Program - Various, including AL 10.923 – Emergency Watershed Protection Program – Reporting Grant Number & Year - Various, including NR216526XXXXC004, December 7, 2020, through August 6, 2021 Federal Grantor Agency - Various, including U.S. Department of Agriculture Pass-Through Entity - Various Criteria - Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.510(b) (January 1, 2022) states, in part, the following: The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. 2 CFR § 200.512(a)(1) (January 1, 2022) states the following: The audit must be completed and the data collection form described in paragraph (b) ofthis section and reporting package described in paragraph (c) of this section must besubmitted 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. If the due date falls on a Saturday,Sunday, or Federal holiday, the reporting package is due the next business day. 2 CFR § 200.508 (January 1, 2022) states, in part, the following: The auditee must: (a) Procure or otherwise arrange for the audit required by this part in accordance with §200.509, and ensure it is properly performed and submitted when due in accordance with §200.512. 2 CFR § 200.303 (January 1, 2022) states the following, in relevant part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘‘Standards for Internal Control in the Federal Government’’ issued by the Comptroller General of the United States or the ‘‘Internal Control Integrated Framework’’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). A good internal control plan requires adequate procedures to ensure the Schedule of Expenditures Federal Awards (SEFA) is presented properly and includes all Federal expenditures made by the County during the fiscal year. Additionally, those same procedures should ensure the Federal audit is completed and submitted to the Federal Audit Clearinghouse within the time frame required by Title 2 CFR § 200.512. Condition - The County did not have adequate procedures in place to monitor Federal expenditures and ensure the Schedule of Expenditures of Federal Awards (SEFA) was completed and submitted to the Federal Audit Clearinghouse in accordance with Title 2 CFR § 200.512. Repeat Finding - No Questioned Costs - None Statistical Sample - No Context - The County had a basic financial statement audit completed for the fiscal year ending June 30, 2022, which was issued on January 4, 2023, but that audit did not include the additional information necessary to meet Uniform Guidance and Single Audit Act requirements. When the audit for the fiscal year ending June 30, 2023, was completed, the Auditor of Public Accounts identified that the County should have had a Single Audit completed for the fiscal year ending June 30, 2022. Cause - Administration of Federal awards is decentralized, with each County office operating independently without any centralized reporting procedures in place to ensure all Federal expenditures of the County are reported accurately during the annual financial statement audit. Additionally, there is an overall lack of knowledge by County personnel related to Federal reporting requirements. Effect - Noncompliance with Federal regulations and an increased risk for the SEFA to be inaccurate, which could lead to Federal sanctions and Single Audits not being completed when required. Recommendation - We recommend the County establish written procedures to ensure the SEFA is complete and accurate. Such procedures may include, among other things, a requirement that all offices in the County responsible for administering Federal grants report their grant expenditures, as well as related information, to a single individual in the County with overall responsibility for Federal reporting requirements. That individual should be knowledgeable of all Federal reporting and compliance requirements, and review expenditures provided by each office to ensure all amounts are accurate and include all Federal expenditures of the County. Further, we recommend the County obtain necessary training related to Federal reporting requirements and ensure a Single Audit is completed and submitted to the Federal Audit Clearinghouse within the time frame required by Title 2 CFR § 200.512. View of Officials - The County will ensure County personnel obtain training to ensure there is a proper understanding of the Federal reporting requirements and preparation of the Schedule of Federal Awards.
EMPLOYMENT DEVELOPMENT DEPARTMENT Reference Number: 2022-001 Type of Finding: Material Weakness and Material Instance of Noncompliance Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart F - Audit Requirements. §200.510 Financial statements (2 CFR 200.510): (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (3) Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. Condition The State of California (State) has a decentralized financial reporting process, which requires State agencies and departments to provide specific financial information to the Department of Finance (Finance) in order to annually compile the Schedule of Expenditures of Federal Awards (Schedule). In its effort to more efficiently and accurately prepare the Schedule in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Finance developed the Single Audit Expenditures Reporting Database (Database). Finance developed the Database to include all of the relevant data fields necessary to compile and produce the Schedule. Finance also created a Single Audit Database User Manual, which provides specific guidance to users for accessing and navigating through the database. Due to the unprecedented impacts from the COVID-19 pandemic, the Employment Development Department (EDD) was unable to timely report to Finance through the Database with accurate and reliable federal cash basis expenditures for its largest federal award program that it administers, the Unemployment Insurance (ALN 17.225) program. The delay resulted in Finance being unable to compile and produce a complete and final approved Schedule until December 2023. Although an initial estimated expenditure amount was reported by EDD of $27.0 billion, the final amount reported in the Schedule was $23.3 billion. Cause Given the substantial increase in claimants seeking assistance under the Unemployment Insurance program resulting from the COVID-19 pandemic, EDD was overwhelmed with the administration of the Unemployment Insurance program. Effect The difficulties that EDD encountered from the COVID-19 pandemic, resulted in the late reporting and submission of final federal cash basis expenditures to Finance. The untimely submission continued to limit and constrain Finance from compiling and producing a final complete and accurate Schedule. Questioned Costs Questioned costs were not determinable. Recommendation EDD should continue to evaluate existing processes and controls related to its ability to properly report, and timely submit complete and accurate federal award cash basis expenditures to the Database, which affords Finance the ability to timely compile and produce a final Schedule pursuant to the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan EDD agrees with this finding. The deferred transition to FI$Cal and the difficulties experienced thereafter have continued to cause EDD to be late with submitting year-end financials and its ability to submit timely the cash basis expenditures into the Single Audit Expenditures Reporting Database (Database). In addition, the onset of the COVID-19 pandemic created additional issues which ultimately impacted the EDD’s ability to submit timely year-end financials. However, the EDD continues to make progress to gain ground in the department’s efforts to follow the State’s deadlines for submitting year-end financials and entering the cash basis expenditures into the Database. During fiscal year 2022-23, the EDD completed a restructuring within the accounting area which realigned workload amongst the units and provided additional resources in critical areas. These changes will have a lasting effect and help the department to be better positioned going forward in processing the accounting workload and ultimately be able to catch up and submit year-end financials and enter the cash basis expenditures into the Database by the State’s deadlines. In addition, the EDD took lessons learned from the financial audits from the prior two fiscal years to update processes and procedures and applied that knowledge going forward. Also, staff continue to participate in various trainings offered by the Department of Finance and the Department of FI$Cal. In addition, staff work with the control agencies when issues arise that would impact our accounting functions.
EMPLOYMENT DEVELOPMENT DEPARTMENT Reference Number: 2022-001 Type of Finding: Material Weakness and Material Instance of Noncompliance Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart F - Audit Requirements. §200.510 Financial statements (2 CFR 200.510): (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (3) Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. Condition The State of California (State) has a decentralized financial reporting process, which requires State agencies and departments to provide specific financial information to the Department of Finance (Finance) in order to annually compile the Schedule of Expenditures of Federal Awards (Schedule). In its effort to more efficiently and accurately prepare the Schedule in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Finance developed the Single Audit Expenditures Reporting Database (Database). Finance developed the Database to include all of the relevant data fields necessary to compile and produce the Schedule. Finance also created a Single Audit Database User Manual, which provides specific guidance to users for accessing and navigating through the database. Due to the unprecedented impacts from the COVID-19 pandemic, the Employment Development Department (EDD) was unable to timely report to Finance through the Database with accurate and reliable federal cash basis expenditures for its largest federal award program that it administers, the Unemployment Insurance (ALN 17.225) program. The delay resulted in Finance being unable to compile and produce a complete and final approved Schedule until December 2023. Although an initial estimated expenditure amount was reported by EDD of $27.0 billion, the final amount reported in the Schedule was $23.3 billion. Cause Given the substantial increase in claimants seeking assistance under the Unemployment Insurance program resulting from the COVID-19 pandemic, EDD was overwhelmed with the administration of the Unemployment Insurance program. Effect The difficulties that EDD encountered from the COVID-19 pandemic, resulted in the late reporting and submission of final federal cash basis expenditures to Finance. The untimely submission continued to limit and constrain Finance from compiling and producing a final complete and accurate Schedule. Questioned Costs Questioned costs were not determinable. Recommendation EDD should continue to evaluate existing processes and controls related to its ability to properly report, and timely submit complete and accurate federal award cash basis expenditures to the Database, which affords Finance the ability to timely compile and produce a final Schedule pursuant to the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan EDD agrees with this finding. The deferred transition to FI$Cal and the difficulties experienced thereafter have continued to cause EDD to be late with submitting year-end financials and its ability to submit timely the cash basis expenditures into the Single Audit Expenditures Reporting Database (Database). In addition, the onset of the COVID-19 pandemic created additional issues which ultimately impacted the EDD’s ability to submit timely year-end financials. However, the EDD continues to make progress to gain ground in the department’s efforts to follow the State’s deadlines for submitting year-end financials and entering the cash basis expenditures into the Database. During fiscal year 2022-23, the EDD completed a restructuring within the accounting area which realigned workload amongst the units and provided additional resources in critical areas. These changes will have a lasting effect and help the department to be better positioned going forward in processing the accounting workload and ultimately be able to catch up and submit year-end financials and enter the cash basis expenditures into the Database by the State’s deadlines. In addition, the EDD took lessons learned from the financial audits from the prior two fiscal years to update processes and procedures and applied that knowledge going forward. Also, staff continue to participate in various trainings offered by the Department of Finance and the Department of FI$Cal. In addition, staff work with the control agencies when issues arise that would impact our accounting functions.
DDEPARTMENT OF PUBLIC HEALTH Reference Number: 2022-002 Type of Finding: Material Weakness and Instance of Noncompliance Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart F - Audit Requirements. §200.510 Financial statements (2 CFR 200.510): (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (3) Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. Condition The State of California (State) has a decentralized financial reporting process, which requires State agencies and departments to provide specific financial information to the Department of Finance (Finance) in order to annually compile the Schedule of Expenditures of Federal Awards (Schedule). In its effort to more efficiently and accurately prepare the Schedule in accordance with the requirements of 2 CFR 200.510, Finance developed the Single Audit Expenditures Reporting Database (Database) to include all relevant data fields necessary to compile and produce the Schedule. Finance also created a Single Audit Database User Manual, which provides specific guidance to users for accessing and navigating through the database. Departments are given access to the centralized Database by Finance in order to upload and report federal award information for all federal award programs which they administer. The California Department of Public Health (Public Health) understated federal expenditures and overstated amounts passed through to subrecipients for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program (ALN No. 93.323). The error, which was subsequently corrected, is indicative of a lack of sufficient controls for ensuring the Schedule’s completeness and accuracy prior to submission to Finance. Cause Public Health was a subrecipient of federal funds provided by their bona fide agent, Heluna Health, during the fiscal year ended June 30, 2022. Initially, the ELC program funds were not identified and recognized as federal expenditures until January 2023. During its compilation of federal award expenditures for reporting in Finance’s Database, Public Health did not properly analyze and capture all relevant financial transactions related to the ELC program. Effect Federal expenditures originally reported in the Schedule by Public Health for the ELC program were understated by $154,155,192 and the amounts passed through to subrecipients were overstated by $516,650,718. Questioned Costs No questioned costs were identified. Recommendation Public Health should establish a more thorough internal review and communication process between ELC program administration and accounting personnel to ensure information submitted to Finance for compilation of the Schedule is complete and accurate. Views of Responsible Officials and Corrective Action Plan Public Health’s Accounting Office will generate the FI$Cal Year End Close report (KK_12 expenditure) and collaborate with the ELC program to ensure that all expenditures captured are complete and accurate, ensuring timely reporting of the SEFA data for FY 2023-24 and beyond. Please note that the ELC program has been reported in the FY 2022-23 SEFA. Additionally, we will update the procedures to document the SEFA reporting for the ELC program. Estimated Implementation Date: September 2024 Contact: Jennifer Chan, Accounting Administrator II Federal Reporting Unit, Financial Management Division California Department of Public Health
FINDING 2022-207The amount reported as passed through to subrecipients on the Schedule of Expenditures of Federal Awards (SEFA) closing package was overstated by $331,500.Type of Finding: Significant DeficiencyAssistance Listing Title: Sport Fish Restoration; Wildlife Restoration and Basic Hunter EducationAssistance Listing Number: 15.605; 15.611Federal Award Number: F19AF00026; F19AF00093; F22AF00371; F14AF01014; F20AF11918; F22AF00372; F20AF11578; F21AF03374; F21AF03986; F21AF03986Program Year: January 1, 2019 ? December 31, 2021; January 1, 2019 ? December 31, 2021; January 1, 2022 ? December 31, 2024; August 1, 2014 ? June 30, 2022; July 1, 2020 ? June 30, 2021; January 1, 2022 ? December 31, 2024; July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023; July 1, 2021 ? June 30, 2022; July 1, 2021 ? June 30, 2022Federal Agency: Department of the InteriorCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions. It provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR ?200.510(b), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502, and? Total amount provided to subrecipients from each federal programCondition: The Department completed a SEFA closing package to report federal grant expenditures. The amount reported as passed through to subrecipients was overstated by a total of $331,500. The Sport Fish Restoration Program (Assistance Listing Number 15.605) payments to subrecipients were overstated by $10,513, and the Wildlife Restoration Program (Assistance Listing Number 16.611) payments to subrecipients were overstated by $320,987.Cause: The Department made payments to entities who received subawards under the grants and also provided specific vendor services for the grants. The person compiling the SEFA closing package was new to that process and included all payments to the entities as payments to subrecipients, even though some of the payments were for vendor services and should not have been included. The SEFA closing package was reviewed for accuracy prior to being submitted to the Office of the State Controller, but this review did not detect the error.Effect: The Department?s SEFA closing package overstated the amount passed through to subrecipients by $331,500. The total expenditures for the grant programs were $7,196,361 in the Sport Fish Restoration Program and $15,479,486 in the Wildlife Restoration Program. Subrecipient payments make up a small portion of the overall grant expenditures comprising $31,539 in the Sport Fish Restoration Program (0.44 percent of the total) and $520,630 in the Wildlife Restoration Program (3.36 percent of the total). The effect is limited because the trivial materiality for the statewide SEFA is $1.9 million. The Department submitted a corrected SEFA closing package to correct the error.Recommendation: We recommend that the Department design and implement procedures to ensure amounts passed through to subrecipients are accurately reported on the SEFA closing package.Management?s View: The Department has reviewed its reporting of subrecipient expenditures on the State Fiscal Year 2022 Schedule of Expenditure of Federal Awards (?SEFA?) and agrees with the finding that an overstatement was made.Corrective Action: The Department will provide additional training and update its procedural documentation to ensure that expenses are thoroughly vetted before they are reported as subrecipient expenditures on the SEFA. Each expenditure identified as a subrecipient expense will be tied back to a specific subaward, further limiting the possibility of non-subaward expenses being reported in the subrecipient portion of the SEFA. This corrective action plan will be implemented by the end of August 2023.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2022-207The amount reported as passed through to subrecipients on the Schedule of Expenditures of Federal Awards (SEFA) closing package was overstated by $331,500.Type of Finding: Significant DeficiencyAssistance Listing Title: Sport Fish Restoration; Wildlife Restoration and Basic Hunter EducationAssistance Listing Number: 15.605; 15.611Federal Award Number: F19AF00026; F19AF00093; F22AF00371; F14AF01014; F20AF11918; F22AF00372; F20AF11578; F21AF03374; F21AF03986; F21AF03986Program Year: January 1, 2019 ? December 31, 2021; January 1, 2019 ? December 31, 2021; January 1, 2022 ? December 31, 2024; August 1, 2014 ? June 30, 2022; July 1, 2020 ? June 30, 2021; January 1, 2022 ? December 31, 2024; July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023; July 1, 2021 ? June 30, 2022; July 1, 2021 ? June 30, 2022Federal Agency: Department of the InteriorCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions. It provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR ?200.510(b), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502, and? Total amount provided to subrecipients from each federal programCondition: The Department completed a SEFA closing package to report federal grant expenditures. The amount reported as passed through to subrecipients was overstated by a total of $331,500. The Sport Fish Restoration Program (Assistance Listing Number 15.605) payments to subrecipients were overstated by $10,513, and the Wildlife Restoration Program (Assistance Listing Number 16.611) payments to subrecipients were overstated by $320,987.Cause: The Department made payments to entities who received subawards under the grants and also provided specific vendor services for the grants. The person compiling the SEFA closing package was new to that process and included all payments to the entities as payments to subrecipients, even though some of the payments were for vendor services and should not have been included. The SEFA closing package was reviewed for accuracy prior to being submitted to the Office of the State Controller, but this review did not detect the error.Effect: The Department?s SEFA closing package overstated the amount passed through to subrecipients by $331,500. The total expenditures for the grant programs were $7,196,361 in the Sport Fish Restoration Program and $15,479,486 in the Wildlife Restoration Program. Subrecipient payments make up a small portion of the overall grant expenditures comprising $31,539 in the Sport Fish Restoration Program (0.44 percent of the total) and $520,630 in the Wildlife Restoration Program (3.36 percent of the total). The effect is limited because the trivial materiality for the statewide SEFA is $1.9 million. The Department submitted a corrected SEFA closing package to correct the error.Recommendation: We recommend that the Department design and implement procedures to ensure amounts passed through to subrecipients are accurately reported on the SEFA closing package.Management?s View: The Department has reviewed its reporting of subrecipient expenditures on the State Fiscal Year 2022 Schedule of Expenditure of Federal Awards (?SEFA?) and agrees with the finding that an overstatement was made.Corrective Action: The Department will provide additional training and update its procedural documentation to ensure that expenses are thoroughly vetted before they are reported as subrecipient expenditures on the SEFA. Each expenditure identified as a subrecipient expense will be tied back to a specific subaward, further limiting the possibility of non-subaward expenses being reported in the subrecipient portion of the SEFA. This corrective action plan will be implemented by the end of August 2023.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2022-203Errors in the elimination process for federal grants between State agencies resulted in misstatements to the Schedule of Expenditures of Federal Awards (SEFA) totaling $14,656,928 for direct awards and $14,278,362 provided to subrecipients.Type of Finding: Significant Deficiency, SEFA MisstatementAssistance Listing Title: State and Local Fiscal Recovery Fund; Gaining Early Awareness and Readiness for Undergraduate ProgramsAssistance Listing Number: 21.027; 84.334SFederal Award Number: 20-1982-0-1-806; PS334S110016Program Year: March 3, 2021 - December 31, 2024; September 26, 2011 - September 25, 2018Federal Agency: Department of Treasury; Department of EducationCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions. It provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programCondition: The SEFA submitted for audit purposes included misstatements for Direct Awards and Amounts Provided to Subrecipients for Assistance Listing (AL) Number 21.027 (Coronavirus State and Local Fiscal Recovery Fund (CSLFRF)) and 84.334S (Gaining Early Awareness and Readiness for Undergraduate Programs (GEARUP)). We noted the following errors:? Amounts for AL Number 21.027 were overstated by $12,534,055 for Direct Award Expenditures and by $12,171,845 for Amounts Provided to Subrecipients? Amounts for AL Number 84.334S were understated by $2,122,873 for Direct Expenditures and by $2,106,517 for Amounts Provided to SubrecipientsCause: Each year, State agencies report the total of federal awards expended on a closing package. The Office uses these closing packages to compile the SEFA. Federal funds received by one State agency and then passed on to another State agency get reported on both State agencies? SEFA closing package. The Office completes eliminations to avoid double counting expenditures for the same federal program. The Office?s review procedures over this process did not detect or prevent the duplicate expenditures for AL Number 21.027 and did not prevent the erroneous elimination of actual expenditures for AL Number 84.334S.Effect: The SEFA submitted for audit contained misstatements; however, these errors have been corrected.Recommendation: We recommend that the Office design and implement procedures to ensure amounts are properly reported and proper adjustments are made when federal funds are shared between State agencies.Management?s View: The Office agrees with this finding.Corrective Action: We will improve our elimination and reporting process by adding the following steps:? We will add an additional tab to our SEFA Master file to cross check all COVID-19 related funding to ensure agencies are not double reporting expenditures.? We will add additional steps to our SEFA preparation and review checklist outlining specific steps for completing the subrecipient elimination process, and identify higher risk areas that require the most scrutiny.? We will also improve our current elimination tab (awards received from other state agencies) and reconciliation procedures for subrecipients.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-203Errors in the elimination process for federal grants between State agencies resulted in misstatements to the Schedule of Expenditures of Federal Awards (SEFA) totaling $14,656,928 for direct awards and $14,278,362 provided to subrecipients.Type of Finding: Significant Deficiency, SEFA MisstatementAssistance Listing Title: State and Local Fiscal Recovery Fund; Gaining Early Awareness and Readiness for Undergraduate ProgramsAssistance Listing Number: 21.027; 84.334SFederal Award Number: 20-1982-0-1-806; PS334S110016Program Year: March 3, 2021 - December 31, 2024; September 26, 2011 - September 25, 2018Federal Agency: Department of Treasury; Department of EducationCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions. It provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programCondition: The SEFA submitted for audit purposes included misstatements for Direct Awards and Amounts Provided to Subrecipients for Assistance Listing (AL) Number 21.027 (Coronavirus State and Local Fiscal Recovery Fund (CSLFRF)) and 84.334S (Gaining Early Awareness and Readiness for Undergraduate Programs (GEARUP)). We noted the following errors:? Amounts for AL Number 21.027 were overstated by $12,534,055 for Direct Award Expenditures and by $12,171,845 for Amounts Provided to Subrecipients? Amounts for AL Number 84.334S were understated by $2,122,873 for Direct Expenditures and by $2,106,517 for Amounts Provided to SubrecipientsCause: Each year, State agencies report the total of federal awards expended on a closing package. The Office uses these closing packages to compile the SEFA. Federal funds received by one State agency and then passed on to another State agency get reported on both State agencies? SEFA closing package. The Office completes eliminations to avoid double counting expenditures for the same federal program. The Office?s review procedures over this process did not detect or prevent the duplicate expenditures for AL Number 21.027 and did not prevent the erroneous elimination of actual expenditures for AL Number 84.334S.Effect: The SEFA submitted for audit contained misstatements; however, these errors have been corrected.Recommendation: We recommend that the Office design and implement procedures to ensure amounts are properly reported and proper adjustments are made when federal funds are shared between State agencies.Management?s View: The Office agrees with this finding.Corrective Action: We will improve our elimination and reporting process by adding the following steps:? We will add an additional tab to our SEFA Master file to cross check all COVID-19 related funding to ensure agencies are not double reporting expenditures.? We will add additional steps to our SEFA preparation and review checklist outlining specific steps for completing the subrecipient elimination process, and identify higher risk areas that require the most scrutiny.? We will also improve our current elimination tab (awards received from other state agencies) and reconciliation procedures for subrecipients.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-203Errors in the elimination process for federal grants between State agencies resulted in misstatements to the Schedule of Expenditures of Federal Awards (SEFA) totaling $14,656,928 for direct awards and $14,278,362 provided to subrecipients.Type of Finding: Significant Deficiency, SEFA MisstatementAssistance Listing Title: State and Local Fiscal Recovery Fund; Gaining Early Awareness and Readiness for Undergraduate ProgramsAssistance Listing Number: 21.027; 84.334SFederal Award Number: 20-1982-0-1-806; PS334S110016Program Year: March 3, 2021 - December 31, 2024; September 26, 2011 - September 25, 2018Federal Agency: Department of Treasury; Department of EducationCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions. It provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programCondition: The SEFA submitted for audit purposes included misstatements for Direct Awards and Amounts Provided to Subrecipients for Assistance Listing (AL) Number 21.027 (Coronavirus State and Local Fiscal Recovery Fund (CSLFRF)) and 84.334S (Gaining Early Awareness and Readiness for Undergraduate Programs (GEARUP)). We noted the following errors:? Amounts for AL Number 21.027 were overstated by $12,534,055 for Direct Award Expenditures and by $12,171,845 for Amounts Provided to Subrecipients? Amounts for AL Number 84.334S were understated by $2,122,873 for Direct Expenditures and by $2,106,517 for Amounts Provided to SubrecipientsCause: Each year, State agencies report the total of federal awards expended on a closing package. The Office uses these closing packages to compile the SEFA. Federal funds received by one State agency and then passed on to another State agency get reported on both State agencies? SEFA closing package. The Office completes eliminations to avoid double counting expenditures for the same federal program. The Office?s review procedures over this process did not detect or prevent the duplicate expenditures for AL Number 21.027 and did not prevent the erroneous elimination of actual expenditures for AL Number 84.334S.Effect: The SEFA submitted for audit contained misstatements; however, these errors have been corrected.Recommendation: We recommend that the Office design and implement procedures to ensure amounts are properly reported and proper adjustments are made when federal funds are shared between State agencies.Management?s View: The Office agrees with this finding.Corrective Action: We will improve our elimination and reporting process by adding the following steps:? We will add an additional tab to our SEFA Master file to cross check all COVID-19 related funding to ensure agencies are not double reporting expenditures.? We will add additional steps to our SEFA preparation and review checklist outlining specific steps for completing the subrecipient elimination process, and identify higher risk areas that require the most scrutiny.? We will also improve our current elimination tab (awards received from other state agencies) and reconciliation procedures for subrecipients.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-203Errors in the elimination process for federal grants between State agencies resulted in misstatements to the Schedule of Expenditures of Federal Awards (SEFA) totaling $14,656,928 for direct awards and $14,278,362 provided to subrecipients.Type of Finding: Significant Deficiency, SEFA MisstatementAssistance Listing Title: State and Local Fiscal Recovery Fund; Gaining Early Awareness and Readiness for Undergraduate ProgramsAssistance Listing Number: 21.027; 84.334SFederal Award Number: 20-1982-0-1-806; PS334S110016Program Year: March 3, 2021 - December 31, 2024; September 26, 2011 - September 25, 2018Federal Agency: Department of Treasury; Department of EducationCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions. It provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programCondition: The SEFA submitted for audit purposes included misstatements for Direct Awards and Amounts Provided to Subrecipients for Assistance Listing (AL) Number 21.027 (Coronavirus State and Local Fiscal Recovery Fund (CSLFRF)) and 84.334S (Gaining Early Awareness and Readiness for Undergraduate Programs (GEARUP)). We noted the following errors:? Amounts for AL Number 21.027 were overstated by $12,534,055 for Direct Award Expenditures and by $12,171,845 for Amounts Provided to Subrecipients? Amounts for AL Number 84.334S were understated by $2,122,873 for Direct Expenditures and by $2,106,517 for Amounts Provided to SubrecipientsCause: Each year, State agencies report the total of federal awards expended on a closing package. The Office uses these closing packages to compile the SEFA. Federal funds received by one State agency and then passed on to another State agency get reported on both State agencies? SEFA closing package. The Office completes eliminations to avoid double counting expenditures for the same federal program. The Office?s review procedures over this process did not detect or prevent the duplicate expenditures for AL Number 21.027 and did not prevent the erroneous elimination of actual expenditures for AL Number 84.334S.Effect: The SEFA submitted for audit contained misstatements; however, these errors have been corrected.Recommendation: We recommend that the Office design and implement procedures to ensure amounts are properly reported and proper adjustments are made when federal funds are shared between State agencies.Management?s View: The Office agrees with this finding.Corrective Action: We will improve our elimination and reporting process by adding the following steps:? We will add an additional tab to our SEFA Master file to cross check all COVID-19 related funding to ensure agencies are not double reporting expenditures.? We will add additional steps to our SEFA preparation and review checklist outlining specific steps for completing the subrecipient elimination process, and identify higher risk areas that require the most scrutiny.? We will also improve our current elimination tab (awards received from other state agencies) and reconciliation procedures for subrecipients.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-211The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly identify COVID-19 Emergency Acts expenditures for multiple programs.Related to Prior Finding: 2021-206Type of Finding: Significant Deficiency, Noncompliance, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control GrantsAssistance Listing Number: 10.551; 10.557; 10.561; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023Federal Agency: Department of Agriculture; Department of Education; Health and Human ServicesCompliance Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR 200.510(b) requires the State to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year that must include the total federal awards expended. State agencies are required to report federal expenditures incurred for each federal program during the State fiscal year to the Office of the State Controller (Office) through the SEFA closing package. The Office provides instructions on the completion of the closing package.The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include things like approvals, authorizations, verifications, reconciliations, and segregation of duties.The Office of Management and Budget (OMB) Memorandum 20-26, Appendix A, states that in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify the COVID-19 Emergency Acts expenditures on the SEFA and audit report findings.Condition: The Department did not separately identify COVID-19 Emergency Acts related expenditures, as required by OMB Memorandum 20-26, on their SEFA submission for multiple programs. The specific programs include the following:? Supplemental Nutrition Assistance Program (Assistance Listing Number (AL) 10.551) for the amount of $38,370,588? Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) for the amount of $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL 10.561) for the amount of $354,983? Special Education-Grants for Infants and Families (AL 84.181) for the amount of $265,777? Activities to Support State, Tribal, Local and Territorial Health Department Response to Public Health or Healthcare Crises (AL 93.391) for the amount of $3,387,573? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL 93.497) for the amount of $183,807? Community-Based Child Abuse Prevention Grants (AL 93.590) for the amount of $156,539? Block Grants For Community Mental Health Services (AL 93.958) for the amount of $389,232? Preventive Health Services-Sexually Transmitted Diseases Control Grants (AL 93.977) for the amount of $156,712The total amount of expenditures for each of the above listed programs were accurately reported; however, specific identification of COVID-19 Emergency Acts expenditures was not accurately identified.Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2022 SEFA closing package was not completed at a level of detail sufficient to properly identify COVID-19 Emergency Acts expenditures.Effect: The Department did not separately identify the COVID-19 Emergency Acts expenditures on their SEFA in order to maximize transparency and accountability. In total, $44,812,369 across 9 programs was not properly identified as COVID-19 Emergency Acts related expenditures, as required.After we identified this issue, the amounts were separated, and the COVID-19 identification was added to the programs in a subsequent submission of SEFA information.Recommendation: We recommend that the Department improve the review process for the SEFA closing package to include training and specific procedures at a level of detail sufficient to identify inaccuracies or omission of required information such as the COVID-19 Emergency Acts expenditures.Management?s View: The Department agrees with this finding but it is important to highlight that our internal controls and review processes are designed to detect and correct material inaccuracies or omissions of required information within the annual SEFA. As this does not constitute a material error, but rather a significant deficiency, the Department?s controls for this process worked as intended.Corrective Action: This corrective action plan is complete. Effective immediately, we will monitor awards for any new COVID-19 funding, but we don?t believe that there will be any new COVID-19 awards. All existing awards have been confirmed as being reported as COVID-19 funding.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit. We would like to emphasize that internal controls should be designed to meet stated objectives. In this case, the objective is to provide requested information to the Office of the State Controller on closing packages that contain specific instructions, so that the Office can prepare the statewide Schedule of Expenditures of Federal Assistance (SEFA). The fact that the internal controls designed and implemented by the Department are only intended to identify material errors in the SEFA closing package significantly increases the risk that individually smaller errors will go undetected and uncorrected and potentially could result in an aggregated material misstatement. Additionally, minimalizing accuracy within reporting elements, such as the COVID-19 designation, increases the risk that these errors would go entirely undetected, even if they were material. We would also like to emphasize that including standard procedures to be alert for changing and new requirements is an important part of a strong internal control environment. While the COVID-19 funds may be in the process of being spent down, new very large programs are in process and could also have unique requirements that should be assessed.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-211The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly identify COVID-19 Emergency Acts expenditures for multiple programs.Related to Prior Finding: 2021-206Type of Finding: Significant Deficiency, Noncompliance, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control GrantsAssistance Listing Number: 10.551; 10.557; 10.561; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023Federal Agency: Department of Agriculture; Department of Education; Health and Human ServicesCompliance Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR 200.510(b) requires the State to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year that must include the total federal awards expended. State agencies are required to report federal expenditures incurred for each federal program during the State fiscal year to the Office of the State Controller (Office) through the SEFA closing package. The Office provides instructions on the completion of the closing package.The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include things like approvals, authorizations, verifications, reconciliations, and segregation of duties.The Office of Management and Budget (OMB) Memorandum 20-26, Appendix A, states that in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify the COVID-19 Emergency Acts expenditures on the SEFA and audit report findings.Condition: The Department did not separately identify COVID-19 Emergency Acts related expenditures, as required by OMB Memorandum 20-26, on their SEFA submission for multiple programs. The specific programs include the following:? Supplemental Nutrition Assistance Program (Assistance Listing Number (AL) 10.551) for the amount of $38,370,588? Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) for the amount of $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL 10.561) for the amount of $354,983? Special Education-Grants for Infants and Families (AL 84.181) for the amount of $265,777? Activities to Support State, Tribal, Local and Territorial Health Department Response to Public Health or Healthcare Crises (AL 93.391) for the amount of $3,387,573? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL 93.497) for the amount of $183,807? Community-Based Child Abuse Prevention Grants (AL 93.590) for the amount of $156,539? Block Grants For Community Mental Health Services (AL 93.958) for the amount of $389,232? Preventive Health Services-Sexually Transmitted Diseases Control Grants (AL 93.977) for the amount of $156,712The total amount of expenditures for each of the above listed programs were accurately reported; however, specific identification of COVID-19 Emergency Acts expenditures was not accurately identified.Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2022 SEFA closing package was not completed at a level of detail sufficient to properly identify COVID-19 Emergency Acts expenditures.Effect: The Department did not separately identify the COVID-19 Emergency Acts expenditures on their SEFA in order to maximize transparency and accountability. In total, $44,812,369 across 9 programs was not properly identified as COVID-19 Emergency Acts related expenditures, as required.After we identified this issue, the amounts were separated, and the COVID-19 identification was added to the programs in a subsequent submission of SEFA information.Recommendation: We recommend that the Department improve the review process for the SEFA closing package to include training and specific procedures at a level of detail sufficient to identify inaccuracies or omission of required information such as the COVID-19 Emergency Acts expenditures.Management?s View: The Department agrees with this finding but it is important to highlight that our internal controls and review processes are designed to detect and correct material inaccuracies or omissions of required information within the annual SEFA. As this does not constitute a material error, but rather a significant deficiency, the Department?s controls for this process worked as intended.Corrective Action: This corrective action plan is complete. Effective immediately, we will monitor awards for any new COVID-19 funding, but we don?t believe that there will be any new COVID-19 awards. All existing awards have been confirmed as being reported as COVID-19 funding.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit. We would like to emphasize that internal controls should be designed to meet stated objectives. In this case, the objective is to provide requested information to the Office of the State Controller on closing packages that contain specific instructions, so that the Office can prepare the statewide Schedule of Expenditures of Federal Assistance (SEFA). The fact that the internal controls designed and implemented by the Department are only intended to identify material errors in the SEFA closing package significantly increases the risk that individually smaller errors will go undetected and uncorrected and potentially could result in an aggregated material misstatement. Additionally, minimalizing accuracy within reporting elements, such as the COVID-19 designation, increases the risk that these errors would go entirely undetected, even if they were material. We would also like to emphasize that including standard procedures to be alert for changing and new requirements is an important part of a strong internal control environment. While the COVID-19 funds may be in the process of being spent down, new very large programs are in process and could also have unique requirements that should be assessed.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-211The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly identify COVID-19 Emergency Acts expenditures for multiple programs.Related to Prior Finding: 2021-206Type of Finding: Significant Deficiency, Noncompliance, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control GrantsAssistance Listing Number: 10.551; 10.557; 10.561; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023Federal Agency: Department of Agriculture; Department of Education; Health and Human ServicesCompliance Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR 200.510(b) requires the State to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year that must include the total federal awards expended. State agencies are required to report federal expenditures incurred for each federal program during the State fiscal year to the Office of the State Controller (Office) through the SEFA closing package. The Office provides instructions on the completion of the closing package.The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include things like approvals, authorizations, verifications, reconciliations, and segregation of duties.The Office of Management and Budget (OMB) Memorandum 20-26, Appendix A, states that in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify the COVID-19 Emergency Acts expenditures on the SEFA and audit report findings.Condition: The Department did not separately identify COVID-19 Emergency Acts related expenditures, as required by OMB Memorandum 20-26, on their SEFA submission for multiple programs. The specific programs include the following:? Supplemental Nutrition Assistance Program (Assistance Listing Number (AL) 10.551) for the amount of $38,370,588? Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) for the amount of $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL 10.561) for the amount of $354,983? Special Education-Grants for Infants and Families (AL 84.181) for the amount of $265,777? Activities to Support State, Tribal, Local and Territorial Health Department Response to Public Health or Healthcare Crises (AL 93.391) for the amount of $3,387,573? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL 93.497) for the amount of $183,807? Community-Based Child Abuse Prevention Grants (AL 93.590) for the amount of $156,539? Block Grants For Community Mental Health Services (AL 93.958) for the amount of $389,232? Preventive Health Services-Sexually Transmitted Diseases Control Grants (AL 93.977) for the amount of $156,712The total amount of expenditures for each of the above listed programs were accurately reported; however, specific identification of COVID-19 Emergency Acts expenditures was not accurately identified.Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2022 SEFA closing package was not completed at a level of detail sufficient to properly identify COVID-19 Emergency Acts expenditures.Effect: The Department did not separately identify the COVID-19 Emergency Acts expenditures on their SEFA in order to maximize transparency and accountability. In total, $44,812,369 across 9 programs was not properly identified as COVID-19 Emergency Acts related expenditures, as required.After we identified this issue, the amounts were separated, and the COVID-19 identification was added to the programs in a subsequent submission of SEFA information.Recommendation: We recommend that the Department improve the review process for the SEFA closing package to include training and specific procedures at a level of detail sufficient to identify inaccuracies or omission of required information such as the COVID-19 Emergency Acts expenditures.Management?s View: The Department agrees with this finding but it is important to highlight that our internal controls and review processes are designed to detect and correct material inaccuracies or omissions of required information within the annual SEFA. As this does not constitute a material error, but rather a significant deficiency, the Department?s controls for this process worked as intended.Corrective Action: This corrective action plan is complete. Effective immediately, we will monitor awards for any new COVID-19 funding, but we don?t believe that there will be any new COVID-19 awards. All existing awards have been confirmed as being reported as COVID-19 funding.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit. We would like to emphasize that internal controls should be designed to meet stated objectives. In this case, the objective is to provide requested information to the Office of the State Controller on closing packages that contain specific instructions, so that the Office can prepare the statewide Schedule of Expenditures of Federal Assistance (SEFA). The fact that the internal controls designed and implemented by the Department are only intended to identify material errors in the SEFA closing package significantly increases the risk that individually smaller errors will go undetected and uncorrected and potentially could result in an aggregated material misstatement. Additionally, minimalizing accuracy within reporting elements, such as the COVID-19 designation, increases the risk that these errors would go entirely undetected, even if they were material. We would also like to emphasize that including standard procedures to be alert for changing and new requirements is an important part of a strong internal control environment. While the COVID-19 funds may be in the process of being spent down, new very large programs are in process and could also have unique requirements that should be assessed.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-211The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly identify COVID-19 Emergency Acts expenditures for multiple programs.Related to Prior Finding: 2021-206Type of Finding: Significant Deficiency, Noncompliance, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control GrantsAssistance Listing Number: 10.551; 10.557; 10.561; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023Federal Agency: Department of Agriculture; Department of Education; Health and Human ServicesCompliance Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR 200.510(b) requires the State to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year that must include the total federal awards expended. State agencies are required to report federal expenditures incurred for each federal program during the State fiscal year to the Office of the State Controller (Office) through the SEFA closing package. The Office provides instructions on the completion of the closing package.The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include things like approvals, authorizations, verifications, reconciliations, and segregation of duties.The Office of Management and Budget (OMB) Memorandum 20-26, Appendix A, states that in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify the COVID-19 Emergency Acts expenditures on the SEFA and audit report findings.Condition: The Department did not separately identify COVID-19 Emergency Acts related expenditures, as required by OMB Memorandum 20-26, on their SEFA submission for multiple programs. The specific programs include the following:? Supplemental Nutrition Assistance Program (Assistance Listing Number (AL) 10.551) for the amount of $38,370,588? Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) for the amount of $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL 10.561) for the amount of $354,983? Special Education-Grants for Infants and Families (AL 84.181) for the amount of $265,777? Activities to Support State, Tribal, Local and Territorial Health Department Response to Public Health or Healthcare Crises (AL 93.391) for the amount of $3,387,573? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL 93.497) for the amount of $183,807? Community-Based Child Abuse Prevention Grants (AL 93.590) for the amount of $156,539? Block Grants For Community Mental Health Services (AL 93.958) for the amount of $389,232? Preventive Health Services-Sexually Transmitted Diseases Control Grants (AL 93.977) for the amount of $156,712The total amount of expenditures for each of the above listed programs were accurately reported; however, specific identification of COVID-19 Emergency Acts expenditures was not accurately identified.Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2022 SEFA closing package was not completed at a level of detail sufficient to properly identify COVID-19 Emergency Acts expenditures.Effect: The Department did not separately identify the COVID-19 Emergency Acts expenditures on their SEFA in order to maximize transparency and accountability. In total, $44,812,369 across 9 programs was not properly identified as COVID-19 Emergency Acts related expenditures, as required.After we identified this issue, the amounts were separated, and the COVID-19 identification was added to the programs in a subsequent submission of SEFA information.Recommendation: We recommend that the Department improve the review process for the SEFA closing package to include training and specific procedures at a level of detail sufficient to identify inaccuracies or omission of required information such as the COVID-19 Emergency Acts expenditures.Management?s View: The Department agrees with this finding but it is important to highlight that our internal controls and review processes are designed to detect and correct material inaccuracies or omissions of required information within the annual SEFA. As this does not constitute a material error, but rather a significant deficiency, the Department?s controls for this process worked as intended.Corrective Action: This corrective action plan is complete. Effective immediately, we will monitor awards for any new COVID-19 funding, but we don?t believe that there will be any new COVID-19 awards. All existing awards have been confirmed as being reported as COVID-19 funding.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit. We would like to emphasize that internal controls should be designed to meet stated objectives. In this case, the objective is to provide requested information to the Office of the State Controller on closing packages that contain specific instructions, so that the Office can prepare the statewide Schedule of Expenditures of Federal Assistance (SEFA). The fact that the internal controls designed and implemented by the Department are only intended to identify material errors in the SEFA closing package significantly increases the risk that individually smaller errors will go undetected and uncorrected and potentially could result in an aggregated material misstatement. Additionally, minimalizing accuracy within reporting elements, such as the COVID-19 designation, increases the risk that these errors would go entirely undetected, even if they were material. We would also like to emphasize that including standard procedures to be alert for changing and new requirements is an important part of a strong internal control environment. While the COVID-19 funds may be in the process of being spent down, new very large programs are in process and could also have unique requirements that should be assessed.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-211The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly identify COVID-19 Emergency Acts expenditures for multiple programs.Related to Prior Finding: 2021-206Type of Finding: Significant Deficiency, Noncompliance, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control GrantsAssistance Listing Number: 10.551; 10.557; 10.561; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023Federal Agency: Department of Agriculture; Department of Education; Health and Human ServicesCompliance Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR 200.510(b) requires the State to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year that must include the total federal awards expended. State agencies are required to report federal expenditures incurred for each federal program during the State fiscal year to the Office of the State Controller (Office) through the SEFA closing package. The Office provides instructions on the completion of the closing package.The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include things like approvals, authorizations, verifications, reconciliations, and segregation of duties.The Office of Management and Budget (OMB) Memorandum 20-26, Appendix A, states that in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify the COVID-19 Emergency Acts expenditures on the SEFA and audit report findings.Condition: The Department did not separately identify COVID-19 Emergency Acts related expenditures, as required by OMB Memorandum 20-26, on their SEFA submission for multiple programs. The specific programs include the following:? Supplemental Nutrition Assistance Program (Assistance Listing Number (AL) 10.551) for the amount of $38,370,588? Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) for the amount of $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL 10.561) for the amount of $354,983? Special Education-Grants for Infants and Families (AL 84.181) for the amount of $265,777? Activities to Support State, Tribal, Local and Territorial Health Department Response to Public Health or Healthcare Crises (AL 93.391) for the amount of $3,387,573? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL 93.497) for the amount of $183,807? Community-Based Child Abuse Prevention Grants (AL 93.590) for the amount of $156,539? Block Grants For Community Mental Health Services (AL 93.958) for the amount of $389,232? Preventive Health Services-Sexually Transmitted Diseases Control Grants (AL 93.977) for the amount of $156,712The total amount of expenditures for each of the above listed programs were accurately reported; however, specific identification of COVID-19 Emergency Acts expenditures was not accurately identified.Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2022 SEFA closing package was not completed at a level of detail sufficient to properly identify COVID-19 Emergency Acts expenditures.Effect: The Department did not separately identify the COVID-19 Emergency Acts expenditures on their SEFA in order to maximize transparency and accountability. In total, $44,812,369 across 9 programs was not properly identified as COVID-19 Emergency Acts related expenditures, as required.After we identified this issue, the amounts were separated, and the COVID-19 identification was added to the programs in a subsequent submission of SEFA information.Recommendation: We recommend that the Department improve the review process for the SEFA closing package to include training and specific procedures at a level of detail sufficient to identify inaccuracies or omission of required information such as the COVID-19 Emergency Acts expenditures.Management?s View: The Department agrees with this finding but it is important to highlight that our internal controls and review processes are designed to detect and correct material inaccuracies or omissions of required information within the annual SEFA. As this does not constitute a material error, but rather a significant deficiency, the Department?s controls for this process worked as intended.Corrective Action: This corrective action plan is complete. Effective immediately, we will monitor awards for any new COVID-19 funding, but we don?t believe that there will be any new COVID-19 awards. All existing awards have been confirmed as being reported as COVID-19 funding.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit. We would like to emphasize that internal controls should be designed to meet stated objectives. In this case, the objective is to provide requested information to the Office of the State Controller on closing packages that contain specific instructions, so that the Office can prepare the statewide Schedule of Expenditures of Federal Assistance (SEFA). The fact that the internal controls designed and implemented by the Department are only intended to identify material errors in the SEFA closing package significantly increases the risk that individually smaller errors will go undetected and uncorrected and potentially could result in an aggregated material misstatement. Additionally, minimalizing accuracy within reporting elements, such as the COVID-19 designation, increases the risk that these errors would go entirely undetected, even if they were material. We would also like to emphasize that including standard procedures to be alert for changing and new requirements is an important part of a strong internal control environment. While the COVID-19 funds may be in the process of being spent down, new very large programs are in process and could also have unique requirements that should be assessed.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-211The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly identify COVID-19 Emergency Acts expenditures for multiple programs.Related to Prior Finding: 2021-206Type of Finding: Significant Deficiency, Noncompliance, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control GrantsAssistance Listing Number: 10.551; 10.557; 10.561; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023Federal Agency: Department of Agriculture; Department of Education; Health and Human ServicesCompliance Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR 200.510(b) requires the State to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year that must include the total federal awards expended. State agencies are required to report federal expenditures incurred for each federal program during the State fiscal year to the Office of the State Controller (Office) through the SEFA closing package. The Office provides instructions on the completion of the closing package.The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include things like approvals, authorizations, verifications, reconciliations, and segregation of duties.The Office of Management and Budget (OMB) Memorandum 20-26, Appendix A, states that in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify the COVID-19 Emergency Acts expenditures on the SEFA and audit report findings.Condition: The Department did not separately identify COVID-19 Emergency Acts related expenditures, as required by OMB Memorandum 20-26, on their SEFA submission for multiple programs. The specific programs include the following:? Supplemental Nutrition Assistance Program (Assistance Listing Number (AL) 10.551) for the amount of $38,370,588? Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) for the amount of $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL 10.561) for the amount of $354,983? Special Education-Grants for Infants and Families (AL 84.181) for the amount of $265,777? Activities to Support State, Tribal, Local and Territorial Health Department Response to Public Health or Healthcare Crises (AL 93.391) for the amount of $3,387,573? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL 93.497) for the amount of $183,807? Community-Based Child Abuse Prevention Grants (AL 93.590) for the amount of $156,539? Block Grants For Community Mental Health Services (AL 93.958) for the amount of $389,232? Preventive Health Services-Sexually Transmitted Diseases Control Grants (AL 93.977) for the amount of $156,712The total amount of expenditures for each of the above listed programs were accurately reported; however, specific identification of COVID-19 Emergency Acts expenditures was not accurately identified.Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2022 SEFA closing package was not completed at a level of detail sufficient to properly identify COVID-19 Emergency Acts expenditures.Effect: The Department did not separately identify the COVID-19 Emergency Acts expenditures on their SEFA in order to maximize transparency and accountability. In total, $44,812,369 across 9 programs was not properly identified as COVID-19 Emergency Acts related expenditures, as required.After we identified this issue, the amounts were separated, and the COVID-19 identification was added to the programs in a subsequent submission of SEFA information.Recommendation: We recommend that the Department improve the review process for the SEFA closing package to include training and specific procedures at a level of detail sufficient to identify inaccuracies or omission of required information such as the COVID-19 Emergency Acts expenditures.Management?s View: The Department agrees with this finding but it is important to highlight that our internal controls and review processes are designed to detect and correct material inaccuracies or omissions of required information within the annual SEFA. As this does not constitute a material error, but rather a significant deficiency, the Department?s controls for this process worked as intended.Corrective Action: This corrective action plan is complete. Effective immediately, we will monitor awards for any new COVID-19 funding, but we don?t believe that there will be any new COVID-19 awards. All existing awards have been confirmed as being reported as COVID-19 funding.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit. We would like to emphasize that internal controls should be designed to meet stated objectives. In this case, the objective is to provide requested information to the Office of the State Controller on closing packages that contain specific instructions, so that the Office can prepare the statewide Schedule of Expenditures of Federal Assistance (SEFA). The fact that the internal controls designed and implemented by the Department are only intended to identify material errors in the SEFA closing package significantly increases the risk that individually smaller errors will go undetected and uncorrected and potentially could result in an aggregated material misstatement. Additionally, minimalizing accuracy within reporting elements, such as the COVID-19 designation, increases the risk that these errors would go entirely undetected, even if they were material. We would also like to emphasize that including standard procedures to be alert for changing and new requirements is an important part of a strong internal control environment. While the COVID-19 funds may be in the process of being spent down, new very large programs are in process and could also have unique requirements that should be assessed.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-211The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly identify COVID-19 Emergency Acts expenditures for multiple programs.Related to Prior Finding: 2021-206Type of Finding: Significant Deficiency, Noncompliance, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control GrantsAssistance Listing Number: 10.551; 10.557; 10.561; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023Federal Agency: Department of Agriculture; Department of Education; Health and Human ServicesCompliance Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR 200.510(b) requires the State to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year that must include the total federal awards expended. State agencies are required to report federal expenditures incurred for each federal program during the State fiscal year to the Office of the State Controller (Office) through the SEFA closing package. The Office provides instructions on the completion of the closing package.The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include things like approvals, authorizations, verifications, reconciliations, and segregation of duties.The Office of Management and Budget (OMB) Memorandum 20-26, Appendix A, states that in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify the COVID-19 Emergency Acts expenditures on the SEFA and audit report findings.Condition: The Department did not separately identify COVID-19 Emergency Acts related expenditures, as required by OMB Memorandum 20-26, on their SEFA submission for multiple programs. The specific programs include the following:? Supplemental Nutrition Assistance Program (Assistance Listing Number (AL) 10.551) for the amount of $38,370,588? Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) for the amount of $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL 10.561) for the amount of $354,983? Special Education-Grants for Infants and Families (AL 84.181) for the amount of $265,777? Activities to Support State, Tribal, Local and Territorial Health Department Response to Public Health or Healthcare Crises (AL 93.391) for the amount of $3,387,573? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL 93.497) for the amount of $183,807? Community-Based Child Abuse Prevention Grants (AL 93.590) for the amount of $156,539? Block Grants For Community Mental Health Services (AL 93.958) for the amount of $389,232? Preventive Health Services-Sexually Transmitted Diseases Control Grants (AL 93.977) for the amount of $156,712The total amount of expenditures for each of the above listed programs were accurately reported; however, specific identification of COVID-19 Emergency Acts expenditures was not accurately identified.Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2022 SEFA closing package was not completed at a level of detail sufficient to properly identify COVID-19 Emergency Acts expenditures.Effect: The Department did not separately identify the COVID-19 Emergency Acts expenditures on their SEFA in order to maximize transparency and accountability. In total, $44,812,369 across 9 programs was not properly identified as COVID-19 Emergency Acts related expenditures, as required.After we identified this issue, the amounts were separated, and the COVID-19 identification was added to the programs in a subsequent submission of SEFA information.Recommendation: We recommend that the Department improve the review process for the SEFA closing package to include training and specific procedures at a level of detail sufficient to identify inaccuracies or omission of required information such as the COVID-19 Emergency Acts expenditures.Management?s View: The Department agrees with this finding but it is important to highlight that our internal controls and review processes are designed to detect and correct material inaccuracies or omissions of required information within the annual SEFA. As this does not constitute a material error, but rather a significant deficiency, the Department?s controls for this process worked as intended.Corrective Action: This corrective action plan is complete. Effective immediately, we will monitor awards for any new COVID-19 funding, but we don?t believe that there will be any new COVID-19 awards. All existing awards have been confirmed as being reported as COVID-19 funding.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit. We would like to emphasize that internal controls should be designed to meet stated objectives. In this case, the objective is to provide requested information to the Office of the State Controller on closing packages that contain specific instructions, so that the Office can prepare the statewide Schedule of Expenditures of Federal Assistance (SEFA). The fact that the internal controls designed and implemented by the Department are only intended to identify material errors in the SEFA closing package significantly increases the risk that individually smaller errors will go undetected and uncorrected and potentially could result in an aggregated material misstatement. Additionally, minimalizing accuracy within reporting elements, such as the COVID-19 designation, increases the risk that these errors would go entirely undetected, even if they were material. We would also like to emphasize that including standard procedures to be alert for changing and new requirements is an important part of a strong internal control environment. While the COVID-19 funds may be in the process of being spent down, new very large programs are in process and could also have unique requirements that should be assessed.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-211The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly identify COVID-19 Emergency Acts expenditures for multiple programs.Related to Prior Finding: 2021-206Type of Finding: Significant Deficiency, Noncompliance, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control GrantsAssistance Listing Number: 10.551; 10.557; 10.561; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023Federal Agency: Department of Agriculture; Department of Education; Health and Human ServicesCompliance Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR 200.510(b) requires the State to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year that must include the total federal awards expended. State agencies are required to report federal expenditures incurred for each federal program during the State fiscal year to the Office of the State Controller (Office) through the SEFA closing package. The Office provides instructions on the completion of the closing package.The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include things like approvals, authorizations, verifications, reconciliations, and segregation of duties.The Office of Management and Budget (OMB) Memorandum 20-26, Appendix A, states that in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify the COVID-19 Emergency Acts expenditures on the SEFA and audit report findings.Condition: The Department did not separately identify COVID-19 Emergency Acts related expenditures, as required by OMB Memorandum 20-26, on their SEFA submission for multiple programs. The specific programs include the following:? Supplemental Nutrition Assistance Program (Assistance Listing Number (AL) 10.551) for the amount of $38,370,588? Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) for the amount of $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL 10.561) for the amount of $354,983? Special Education-Grants for Infants and Families (AL 84.181) for the amount of $265,777? Activities to Support State, Tribal, Local and Territorial Health Department Response to Public Health or Healthcare Crises (AL 93.391) for the amount of $3,387,573? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL 93.497) for the amount of $183,807? Community-Based Child Abuse Prevention Grants (AL 93.590) for the amount of $156,539? Block Grants For Community Mental Health Services (AL 93.958) for the amount of $389,232? Preventive Health Services-Sexually Transmitted Diseases Control Grants (AL 93.977) for the amount of $156,712The total amount of expenditures for each of the above listed programs were accurately reported; however, specific identification of COVID-19 Emergency Acts expenditures was not accurately identified.Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2022 SEFA closing package was not completed at a level of detail sufficient to properly identify COVID-19 Emergency Acts expenditures.Effect: The Department did not separately identify the COVID-19 Emergency Acts expenditures on their SEFA in order to maximize transparency and accountability. In total, $44,812,369 across 9 programs was not properly identified as COVID-19 Emergency Acts related expenditures, as required.After we identified this issue, the amounts were separated, and the COVID-19 identification was added to the programs in a subsequent submission of SEFA information.Recommendation: We recommend that the Department improve the review process for the SEFA closing package to include training and specific procedures at a level of detail sufficient to identify inaccuracies or omission of required information such as the COVID-19 Emergency Acts expenditures.Management?s View: The Department agrees with this finding but it is important to highlight that our internal controls and review processes are designed to detect and correct material inaccuracies or omissions of required information within the annual SEFA. As this does not constitute a material error, but rather a significant deficiency, the Department?s controls for this process worked as intended.Corrective Action: This corrective action plan is complete. Effective immediately, we will monitor awards for any new COVID-19 funding, but we don?t believe that there will be any new COVID-19 awards. All existing awards have been confirmed as being reported as COVID-19 funding.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit. We would like to emphasize that internal controls should be designed to meet stated objectives. In this case, the objective is to provide requested information to the Office of the State Controller on closing packages that contain specific instructions, so that the Office can prepare the statewide Schedule of Expenditures of Federal Assistance (SEFA). The fact that the internal controls designed and implemented by the Department are only intended to identify material errors in the SEFA closing package significantly increases the risk that individually smaller errors will go undetected and uncorrected and potentially could result in an aggregated material misstatement. Additionally, minimalizing accuracy within reporting elements, such as the COVID-19 designation, increases the risk that these errors would go entirely undetected, even if they were material. We would also like to emphasize that including standard procedures to be alert for changing and new requirements is an important part of a strong internal control environment. While the COVID-19 funds may be in the process of being spent down, new very large programs are in process and could also have unique requirements that should be assessed.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
FINDING 2022-211The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly identify COVID-19 Emergency Acts expenditures for multiple programs.Related to Prior Finding: 2021-206Type of Finding: Significant Deficiency, Noncompliance, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control GrantsAssistance Listing Number: 10.551; 10.557; 10.561; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023Federal Agency: Department of Agriculture; Department of Education; Health and Human ServicesCompliance Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The U.S. Code of Federal Regulations (CFR) 2 CFR 200.510(b) requires the State to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year that must include the total federal awards expended. State agencies are required to report federal expenditures incurred for each federal program during the State fiscal year to the Office of the State Controller (Office) through the SEFA closing package. The Office provides instructions on the completion of the closing package.The Uniform Guidance included in 2 CFR 200.303 requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award.The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include things like approvals, authorizations, verifications, reconciliations, and segregation of duties.The Office of Management and Budget (OMB) Memorandum 20-26, Appendix A, states that in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify the COVID-19 Emergency Acts expenditures on the SEFA and audit report findings.Condition: The Department did not separately identify COVID-19 Emergency Acts related expenditures, as required by OMB Memorandum 20-26, on their SEFA submission for multiple programs. The specific programs include the following:? Supplemental Nutrition Assistance Program (Assistance Listing Number (AL) 10.551) for the amount of $38,370,588? Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) for the amount of $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL 10.561) for the amount of $354,983? Special Education-Grants for Infants and Families (AL 84.181) for the amount of $265,777? Activities to Support State, Tribal, Local and Territorial Health Department Response to Public Health or Healthcare Crises (AL 93.391) for the amount of $3,387,573? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL 93.497) for the amount of $183,807? Community-Based Child Abuse Prevention Grants (AL 93.590) for the amount of $156,539? Block Grants For Community Mental Health Services (AL 93.958) for the amount of $389,232? Preventive Health Services-Sexually Transmitted Diseases Control Grants (AL 93.977) for the amount of $156,712The total amount of expenditures for each of the above listed programs were accurately reported; however, specific identification of COVID-19 Emergency Acts expenditures was not accurately identified.Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2022 SEFA closing package was not completed at a level of detail sufficient to properly identify COVID-19 Emergency Acts expenditures.Effect: The Department did not separately identify the COVID-19 Emergency Acts expenditures on their SEFA in order to maximize transparency and accountability. In total, $44,812,369 across 9 programs was not properly identified as COVID-19 Emergency Acts related expenditures, as required.After we identified this issue, the amounts were separated, and the COVID-19 identification was added to the programs in a subsequent submission of SEFA information.Recommendation: We recommend that the Department improve the review process for the SEFA closing package to include training and specific procedures at a level of detail sufficient to identify inaccuracies or omission of required information such as the COVID-19 Emergency Acts expenditures.Management?s View: The Department agrees with this finding but it is important to highlight that our internal controls and review processes are designed to detect and correct material inaccuracies or omissions of required information within the annual SEFA. As this does not constitute a material error, but rather a significant deficiency, the Department?s controls for this process worked as intended.Corrective Action: This corrective action plan is complete. Effective immediately, we will monitor awards for any new COVID-19 funding, but we don?t believe that there will be any new COVID-19 awards. All existing awards have been confirmed as being reported as COVID-19 funding.Auditor?s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit. We would like to emphasize that internal controls should be designed to meet stated objectives. In this case, the objective is to provide requested information to the Office of the State Controller on closing packages that contain specific instructions, so that the Office can prepare the statewide Schedule of Expenditures of Federal Assistance (SEFA). The fact that the internal controls designed and implemented by the Department are only intended to identify material errors in the SEFA closing package significantly increases the risk that individually smaller errors will go undetected and uncorrected and potentially could result in an aggregated material misstatement. Additionally, minimalizing accuracy within reporting elements, such as the COVID-19 designation, increases the risk that these errors would go entirely undetected, even if they were material. We would also like to emphasize that including standard procedures to be alert for changing and new requirements is an important part of a strong internal control environment. While the COVID-19 funds may be in the process of being spent down, new very large programs are in process and could also have unique requirements that should be assessed.
FINDING 2022-204COVID-19 funds in the amount of $196,247,971 were not properly identified on the statewide Schedule of Expenditures of Federal Awards (SEFA), as required.Type of Finding: Noncompliance, Material Weakness, SEFA MisstatementAssistance Listing Title: Supplemental Nutrition Assistance Program (SNAP); WIC Special Supplemental Nutrition Program for Women, Infants, and Children; State Administrative Matching Grants for the Supplemental Nutrition Assistance Program; Grants to States for Construction of State Home Facilities; Special Education - Grants for Infants and Families; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises; Community-Based Child Abuse Prevention Grants; Block Grants for Community Mental Health Services; Sexually Transmitted Diseases (STD) Prevention and Control Grants; Disaster Grants ? Public Assistance (Presidentially Declared Disasters)Assistance Listing Number: 10.551; 10.557; 10.561; 64.005; 84.181; 93.391; 93.497; 93.590; 93.958; 93.977; 97.036Federal Award Number: 22ID35051692301; 217IDID7W7003; 227IDID7F1003; FAI 16-012; FAI 16-013; H181X21016; NH75OT000105; 2202IDFSC6; 2101IDBCC6; B09SM083970; NH25PS005171; 4534DRIP00000001Program Year: October 1, 2021 ? September 30, 2022; October 1, 2020 ? September 30, 2021; October 1, 2021 ? September 30, 2021; May 8, 2021 ? June 30, 2022; June 28, 2021 ? June 30, 2022; July 1, 2021 ? September 30, 2022; June 1, 2021 ? May 31, 2023; October 1, 2020 ? September 30, 2025; October 1, 2020 ? September 30, 2025; March 15, 2021 ? March 14, 2023; January 1, 2019 ? December 31, 2023; May 8, 2020 ? June 30, 2022Federal Agency: Department of Agriculture; Department of Veterans Affairs; Department of Education; Health and Human Services; Department of Homeland SecurityCompliance Requirement: Code of Federal Regulations (CRF) 2 CFR 200.510(b)Questioned Costs: NoneCriteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives.Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR ?200.510(b)), which states it must include:? Total federal awards expended as determined in accordance with 2 CFR ?200.502? Total amount provided to subrecipients from each federal programAdditionally, the Office of Management and Budget (OMB) Memorandum M-20-26 instructed recipients and subrecipients to separately identify the COVID-19 Emergency Acts expenditures on the SEFA.Condition: Several assistance listings (AL) were not properly identified as COVID-19 funds on the SEFA submitted for audit. The following items were identified by the auditors and communicated to management during the audit process:? Supplemental Nutrition Assistance Program (AL Number 10.551) $38,370,588? Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (AL Number 93.391) $3,387,573? Special Education - Grants for Infants and Families (AL Number 84.181) $265,777? Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and Supports (AL Number 93.497) $183,807? WIC Special Supplemental Nutrition Program for Women, Infants, and Children (AL Number 10.557) $1,547,158? State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (AL Number 10.561) $354,983? Community-Based Child Abuse Prevention Grants (AL Number 93.590) $156,539? Block Grants for Community Mental Health Services (AL Number 93.958) $389,232? Sexually Transmitted Diseases (STD) Prevention and Control Grants (AL Number 93.977) $156,712? State Veterans Home Construction (AL Number 64.005) $1,513,996? Education Stabilization Fund - Emergency Assistance for Non-Public Schools (AL Number 84.425R) $3,145,463? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (AL Number 97.036) $146,776,143Cause: The Office has not developed procedures to ensure amounts reported by State agencies on closing packages properly identifies all funds related to COVID-19. The Office relies on State agencies to self-report federal expenditures, programs, and identify if these programs are related to COVID-19 funding through the closing package process. Current procedures do not include verifying that the COVID-19 designation is appropriately included.Additionally, review procedures did not identify an error that occurred while compiling the SEFA that did not include the COVID-19 designation for AL Number 84.425R. Internal reviews did not identify this error as this information was correctly included on the agency closing package.Effect: The SEFA submitted for audit did not properly identify $196,247,971 as COVID-19 funds on the SEFA; however, these errors have been corrected.Recommendation: We recommend that the Office implement procedures and controls to ensure funds related to the COVID-19 pandemic are properly identified on the SEFA.Management?s View: The Office agrees with this finding.Corrective Action: Since the State began receiving COVID-19 funding, we diligently provided training and resources to the agencies regarding the funding and how it should be reported on the SEFA closing package. This includes a discussion in our annual closing package training, online resources regarding COVID-19 funds, an FAQ document, and being available to discuss questions and concerns. In addition to the steps we are currently taking, we will reiterate the importance of designating COVID-19 related expenditures on the SEFA closing package during our annual closing package training. We will review STARS activity in the COVID-19 related funds and compare to the agency submitted closing packages for reasonableness. Recognizing that not all agencies utilize these specific funds, we will also review COVID-19 related expenditures on an external online source that reports federal grant expenditures. We will then use this information to compare to what is reported on agency closing packages for reasonableness.Auditor?s Concluding Remarks: We thank the Office for its cooperation and assistance throughout the audit.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
2022-002 ? Preparation of the Schedule of Expenditures of Federal AwardsIdentification of the Federal Program:United States Department of Health and Human ServicesAssistance Listing Numbers:93.650 Accountable Health Communities93.558 Temporary Assistance for Needy Families93.667 Social Services Block Grant93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers93.052 National Family Caregiver Support, Title III, Part E93.268 Immunization Cooperative AgreementsUnited States Department of Housing and Urban DevelopmentAssistance Listing Number: 14.218 Community Development Block GrantsUnited States Department of TreasuryAssistance Listing Number: 21.019 Coronavirus Relief FundUnited States Department of Homeland SecurityAssistance Listing Number: 97.024 Emergency Food and ShelterCriteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 `Basis for Determining Federal awards expended?. The schedule must provide total Federal awards expended for each individual Federal program.Condition ? During management?s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization uses cost center reports that identify Federal dollars spent throughout the year.The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered.The SEFA originally prepared by management was reported on the basis of cash received by Federal Programs, instead of the accrual basis of accounting, which is consistent with the presentation of the financial statements. After management adjusted the SEFA to reflect total expenditures of federal awards, the amount on the SEFA decreased by $52,688.Cause: The internal controls established for the review and approval for the SEFA to ensure its completeness and accuracy did not operate as designed.Effect: The SEFA provided for the audit was inaccurate for the reason outlined in the condition section above. Failure to accurately report expenditures and programs on the SEFA result in audit adjustments.Questioned Costs: There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports.Context: The conditions outlined above are based on our testing of the Organization?s major programs and our overall testing of the accuracy of the SEFA. The nature of this finding is detailed in the condition section above.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Organization ensure its policies and procedures are followed on a consistent basis. This will ensure that Federal funds are reported accurately on the SEFA.Views of Responsible Officials: The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.
Federal Program Special Education Cluster - Passed through the Berks County Intermediate Unit ALNs 84.027 and 84.173 Education Stabilization Fund - Passed through the Pennsylvania Department of Education ALN 84.425 Criteria Per the Uniform Guidance 2 CFR 200.510, the auditee is required to prepare a schedule of expenditures of federal awards (SEFA). Condition The District prepared a SEFA and provided information relating to the federal programs including grant agreements and other supporting documentation. However, the SEFA prepared by the auditee required material adjustments as a result of audit procedures. Cause The District had turnover in the assistant business manager and other business office positions during and subsequent to year end. As a result of the turnover, certain account reconciliations were not performed prior to the audit, which included amounts reported on the SEFA. Effect Amounts reported on the SEFA provided by the auditee were not accurate. The SEFA was subsequently updated through audit procedures, including inquiry and review of grant documentation of awards received and amounts expended. Questioned Costs None. Context A SEFA was prepared by management; however, several adjustments were required in order for the schedule to accurately reflect the current year activity. Repeat Finding No. Recommendation In order to meet Uniform Guidance requirements, the District should prepare the SEFA from the grant award documentation and any other relevant information including the assistance listing numbers, grant award amounts, grant amounts received, grant amounts expended, and grant revenue recorded. The amounts reported in the SEFA should reconcile to the general ledger. Management Response See corrective action plan included in this report package.
Federal Program Special Education Cluster - Passed through the Berks County Intermediate Unit ALNs 84.027 and 84.173 Education Stabilization Fund - Passed through the Pennsylvania Department of Education ALN 84.425 Criteria Per the Uniform Guidance 2 CFR 200.510, the auditee is required to prepare a schedule of expenditures of federal awards (SEFA). Condition The District prepared a SEFA and provided information relating to the federal programs including grant agreements and other supporting documentation. However, the SEFA prepared by the auditee required material adjustments as a result of audit procedures. Cause The District had turnover in the assistant business manager and other business office positions during and subsequent to year end. As a result of the turnover, certain account reconciliations were not performed prior to the audit, which included amounts reported on the SEFA. Effect Amounts reported on the SEFA provided by the auditee were not accurate. The SEFA was subsequently updated through audit procedures, including inquiry and review of grant documentation of awards received and amounts expended. Questioned Costs None. Context A SEFA was prepared by management; however, several adjustments were required in order for the schedule to accurately reflect the current year activity. Repeat Finding No. Recommendation In order to meet Uniform Guidance requirements, the District should prepare the SEFA from the grant award documentation and any other relevant information including the assistance listing numbers, grant award amounts, grant amounts received, grant amounts expended, and grant revenue recorded. The amounts reported in the SEFA should reconcile to the general ledger. Management Response See corrective action plan included in this report package.
Federal Program Special Education Cluster - Passed through the Berks County Intermediate Unit ALNs 84.027 and 84.173 Education Stabilization Fund - Passed through the Pennsylvania Department of Education ALN 84.425 Criteria Per the Uniform Guidance 2 CFR 200.510, the auditee is required to prepare a schedule of expenditures of federal awards (SEFA). Condition The District prepared a SEFA and provided information relating to the federal programs including grant agreements and other supporting documentation. However, the SEFA prepared by the auditee required material adjustments as a result of audit procedures. Cause The District had turnover in the assistant business manager and other business office positions during and subsequent to year end. As a result of the turnover, certain account reconciliations were not performed prior to the audit, which included amounts reported on the SEFA. Effect Amounts reported on the SEFA provided by the auditee were not accurate. The SEFA was subsequently updated through audit procedures, including inquiry and review of grant documentation of awards received and amounts expended. Questioned Costs None. Context A SEFA was prepared by management; however, several adjustments were required in order for the schedule to accurately reflect the current year activity. Repeat Finding No. Recommendation In order to meet Uniform Guidance requirements, the District should prepare the SEFA from the grant award documentation and any other relevant information including the assistance listing numbers, grant award amounts, grant amounts received, grant amounts expended, and grant revenue recorded. The amounts reported in the SEFA should reconcile to the general ledger. Management Response See corrective action plan included in this report package.
Federal Program Special Education Cluster - Passed through the Berks County Intermediate Unit ALNs 84.027 and 84.173 Education Stabilization Fund - Passed through the Pennsylvania Department of Education ALN 84.425 Criteria Per the Uniform Guidance 2 CFR 200.510, the auditee is required to prepare a schedule of expenditures of federal awards (SEFA). Condition The District prepared a SEFA and provided information relating to the federal programs including grant agreements and other supporting documentation. However, the SEFA prepared by the auditee required material adjustments as a result of audit procedures. Cause The District had turnover in the assistant business manager and other business office positions during and subsequent to year end. As a result of the turnover, certain account reconciliations were not performed prior to the audit, which included amounts reported on the SEFA. Effect Amounts reported on the SEFA provided by the auditee were not accurate. The SEFA was subsequently updated through audit procedures, including inquiry and review of grant documentation of awards received and amounts expended. Questioned Costs None. Context A SEFA was prepared by management; however, several adjustments were required in order for the schedule to accurately reflect the current year activity. Repeat Finding No. Recommendation In order to meet Uniform Guidance requirements, the District should prepare the SEFA from the grant award documentation and any other relevant information including the assistance listing numbers, grant award amounts, grant amounts received, grant amounts expended, and grant revenue recorded. The amounts reported in the SEFA should reconcile to the general ledger. Management Response See corrective action plan included in this report package.
Federal Program Special Education Cluster - Passed through the Berks County Intermediate Unit ALNs 84.027 and 84.173 Education Stabilization Fund - Passed through the Pennsylvania Department of Education ALN 84.425 Criteria Per the Uniform Guidance 2 CFR 200.510, the auditee is required to prepare a schedule of expenditures of federal awards (SEFA). Condition The District prepared a SEFA and provided information relating to the federal programs including grant agreements and other supporting documentation. However, the SEFA prepared by the auditee required material adjustments as a result of audit procedures. Cause The District had turnover in the assistant business manager and other business office positions during and subsequent to year end. As a result of the turnover, certain account reconciliations were not performed prior to the audit, which included amounts reported on the SEFA. Effect Amounts reported on the SEFA provided by the auditee were not accurate. The SEFA was subsequently updated through audit procedures, including inquiry and review of grant documentation of awards received and amounts expended. Questioned Costs None. Context A SEFA was prepared by management; however, several adjustments were required in order for the schedule to accurately reflect the current year activity. Repeat Finding No. Recommendation In order to meet Uniform Guidance requirements, the District should prepare the SEFA from the grant award documentation and any other relevant information including the assistance listing numbers, grant award amounts, grant amounts received, grant amounts expended, and grant revenue recorded. The amounts reported in the SEFA should reconcile to the general ledger. Management Response See corrective action plan included in this report package.
Federal Program Special Education Cluster - Passed through the Berks County Intermediate Unit ALNs 84.027 and 84.173 Education Stabilization Fund - Passed through the Pennsylvania Department of Education ALN 84.425 Criteria Per the Uniform Guidance 2 CFR 200.510, the auditee is required to prepare a schedule of expenditures of federal awards (SEFA). Condition The District prepared a SEFA and provided information relating to the federal programs including grant agreements and other supporting documentation. However, the SEFA prepared by the auditee required material adjustments as a result of audit procedures. Cause The District had turnover in the assistant business manager and other business office positions during and subsequent to year end. As a result of the turnover, certain account reconciliations were not performed prior to the audit, which included amounts reported on the SEFA. Effect Amounts reported on the SEFA provided by the auditee were not accurate. The SEFA was subsequently updated through audit procedures, including inquiry and review of grant documentation of awards received and amounts expended. Questioned Costs None. Context A SEFA was prepared by management; however, several adjustments were required in order for the schedule to accurately reflect the current year activity. Repeat Finding No. Recommendation In order to meet Uniform Guidance requirements, the District should prepare the SEFA from the grant award documentation and any other relevant information including the assistance listing numbers, grant award amounts, grant amounts received, grant amounts expended, and grant revenue recorded. The amounts reported in the SEFA should reconcile to the general ledger. Management Response See corrective action plan included in this report package.
Federal Program Special Education Cluster - Passed through the Berks County Intermediate Unit ALNs 84.027 and 84.173 Education Stabilization Fund - Passed through the Pennsylvania Department of Education ALN 84.425 Criteria Per the Uniform Guidance 2 CFR 200.510, the auditee is required to prepare a schedule of expenditures of federal awards (SEFA). Condition The District prepared a SEFA and provided information relating to the federal programs including grant agreements and other supporting documentation. However, the SEFA prepared by the auditee required material adjustments as a result of audit procedures. Cause The District had turnover in the assistant business manager and other business office positions during and subsequent to year end. As a result of the turnover, certain account reconciliations were not performed prior to the audit, which included amounts reported on the SEFA. Effect Amounts reported on the SEFA provided by the auditee were not accurate. The SEFA was subsequently updated through audit procedures, including inquiry and review of grant documentation of awards received and amounts expended. Questioned Costs None. Context A SEFA was prepared by management; however, several adjustments were required in order for the schedule to accurately reflect the current year activity. Repeat Finding No. Recommendation In order to meet Uniform Guidance requirements, the District should prepare the SEFA from the grant award documentation and any other relevant information including the assistance listing numbers, grant award amounts, grant amounts received, grant amounts expended, and grant revenue recorded. The amounts reported in the SEFA should reconcile to the general ledger. Management Response See corrective action plan included in this report package.
Condition : 2 CFR 200.510(b) requires the auditee to prepare the schedule of federal awards (SEFA). Criteria: On the original SEFA provided for the audit, one of the funded programs was categorized under 14.218 rather than 14.231 which resulted in a restatement of the SEFA. Cause: This was an adminsitative oversight. Effect: The SEFA was inaccurate. Recomendation: The Organization should implement controls and a level of review to ensure the correct classification of all grants. Views of Responsible Officials and Planned Corrective Actions: The Organization will review its procedures and make appropriate changes. The Organization accepts the recommendation.
Condition : 2 CFR 200.510(b) requires the auditee to prepare the schedule of federal awards (SEFA). Criteria: On the original SEFA provided for the audit, one of the funded programs was categorized under 14.218 rather than 14.231 which resulted in a restatement of the SEFA. Cause: This was an adminsitative oversight. Effect: The SEFA was inaccurate. Recomendation: The Organization should implement controls and a level of review to ensure the correct classification of all grants. Views of Responsible Officials and Planned Corrective Actions: The Organization will review its procedures and make appropriate changes. The Organization accepts the recommendation.