A223558, P063P212131, P063P222131, P268K222131, and P268K232131) we noted approximately $3,000,000 of institutional aid expenditures were incorrectly included in the Student Financial Assistance Cluster. The error is a result of institutional aid expenditures being disallowed from the student financial assistance program and the SEFA not being subsequently updated. Questioned Costs: N/A Cause: The University did not timely update the SEFA and provide an updated version to the auditors. Effect: The SEFA contained errors in the balances reported for federal expenditures, which can cause the miscalculation of major programs and testing selections. Repeat Finding: No Recommendation: The University should review applicable guidance as well as its policies and procedures in place to ensure Federal grant and loan related activity is properly reflecting within the SEFA. Views of Responsible Officials: There is no disagreement with the audit finding.
2023 – 007 Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, and 84.268 Federal Award Identification Number and Year: See FAIN numbers included within the Context section below; all grants were awarded within the 2021-22 and 2022-23 award years. Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: Uniform Guidance requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA) which must include the total federal awards expended as determined in accordance with sub-section 200.502. 2 CFR 200.510. The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. Condition and Context: During our testing of completeness of the SEFA for Cheyney University (P007A213558, P007A223558, P063P212131, P063P222131, P268K222131, and P268K232131) we noted approximately $3,000,000 of institutional aid expenditures were incorrectly included in the Student Financial Assistance Cluster. The error is a result of institutional aid expenditures being disallowed from the student financial assistance program and the SEFA not being subsequently updated. Questioned Costs: N/A Cause: The University did not timely update the SEFA and provide an updated version to the auditors. Effect: The SEFA contained errors in the balances reported for federal expenditures, which can cause the miscalculation of major programs and testing selections. Repeat Finding: No Recommendation: The University should review applicable guidance as well as its policies and procedures in place to ensure Federal grant and loan related activity is properly reflecting within the SEFA. Views of Responsible Officials: There is no disagreement with the audit finding.
2023 – 007 Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, and 84.268 Federal Award Identification Number and Year: See FAIN numbers included within the Context section below; all grants were awarded within the 2021-22 and 2022-23 award years. Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: Uniform Guidance requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA) which must include the total federal awards expended as determined in accordance with sub-section 200.502. 2 CFR 200.510. The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. Condition and Context: During our testing of completeness of the SEFA for Cheyney University (P007A213558, P007A223558, P063P212131, P063P222131, P268K222131, and P268K232131) we noted approximately $3,000,000 of institutional aid expenditures were incorrectly included in the Student Financial Assistance Cluster. The error is a result of institutional aid expenditures being disallowed from the student financial assistance program and the SEFA not being subsequently updated. Questioned Costs: N/A Cause: The University did not timely update the SEFA and provide an updated version to the auditors. Effect: The SEFA contained errors in the balances reported for federal expenditures, which can cause the miscalculation of major programs and testing selections. Repeat Finding: No Recommendation: The University should review applicable guidance as well as its policies and procedures in place to ensure Federal grant and loan related activity is properly reflecting within the SEFA. Views of Responsible Officials: There is no disagreement with the audit finding.
2023 – 007 Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, and 84.268 Federal Award Identification Number and Year: See FAIN numbers included within the Context section below; all grants were awarded within the 2021-22 and 2022-23 award years. Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: Uniform Guidance requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA) which must include the total federal awards expended as determined in accordance with sub-section 200.502. 2 CFR 200.510. The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. Condition and Context: During our testing of completeness of the SEFA for Cheyney University (P007A213558, P007A223558, P063P212131, P063P222131, P268K222131, and P268K232131) we noted approximately $3,000,000 of institutional aid expenditures were incorrectly included in the Student Financial Assistance Cluster. The error is a result of institutional aid expenditures being disallowed from the student financial assistance program and the SEFA not being subsequently updated. Questioned Costs: N/A Cause: The University did not timely update the SEFA and provide an updated version to the auditors. Effect: The SEFA contained errors in the balances reported for federal expenditures, which can cause the miscalculation of major programs and testing selections. Repeat Finding: No Recommendation: The University should review applicable guidance as well as its policies and procedures in place to ensure Federal grant and loan related activity is properly reflecting within the SEFA. Views of Responsible Officials: There is no disagreement with the audit finding.
2023-002 Reporting Federal Agency: Federal Emergency Management Agency Federal Program Names: COVID-19, Disaster Grants – Public Assistance Assistance Listing Number: 97.036 Award Period: 7/1/2022 – 6/30/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Uniform guidance requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) which must include the total federal awards expended as determined in accordance with sub-section 200.502. 2 CFR 200.510. Condition: It was identified that there were expenditures included on SEFA for the year ended June 30, 2023 that were for awards obligated in the prior fiscal year. Questioned Costs: None. Context: There are $78,859 reported on the current year SEFA that should have been reported on the SEFA for the period ended June 30, 2022. Cause: The University’s policies and procedures did not ensure that funds obligated in the prior fiscal year were appropriately included on the SEFA. Effect: Amounts reported on the current year SEFA should have been reported on the prior year SEFA. Repeat Finding: No. Recommendation: We recommend that the University reevaluate its policies and controls related to the preparation of the SEFA to ensure its complete and accurate. Views of responsible officials: There is no disagreement with the audit finding.
This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.
This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.
This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.
This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.
This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.
This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.667 Program Name: Social Security Blocks Grant U.S Department of Health and Human Services Passed-through Eckerd Youth Alternatives, Inc. ALN Number: 93.558 Program Name: Temporary Assistance for Needy Families State of Florida Department of Children and Families Passed-through Family Support Services of Suncoast CSFA Number: 60.214 Project Name: Family Preservation and CWS Diversion Program – Circuit 6 See Financial Statement Finding 2023-001 Material Weakness Criteria: The schedule of expenditures of federal awards and state financial assistance (the Schedule) should reflect expenditures of federal and state programs. Generally, this would mean that the expenses reported should reconcile to the consolidated financial statements. 2 CFR 200.510(b) indicates that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include total federal awards expended as determined in accordance with 2 CFR 200.502. Rule 69I-5.003 of the Department of Financial Services, Rules, Chapter 69I-5, Florida Administrative Code, State Financial Assistance, requires an auditee to prepare a schedule of expenditures of state financial assistance for the period covered by the auditee’s financial statements. Condition: When compiling the Schedule, the Organization omitted expenditures from one federal program and one state project, resulting in the Schedule being incomplete and inaccurate. Cause: Proper controls were not put into place in order to ensure that all post-award notices received from funding agencies were properly incorporated into the Schedule. Effect or Potential Effect: The amounts that are misreported could potentially be in the wrong fiscal year or perpetually omitted from the Schedule, impacting future funding from government agencies. ALN Number 93.667 was understated on the Schedule $564,123. ALN Number 93.558 was overstated on the Schedule by $1,139,173. CSFA Number 60.214 was understated on the Schedule by $727,339. Recommendation: We recommend that management enhance controls and procedures to ensure all post-award notices received from funding agencies are properly incorporated into the Schedule. We recommend management enhance controls around the Schedule reconciliation process back to the consolidated financial statements. Questioned Costs: None Context: This finding is isolated to the federal programs and state project identified above. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Questioned Costs: Not applicable Criteria: The Uniform Guidance Federal regulations per 2 CFR section 200.510 requires, an auditee to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR section 200.502. With respect to Disaster Grant – Public Assistance Grants, nonfederal entities must record expenditures on the Schedule of Expenditures of Federal Awards (SEFA) when (1) FEMA has approved the nonfederal entity’s Project worksheet, and (2) the nonfederal entity has incurred the eligible expenditures. Federal awards expended in years after the fiscal year in which the Project is approved are to be recorded on the nonfederal entity’s SEFA in those subsequent years. Universe/Population: Not applicable. Condition: The dollar amount of federal awards expended for the Disaster Grant – Public Assistance was not reported accurately on the prepared schedule provided by management. Cause: Internal controls have not been properly established over the reconciliation of FEMA approved projects with allowable expenditures for reporting on the SEFA. Effect: Improper reporting of expenditures resulted in an incorrect assessment of the major federal programs to be audited as the dollar threshold distinguishing type A and B programs remained volatile based on revisions and reconciliation of expenditures recorded in the fund for which disaster grant funding was to be the source of reimbursement. Recommendations: The School Board should develop and establish a process with its outsourced administrator of FEMA funded projects to ensure the proper federal awards are reported on the SEFA. View of Responsible Official: Management concurs with this finding, see corrective action plan dated March 27, 2024.
Finding 2023-011 – Schedule of Expenditures of Federal Awards (SEFA) Preparation Identification of the federal program: U.S. Department of Education Office of Federal Student Aid Student Financial Assistance Cluster Assistance Listing No. 84.007, 84.063, 84.268 Good Samaritan College of Nursing & Health Science Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303 requires that a 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 compliance with guidance in “Standards for Internal Control the Federal Government” issued by the Comptroller General the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Title 2, Subtitle A Chapter II Part 200 Subpart F Section 200.510(b) Schedule of expenditures of Federal awards. The auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with Section 200.502. Section 200.502(a) states the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Condition: Management did not have effective internal controls in place to ensure accurate and complete reporting of federal programs on the SEFA. This resulted an overstatement of the SFA expenditures reported in the SEFA. Cause: Management did not reconcile amounts reported on the SEFA for the SFA program to the underlying detail to ensure accurate and complete reporting of the federal program in the SEFA. Effect or potential effect: Certain amounts in the SEFA were reported incorrectly or omitted. Questioned costs: None. Context: During our testing for Good Samaritan College of Nursing & Health Science, we obtained a population of disbursements and reconciled the total payments to the SEFA. Disbursements totaled $3,538,116 compared to the amount reported in the SEFA of $4,627,538. This resulted in an overstatement of SFA expenditures reported in the SEFA of $1,089,372 for Good Samaritan College of Nursing & Health Science. The amounts reported in the final SEFA in this report for SFA expenditures for Good Samaritan College of Nursing & Health Science have been corrected to $3,538,116. Management’s control regarding the review of the SEFA did not identify this error. SFA expenditures for Good Samaritan College of Nursing & Health Science of $3.5 million represent 85% of total SFA expenditures of $4.2 million and 1% of total SEFA expenditures of $309.9 million. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: Management should develop and implement internal controls to ensure the completeness and accuracy of the SEFA and review applicable guidance prior to finalization. Views of responsible officials: Management agrees with the finding and implemented corrective action in February 2024.
Finding 2023-011 – Schedule of Expenditures of Federal Awards (SEFA) Preparation Identification of the federal program: U.S. Department of Education Office of Federal Student Aid Student Financial Assistance Cluster Assistance Listing No. 84.007, 84.063, 84.268 Good Samaritan College of Nursing & Health Science Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303 requires that a 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 compliance with guidance in “Standards for Internal Control the Federal Government” issued by the Comptroller General the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Title 2, Subtitle A Chapter II Part 200 Subpart F Section 200.510(b) Schedule of expenditures of Federal awards. The auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with Section 200.502. Section 200.502(a) states the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Condition: Management did not have effective internal controls in place to ensure accurate and complete reporting of federal programs on the SEFA. This resulted an overstatement of the SFA expenditures reported in the SEFA. Cause: Management did not reconcile amounts reported on the SEFA for the SFA program to the underlying detail to ensure accurate and complete reporting of the federal program in the SEFA. Effect or potential effect: Certain amounts in the SEFA were reported incorrectly or omitted. Questioned costs: None. Context: During our testing for Good Samaritan College of Nursing & Health Science, we obtained a population of disbursements and reconciled the total payments to the SEFA. Disbursements totaled $3,538,116 compared to the amount reported in the SEFA of $4,627,538. This resulted in an overstatement of SFA expenditures reported in the SEFA of $1,089,372 for Good Samaritan College of Nursing & Health Science. The amounts reported in the final SEFA in this report for SFA expenditures for Good Samaritan College of Nursing & Health Science have been corrected to $3,538,116. Management’s control regarding the review of the SEFA did not identify this error. SFA expenditures for Good Samaritan College of Nursing & Health Science of $3.5 million represent 85% of total SFA expenditures of $4.2 million and 1% of total SEFA expenditures of $309.9 million. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: Management should develop and implement internal controls to ensure the completeness and accuracy of the SEFA and review applicable guidance prior to finalization. Views of responsible officials: Management agrees with the finding and implemented corrective action in February 2024.
Finding 2023-011 – Schedule of Expenditures of Federal Awards (SEFA) Preparation Identification of the federal program: U.S. Department of Education Office of Federal Student Aid Student Financial Assistance Cluster Assistance Listing No. 84.007, 84.063, 84.268 Good Samaritan College of Nursing & Health Science Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303 requires that a 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 compliance with guidance in “Standards for Internal Control the Federal Government” issued by the Comptroller General the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Title 2, Subtitle A Chapter II Part 200 Subpart F Section 200.510(b) Schedule of expenditures of Federal awards. The auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with Section 200.502. Section 200.502(a) states the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Condition: Management did not have effective internal controls in place to ensure accurate and complete reporting of federal programs on the SEFA. This resulted an overstatement of the SFA expenditures reported in the SEFA. Cause: Management did not reconcile amounts reported on the SEFA for the SFA program to the underlying detail to ensure accurate and complete reporting of the federal program in the SEFA. Effect or potential effect: Certain amounts in the SEFA were reported incorrectly or omitted. Questioned costs: None. Context: During our testing for Good Samaritan College of Nursing & Health Science, we obtained a population of disbursements and reconciled the total payments to the SEFA. Disbursements totaled $3,538,116 compared to the amount reported in the SEFA of $4,627,538. This resulted in an overstatement of SFA expenditures reported in the SEFA of $1,089,372 for Good Samaritan College of Nursing & Health Science. The amounts reported in the final SEFA in this report for SFA expenditures for Good Samaritan College of Nursing & Health Science have been corrected to $3,538,116. Management’s control regarding the review of the SEFA did not identify this error. SFA expenditures for Good Samaritan College of Nursing & Health Science of $3.5 million represent 85% of total SFA expenditures of $4.2 million and 1% of total SEFA expenditures of $309.9 million. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: Management should develop and implement internal controls to ensure the completeness and accuracy of the SEFA and review applicable guidance prior to finalization. Views of responsible officials: Management agrees with the finding and implemented corrective action in February 2024.
2023-004 – Schedule of Expenditures of Federal Awards Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Award Period: 7/1/2022 – 6/30/2023 Type of Finding: Other Noncompliance and Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: Uniform guidance requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) which must include the total federal awards expended as determined in accordance with sub-section 200.502. 2 CFR 200.510. A non-federal entity must maintain effective internal control over the federal award (2 CFR 200.303). Condition: During our testing of the SEFA it was identified that there were missing federal expenditures, expenditures included in error that were not related to a federal grant, and amounts reported as subrecipient pass through expenses in error. Questioned Costs: N/A. Context: Federal expenses were omitted from the schedule totaling $5,648,252 of federal passthrough funds. In addition, $3,848,887 were erroneously included in the SEFA that did not meet the definition of federal funds and management included approximately $2,487,864 in pass-through funds to subrecipients in error. The SEFA was revised to correct these errors. Cause: The University’s policies and procedures were not followed or not adequate to ensure a complete and accurate SEFA. Effect: The SEFA did not include correct amounts for the fiscal year ended June 30, 2023. Repeat Finding: No. Recommendation: We recommend that the University reevaluate its policies and controls related to the preparation of the SEFA to ensure its complete and accurate. Views of Responsible Officials: There is no disagreement with the audit finding and the University is in the process of implementing corrective procedures.
FINDING 2023-202 Closing package submissions and revisions completed prior to the draft of the Schedule of Expenditures of Federal Awards (SEFA) being submitted for audit were not included in the schedule resulting in misstatements. Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Fund; Medical Assistance Program; and Children’s Health Insurance Fund Assistance Listing Number: 21.027; 93.778; 93.767 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations (CFR) 200.510(b) Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502. • Total amount provided to subrecipients from each federal program. Condition: The SEFA submitted for audit purposes included misstatements for Direct Awards for Assistance Listing (AL) number 21.027 (Coronavirus State and Local Fiscal Recovery Fund (CSLFRF)), 93.778 (Medical Assistance Program (Medicaid)), and 93.767 (Children’s Health Insurance Program (CHIP)). We noted the following errors in Direct Award Expenditures: • AL number 21.027 was understated $21,358,086 for Direct Award Expenditures reported by the Department of Health and Welfare and by an additional $500,000 reported by the Department of Correction. • AL number 93.778 was understated by $25,108,923 for Direct Expenditures reported by the Department of Health and Welfare. • AL number 93.767 was overstated by $3,469,677 for Direct Expenditures reported by the Department of Health and Welfare. Cause: Each year, State agencies report total federal awards expended on a closing package. The Office uses these closing packages to compile the SEFA. The Office’s review procedures over this process did not include the revised closing package submitted by the Department of Health and Welfare or the revisions communicated between the Office and the Department of Corrections. These revisions occurred prior to the draft of the SEFA submitted for audit. Effect: The SEFA submitted for audit contained misstatements; however, these errors have been corrected. In the absence of audit work completed, the statewide SEFA would have included an understatement of $21,858,086 for the CSLFRF program; an understatement of $25,108,923for the Medicaid program; and an overstatement of $3,469,677 for the CHIP program. Recommendation: We recommend that the Office design and implement procedures to ensure amounts reported on closing package submissions and later revisions are properly reviewed and reported on the statewide SEFA. Management’s View: The Office aAgrees with this finding. Corrective Action: An agency submitted a revised SEFA template in November 2023. We inadvertently excluded those revisions from the draft of the SEFA provided for audit. To prevent this error from happening again, we will document each agency that submits a revised SEFA template(s) on our SEFA review checklist. This will require the preparer and reviewer(s) to verify and sign off on changes made to the SEFA master file. Errors identified were corrected before issuance of the Single Audit report. Corrective actions will be implemented for fiscal year 2024 reporting. Auditor’s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2023-202 Closing package submissions and revisions completed prior to the draft of the Schedule of Expenditures of Federal Awards (SEFA) being submitted for audit were not included in the schedule resulting in misstatements. Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Fund; Medical Assistance Program; and Children’s Health Insurance Fund Assistance Listing Number: 21.027; 93.778; 93.767 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations (CFR) 200.510(b) Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502. • Total amount provided to subrecipients from each federal program. Condition: The SEFA submitted for audit purposes included misstatements for Direct Awards for Assistance Listing (AL) number 21.027 (Coronavirus State and Local Fiscal Recovery Fund (CSLFRF)), 93.778 (Medical Assistance Program (Medicaid)), and 93.767 (Children’s Health Insurance Program (CHIP)). We noted the following errors in Direct Award Expenditures: • AL number 21.027 was understated $21,358,086 for Direct Award Expenditures reported by the Department of Health and Welfare and by an additional $500,000 reported by the Department of Correction. • AL number 93.778 was understated by $25,108,923 for Direct Expenditures reported by the Department of Health and Welfare. • AL number 93.767 was overstated by $3,469,677 for Direct Expenditures reported by the Department of Health and Welfare. Cause: Each year, State agencies report total federal awards expended on a closing package. The Office uses these closing packages to compile the SEFA. The Office’s review procedures over this process did not include the revised closing package submitted by the Department of Health and Welfare or the revisions communicated between the Office and the Department of Corrections. These revisions occurred prior to the draft of the SEFA submitted for audit. Effect: The SEFA submitted for audit contained misstatements; however, these errors have been corrected. In the absence of audit work completed, the statewide SEFA would have included an understatement of $21,858,086 for the CSLFRF program; an understatement of $25,108,923for the Medicaid program; and an overstatement of $3,469,677 for the CHIP program. Recommendation: We recommend that the Office design and implement procedures to ensure amounts reported on closing package submissions and later revisions are properly reviewed and reported on the statewide SEFA. Management’s View: The Office aAgrees with this finding. Corrective Action: An agency submitted a revised SEFA template in November 2023. We inadvertently excluded those revisions from the draft of the SEFA provided for audit. To prevent this error from happening again, we will document each agency that submits a revised SEFA template(s) on our SEFA review checklist. This will require the preparer and reviewer(s) to verify and sign off on changes made to the SEFA master file. Errors identified were corrected before issuance of the Single Audit report. Corrective actions will be implemented for fiscal year 2024 reporting. Auditor’s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2023-202 Closing package submissions and revisions completed prior to the draft of the Schedule of Expenditures of Federal Awards (SEFA) being submitted for audit were not included in the schedule resulting in misstatements. Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Fund; Medical Assistance Program; and Children’s Health Insurance Fund Assistance Listing Number: 21.027; 93.778; 93.767 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations (CFR) 200.510(b) Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502. • Total amount provided to subrecipients from each federal program. Condition: The SEFA submitted for audit purposes included misstatements for Direct Awards for Assistance Listing (AL) number 21.027 (Coronavirus State and Local Fiscal Recovery Fund (CSLFRF)), 93.778 (Medical Assistance Program (Medicaid)), and 93.767 (Children’s Health Insurance Program (CHIP)). We noted the following errors in Direct Award Expenditures: • AL number 21.027 was understated $21,358,086 for Direct Award Expenditures reported by the Department of Health and Welfare and by an additional $500,000 reported by the Department of Correction. • AL number 93.778 was understated by $25,108,923 for Direct Expenditures reported by the Department of Health and Welfare. • AL number 93.767 was overstated by $3,469,677 for Direct Expenditures reported by the Department of Health and Welfare. Cause: Each year, State agencies report total federal awards expended on a closing package. The Office uses these closing packages to compile the SEFA. The Office’s review procedures over this process did not include the revised closing package submitted by the Department of Health and Welfare or the revisions communicated between the Office and the Department of Corrections. These revisions occurred prior to the draft of the SEFA submitted for audit. Effect: The SEFA submitted for audit contained misstatements; however, these errors have been corrected. In the absence of audit work completed, the statewide SEFA would have included an understatement of $21,858,086 for the CSLFRF program; an understatement of $25,108,923for the Medicaid program; and an overstatement of $3,469,677 for the CHIP program. Recommendation: We recommend that the Office design and implement procedures to ensure amounts reported on closing package submissions and later revisions are properly reviewed and reported on the statewide SEFA. Management’s View: The Office aAgrees with this finding. Corrective Action: An agency submitted a revised SEFA template in November 2023. We inadvertently excluded those revisions from the draft of the SEFA provided for audit. To prevent this error from happening again, we will document each agency that submits a revised SEFA template(s) on our SEFA review checklist. This will require the preparer and reviewer(s) to verify and sign off on changes made to the SEFA master file. Errors identified were corrected before issuance of the Single Audit report. Corrective actions will be implemented for fiscal year 2024 reporting. Auditor’s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2023-202 Closing package submissions and revisions completed prior to the draft of the Schedule of Expenditures of Federal Awards (SEFA) being submitted for audit were not included in the schedule resulting in misstatements. Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Fund; Medical Assistance Program; and Children’s Health Insurance Fund Assistance Listing Number: 21.027; 93.778; 93.767 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations (CFR) 200.510(b) Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502. • Total amount provided to subrecipients from each federal program. Condition: The SEFA submitted for audit purposes included misstatements for Direct Awards for Assistance Listing (AL) number 21.027 (Coronavirus State and Local Fiscal Recovery Fund (CSLFRF)), 93.778 (Medical Assistance Program (Medicaid)), and 93.767 (Children’s Health Insurance Program (CHIP)). We noted the following errors in Direct Award Expenditures: • AL number 21.027 was understated $21,358,086 for Direct Award Expenditures reported by the Department of Health and Welfare and by an additional $500,000 reported by the Department of Correction. • AL number 93.778 was understated by $25,108,923 for Direct Expenditures reported by the Department of Health and Welfare. • AL number 93.767 was overstated by $3,469,677 for Direct Expenditures reported by the Department of Health and Welfare. Cause: Each year, State agencies report total federal awards expended on a closing package. The Office uses these closing packages to compile the SEFA. The Office’s review procedures over this process did not include the revised closing package submitted by the Department of Health and Welfare or the revisions communicated between the Office and the Department of Corrections. These revisions occurred prior to the draft of the SEFA submitted for audit. Effect: The SEFA submitted for audit contained misstatements; however, these errors have been corrected. In the absence of audit work completed, the statewide SEFA would have included an understatement of $21,858,086 for the CSLFRF program; an understatement of $25,108,923for the Medicaid program; and an overstatement of $3,469,677 for the CHIP program. Recommendation: We recommend that the Office design and implement procedures to ensure amounts reported on closing package submissions and later revisions are properly reviewed and reported on the statewide SEFA. Management’s View: The Office aAgrees with this finding. Corrective Action: An agency submitted a revised SEFA template in November 2023. We inadvertently excluded those revisions from the draft of the SEFA provided for audit. To prevent this error from happening again, we will document each agency that submits a revised SEFA template(s) on our SEFA review checklist. This will require the preparer and reviewer(s) to verify and sign off on changes made to the SEFA master file. Errors identified were corrected before issuance of the Single Audit report. Corrective actions will be implemented for fiscal year 2024 reporting. Auditor’s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2023-204 The Schedule of Expenditures of Federal Awards (SEFA) closing package understated the Education Stabilization Fund - Governor’s Emergency Education Relief (GEER II) by $1,039,753 and overstated the Education Stabilization Fund – Emergency Assistance to Non-Public Schools (EANS) program by the same amount. Related to Prior Finding: 2021-202 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Governors Emergency Education Relief Fund; Emergency Assistance for Non-Public Schools Assistance Listing Number: 84.425C; 84.425R Federal Award Number: S425C210043; S425R210024 Program Year: January 8, 2021 – September 30, 2023; February 11, 2021 – September 30, 2023 Federal Agency: Department of Education Compliance Requirement: SEFA MisstatementU.S. Code of Federal Regulations (CFR) 200.510(b) Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions. It provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR § 200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR § 200.502, and • Total amount provided to subrecipients from each federal program The Office of Management and Budget (OMB) Compliance Supplement also indicates that the SEFA should include the individual subprograms the funds were expended under, including each separate Assistance Listing (AL) number with the applicable alpha character. Condition: The Board completed a SEFA closing package to report federal grant expenditures. This closing package included errors in reporting for the Education Stabilization Fund. The Governor’s Emergency Education Relief (GEER II, Assistance Listing number 84.425C) expenditures were understated by $1,039,753 and the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 – Emergency Assistance to Non-Public Schools (EANS, Assistance Listing number 84.425R) expenditures were overstated by $1,039,753. Cause: The State was given a specific period of time to obligate funds under the EANS program. Unobligated funds were then required to be reverted to the governor to be redistributed and used under the GEER II program. The Board had difficulty tracking available funds for each program. When preparing the SEFA, Board staff found errors in the total amounts reported for each program and made unsupported adjustments to these two programs. Effect: Total federal expenditures reported on the Board’s SEFA was correct. However, specific identification by program, as required, was understated by $1,039,753 for one program, and one program was overstated by the same amount. Recommendation: We recommend that the Board design and implement procedures to ensure federal expenditure amounts for each program are properly reported and proper adjustments are made prior to the reporting deadline. Management’s View: The Board agrees with the finding. Corrective Action: The Report states “the State was given a specific period of time to obligate funds under the EANS program. Unobligated funds were then required to be reverted to the governor to be redistributed and used under the GEER II program. The Board had difficulty tracking available funds for each program. When preparing the SEFA, Board staff found errors in the total amounts reported for each program and made unsupported adjustments to these two programs.” The Finding states that total federal expenditures reported on the Board’s SEFA was correct. However, specific identification by program, as required, was understated by $1,039,753 for one program, and overstated for another program, by the same amount. Patrick Coulson, Chief Financial Officer and Scott Christie, Financial Manager met with Amy Brown, LSO Audit Manager. Ms. Brown indicated that the EANS funds should have been moved from the State Department of Education (SDE) federal DoE G5 system to OSBE G5 system for better management of the funds. Mr. Christie asked Gideon Tolman, Chief Financial Officer for SDE whether the EANS funds in G5 would move to OSBE G5. Mr. Tolman said they would not. At this point OSBE was working with three PCAs used for the same Budget Unit and Fund for all GEER II funds: GEER II 29410, EANS 29710 and GEANS (which was created for the reverted EANS funds now GEER II funds). The GEER II PCA 29410 had a specific CFDA number based on the Grant Award Notification. EANS PCA 29710 had a specific CFDA number based on the example Grant Award Notification provided by SDE. OSBE was not aware of, nor was it provided, a unique CFDA number that should be used for the reverted EANS/GEER II funds. Mr. Christie considered the SDE EANS GEER funds the same as the OSBE GEER funds. In other words, once unobligated EANS moneys were reverted (by operation of law) to the Governor,1 all moneys in the GEER II fund were considered fungible.2 They were in the same OSBE appropriation, Budget Unit and Fund. The only distinction was that OSBE and SDE had access to separate buckets of GEER cash. When a large contract came up for payment on June 29th, Mr. Christie was also looking ahead at the implementation of the new statewide ERP Luma system. Mr. Christie wasn’t confident that Project Contracts had been set up correctly in Luma. Mr. Christie also understood that there would be considerably more work reconciling grant to cash balances in Luma compared to the legacy ERP system. For these reasons, on June 29th Mr. Christie drew down all the remaining GEER II funds to zero out that grant by the end of the fiscal year. When the coding for the contract payment came across, it was coded to PCA 29410, GEER II. OSBE could have coded the payment to either PCA 29450 or 29710, as they were now all considered GEER II funds. We do not believe that there were unsupported adjustments to these two programs. The adjustments were based on making sure the SEFA was accurate, and accuracy was confirmed in the Report: “total federal expenditures reported on the Board’s SEFA was [sic] correct.” We wanted to ensure we were not overstating the expenses for GEER II on the SEFA. We believe the adjustments can be, and have been, explained and are supported by the simple fact that one PCA was chosen instead of another for the same fungible GEER II funds. Nevertheless, we will agree with the audit finding. Corrective Action: The corrective action is to reclass any GEER II Project transactions in FY 2024 to EANS/GEER II Project. That will ensure there are no GEER II transactions in FY 2024 that would need to be adjusted. This was done on March 21, 2024. Auditor’s Concluding Remarks: We thank the Board for its cooperation and assistance throughout the audit. We continue to assert that the Board submitted the SEFA closing package with errors, and that it was not aware there were errors until the audit team identified them as part of the procedures completed for this audit. If adjustments were being made to ensure an accurate SEFA, they failed. Our statement that “total federal expenditures reported on the Board’s SEFA was correct” is related to the material accuracy of the SEFA as a whole. This finding identifies errors made in reporting required by the Office of Management and Budget, as communicated in the Compliance Supplement, where it states that that the SEFA should include the individual subprograms the funds were expended under, including each separate Assistance Listing number with the applicable alpha character. There are many requirements related to the presentation of the SEFA beyond total expenditures that are reviewed for accuracy, such as amounts paid to subrecipients, or COVID-19 and non-cash expenditures. The errors made by the Board were between programs with different applicable alpha characters, and those programs serve different purposes. Accurate reporting that meets all requirements is important to ensure compliance with the terms of the grant.
FINDING 2023-204 The Schedule of Expenditures of Federal Awards (SEFA) closing package understated the Education Stabilization Fund - Governor’s Emergency Education Relief (GEER II) by $1,039,753 and overstated the Education Stabilization Fund – Emergency Assistance to Non-Public Schools (EANS) program by the same amount. Related to Prior Finding: 2021-202 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Governors Emergency Education Relief Fund; Emergency Assistance for Non-Public Schools Assistance Listing Number: 84.425C; 84.425R Federal Award Number: S425C210043; S425R210024 Program Year: January 8, 2021 – September 30, 2023; February 11, 2021 – September 30, 2023 Federal Agency: Department of Education Compliance Requirement: SEFA MisstatementU.S. Code of Federal Regulations (CFR) 200.510(b) Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions. It provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR § 200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR § 200.502, and • Total amount provided to subrecipients from each federal program The Office of Management and Budget (OMB) Compliance Supplement also indicates that the SEFA should include the individual subprograms the funds were expended under, including each separate Assistance Listing (AL) number with the applicable alpha character. Condition: The Board completed a SEFA closing package to report federal grant expenditures. This closing package included errors in reporting for the Education Stabilization Fund. The Governor’s Emergency Education Relief (GEER II, Assistance Listing number 84.425C) expenditures were understated by $1,039,753 and the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 – Emergency Assistance to Non-Public Schools (EANS, Assistance Listing number 84.425R) expenditures were overstated by $1,039,753. Cause: The State was given a specific period of time to obligate funds under the EANS program. Unobligated funds were then required to be reverted to the governor to be redistributed and used under the GEER II program. The Board had difficulty tracking available funds for each program. When preparing the SEFA, Board staff found errors in the total amounts reported for each program and made unsupported adjustments to these two programs. Effect: Total federal expenditures reported on the Board’s SEFA was correct. However, specific identification by program, as required, was understated by $1,039,753 for one program, and one program was overstated by the same amount. Recommendation: We recommend that the Board design and implement procedures to ensure federal expenditure amounts for each program are properly reported and proper adjustments are made prior to the reporting deadline. Management’s View: The Board agrees with the finding. Corrective Action: The Report states “the State was given a specific period of time to obligate funds under the EANS program. Unobligated funds were then required to be reverted to the governor to be redistributed and used under the GEER II program. The Board had difficulty tracking available funds for each program. When preparing the SEFA, Board staff found errors in the total amounts reported for each program and made unsupported adjustments to these two programs.” The Finding states that total federal expenditures reported on the Board’s SEFA was correct. However, specific identification by program, as required, was understated by $1,039,753 for one program, and overstated for another program, by the same amount. Patrick Coulson, Chief Financial Officer and Scott Christie, Financial Manager met with Amy Brown, LSO Audit Manager. Ms. Brown indicated that the EANS funds should have been moved from the State Department of Education (SDE) federal DoE G5 system to OSBE G5 system for better management of the funds. Mr. Christie asked Gideon Tolman, Chief Financial Officer for SDE whether the EANS funds in G5 would move to OSBE G5. Mr. Tolman said they would not. At this point OSBE was working with three PCAs used for the same Budget Unit and Fund for all GEER II funds: GEER II 29410, EANS 29710 and GEANS (which was created for the reverted EANS funds now GEER II funds). The GEER II PCA 29410 had a specific CFDA number based on the Grant Award Notification. EANS PCA 29710 had a specific CFDA number based on the example Grant Award Notification provided by SDE. OSBE was not aware of, nor was it provided, a unique CFDA number that should be used for the reverted EANS/GEER II funds. Mr. Christie considered the SDE EANS GEER funds the same as the OSBE GEER funds. In other words, once unobligated EANS moneys were reverted (by operation of law) to the Governor,1 all moneys in the GEER II fund were considered fungible.2 They were in the same OSBE appropriation, Budget Unit and Fund. The only distinction was that OSBE and SDE had access to separate buckets of GEER cash. When a large contract came up for payment on June 29th, Mr. Christie was also looking ahead at the implementation of the new statewide ERP Luma system. Mr. Christie wasn’t confident that Project Contracts had been set up correctly in Luma. Mr. Christie also understood that there would be considerably more work reconciling grant to cash balances in Luma compared to the legacy ERP system. For these reasons, on June 29th Mr. Christie drew down all the remaining GEER II funds to zero out that grant by the end of the fiscal year. When the coding for the contract payment came across, it was coded to PCA 29410, GEER II. OSBE could have coded the payment to either PCA 29450 or 29710, as they were now all considered GEER II funds. We do not believe that there were unsupported adjustments to these two programs. The adjustments were based on making sure the SEFA was accurate, and accuracy was confirmed in the Report: “total federal expenditures reported on the Board’s SEFA was [sic] correct.” We wanted to ensure we were not overstating the expenses for GEER II on the SEFA. We believe the adjustments can be, and have been, explained and are supported by the simple fact that one PCA was chosen instead of another for the same fungible GEER II funds. Nevertheless, we will agree with the audit finding. Corrective Action: The corrective action is to reclass any GEER II Project transactions in FY 2024 to EANS/GEER II Project. That will ensure there are no GEER II transactions in FY 2024 that would need to be adjusted. This was done on March 21, 2024. Auditor’s Concluding Remarks: We thank the Board for its cooperation and assistance throughout the audit. We continue to assert that the Board submitted the SEFA closing package with errors, and that it was not aware there were errors until the audit team identified them as part of the procedures completed for this audit. If adjustments were being made to ensure an accurate SEFA, they failed. Our statement that “total federal expenditures reported on the Board’s SEFA was correct” is related to the material accuracy of the SEFA as a whole. This finding identifies errors made in reporting required by the Office of Management and Budget, as communicated in the Compliance Supplement, where it states that that the SEFA should include the individual subprograms the funds were expended under, including each separate Assistance Listing number with the applicable alpha character. There are many requirements related to the presentation of the SEFA beyond total expenditures that are reviewed for accuracy, such as amounts paid to subrecipients, or COVID-19 and non-cash expenditures. The errors made by the Board were between programs with different applicable alpha characters, and those programs serve different purposes. Accurate reporting that meets all requirements is important to ensure compliance with the terms of the grant.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.