Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations Federal Program: 17.258, 17.259, 17.278 WIOA Cluster Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.” Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense. Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated. Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes. Responsible Official's Response: The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.
Identification of federal program: FEDERAL COMMUNICATIONS COMMISSION 32.009 Emergency Connectivity Fund Program passed through the Indiana Department of Education. Criteria: According to 2 CFR Subpart F Section 200.510b, the auditee must preapre a Schedule of Expenditures of Federal Awards (SEFA) for the period that includes all amounts spent on federal programs during the reporting period.Condition: The SEFA excluded the Emergency Connectivity Fund Program and was materially understated by $81,750.Cause: Grant agreements were not stored in a centralized location accessible to key members of management and the outsourced accountant.Effect: An audit adjustment was made to increase grant receivable and revenue by $494,757 in 2021 and adjust 2022 grant receivable, net assets with donor restriction, and revenue.Recommendation: PPHS should implement a review process for the SEFA whereby key members of management review the SEFA for completeness.Views of responsible officials: See attached corrective action plan.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 (ROE) to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The ROE did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following: • Program title descriptions were incorrect, and COVID-19-related grants were not properly identified in the program title. • Assistance listing numbers and pass-through grant numbers were incorrectly listed. • Federal expenditures did not match the expenditures in the general ledger. • Subrecipient expenditures were inappropriately reported on grants that did not actually have subrecipients: • The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported. The ROE subsequently revised its SEFA to correct these errors. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The ROE should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The ROE agrees with this finding.
CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 (ROE) to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The ROE did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following: • Program title descriptions were incorrect, and COVID-19-related grants were not properly identified in the program title. • Assistance listing numbers and pass-through grant numbers were incorrectly listed. • Federal expenditures did not match the expenditures in the general ledger. • Subrecipient expenditures were inappropriately reported on grants that did not actually have subrecipients: • The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported. The ROE subsequently revised its SEFA to correct these errors. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The ROE should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The ROE agrees with this finding.
CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 (ROE) to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The ROE did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following: • Program title descriptions were incorrect, and COVID-19-related grants were not properly identified in the program title. • Assistance listing numbers and pass-through grant numbers were incorrectly listed. • Federal expenditures did not match the expenditures in the general ledger. • Subrecipient expenditures were inappropriately reported on grants that did not actually have subrecipients: • The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported. The ROE subsequently revised its SEFA to correct these errors. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The ROE should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The ROE agrees with this finding.
CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 (ROE) to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The ROE did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following: • Program title descriptions were incorrect, and COVID-19-related grants were not properly identified in the program title. • Assistance listing numbers and pass-through grant numbers were incorrectly listed. • Federal expenditures did not match the expenditures in the general ledger. • Subrecipient expenditures were inappropriately reported on grants that did not actually have subrecipients: • The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported. The ROE subsequently revised its SEFA to correct these errors. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The ROE should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The ROE agrees with this finding.
CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 (ROE) to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The ROE did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following: • Program title descriptions were incorrect, and COVID-19-related grants were not properly identified in the program title. • Assistance listing numbers and pass-through grant numbers were incorrectly listed. • Federal expenditures did not match the expenditures in the general ledger. • Subrecipient expenditures were inappropriately reported on grants that did not actually have subrecipients: • The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported. The ROE subsequently revised its SEFA to correct these errors. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The ROE should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The ROE agrees with this finding.
CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 (ROE) to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The ROE did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following: • Program title descriptions were incorrect, and COVID-19-related grants were not properly identified in the program title. • Assistance listing numbers and pass-through grant numbers were incorrectly listed. • Federal expenditures did not match the expenditures in the general ledger. • Subrecipient expenditures were inappropriately reported on grants that did not actually have subrecipients: • The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported. The ROE subsequently revised its SEFA to correct these errors. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The ROE should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The ROE agrees with this finding.
CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 (ROE) to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The ROE did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following: • Program title descriptions were incorrect, and COVID-19-related grants were not properly identified in the program title. • Assistance listing numbers and pass-through grant numbers were incorrectly listed. • Federal expenditures did not match the expenditures in the general ledger. • Subrecipient expenditures were inappropriately reported on grants that did not actually have subrecipients: • The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported. The ROE subsequently revised its SEFA to correct these errors. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The ROE should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The ROE agrees with this finding.
CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 (ROE) to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The ROE did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following: • Program title descriptions were incorrect, and COVID-19-related grants were not properly identified in the program title. • Assistance listing numbers and pass-through grant numbers were incorrectly listed. • Federal expenditures did not match the expenditures in the general ledger. • Subrecipient expenditures were inappropriately reported on grants that did not actually have subrecipients: • The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported. The ROE subsequently revised its SEFA to correct these errors. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The ROE should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The ROE agrees with this finding.
Identification of federal program: US DEPARTMENT OF EDUCATION passed through the Indiana Department of Education: Charter Schools Program 84.282A. See finding in Section B. Criteria : According to 2 CFR Subpart F Section 200.510b, the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period that includes all amounts spent on federal programs during the reporting period. Condition : The SEFA under-reported the expenditures for Charter Schools Program (CSP) by $24,206. Cause : The School prepared the SEFA based on the federal revenue recorded, rather than the actual federal expenditures incurred. Effect : An audit adjustment of $24,206 was made to increase the federal expenditures reported on the SEFA for the CSP program. Questioned costs: none. Context: $24,406 out of $635,116 total program expenditures were omitted from the SEFA. Recommendation : We recommend that the School implement procedures whereby the SEFA is prepared based on federal expenditures incurred on a GAAP basis. View of responsible officials : See attached corrective action plan.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S Department of Agriculture (USDA) U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster Coronavirus State and Local Fiscal Recovery Funds Temporary Assistance for Needy Families Cluster CCDF Cluster Medicaid Cluster Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781) 21.027 ($4,895,262,395) 93.558 ($606,030,110) 93.575/93.596 ($941,280,574) 93.775/93.777/93.778 ($18,817,832,850) 93.959 ($81,408,580) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: Cannot be determined Compliance Requirement: None Finding 2022-010: Inaccurate Reporting of Federal Expenditures Type of Finding: Noncompliance and material weakness Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the completion of the State’s 2022 single audit. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that differences in the amounts of federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion to a new financial accounting system, which included creation of new database queries and reports derived from the new financial system data sources that were used for financial reporting. Possible Asserted Effect: Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.