FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
FINDING 2023-208 The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Related to Prior Finding: 2022-211; 2021-206 Type of Finding: Significant Deficiency, SEFA Misstatement Assistance Listing Title: Supplemental Nutrition Assistance Program; Coronavirus State and Local Fiscal Recovery Funds; Guardianship Assistance; Temporary Assistance for Needy Families; Child Support Enforcement; Child Care and Development Block Grant; Foster Care Title IV-E; Adoption Assistance; Child Care and Development Block Grant (CCDF); Social Services Block Grant; Children's Health Insurance Program; Medical Assistance Program; Money Follows the Person Rebalancing Demonstration; Block Grants for Community Mental Health Services Assistance Listing Number: 10.561; 21.027; 93.090; 93.558; 93.563; 93.575; 93.658; 93.659; 93.667; 93.767; 93.778; 93.791; 93.958 Federal Award Number: Various Program Year: Various Federal Agency: Various Compliance Requirement: U.S. Code of Federal Regulations Questioned Costs: None Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a basis for organizations to design internal control procedures to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Components of this framework include risk assessment, control activities, and information and communication. Risk assessment is the identification and analysis of various risks entities face because of changing economic, industry, regulatory, and operating conditions, and provides a basis to develop appropriate responses to manage those risks. Control activities are policies and procedures that help ensure management directives are carried out and risks are mitigated. Verifications, approvals, reconciliations, authorizations, and segregation of duties are all control activities that support this objective. Information and communication relate to obtaining quality information and effective internal and external communication of that information to achieve management objectives. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in the U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2 CFR §200.510(b)), which states it must include: • Total federal awards expended as determined in accordance with 2 CFR §200.502, and • Total amount provided to subrecipients from each federal program in accordance with 2 CFR 200.510(b)(4) The requirements included in 2 CFR 200.303 require that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. The Office requires agencies to complete the SEFA closing package and uses this information to compile the statewide SEFA. Condition: The Department submitted multiple revisions of the fiscal year 2023 SEFA closing package to correct errors identified by the auditors and communicated to management during the audit process. The original submission included misstatements for the following programs: • Overstatement of $144,460 for the Supplemental Nutrition Assistance Program (Assistance Listing (AL) number 10.561) • Overstatement of $933 for the Guardianship Assistance program (AL 93.090) • Understatement of $1,300,232 for the Temporary Assistance for Needy Families program (AL 93.558) • Understatement of $230,034 for the Child Support Enforcement program (AL 93.563) • Understatement of $42,349 for the Foster Care Title IV-E program (AL 93.658) • Overstatement of $16,112 for the Adoption Assistance program (AL 93.659) • Overstatement of $1,036,549 for the Social Services Block Grant program (AL 93.667) • Overstatement of $3,469,677 for the Children's Health Insurance Program (AL 93.767) • Understatement of $25,108,923 for the Medical Assistance program (AL 93.778) • Understatement of $48,071 for the Money Follows the Person Rebalancing Demonstration program (AL 93.791) • Understatement of $676,806 for the Block Grants for Community Mental Health Services program (AL 93.958) • Understatement of $21,358,086 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) In addition, expenditures to subrecipients were misstated for the following programs: • Overstatement of $86,608,290 for the Child Care and Development Block Grant program (AL 93.575) • Understatement of $18,959,072 for the Coronavirus State and Local Fiscal Recovery Funds program (AL 21.027) Cause: The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2023 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. This issue was also reported as finding 2022-211 in the Single Audit Report for fiscal year 2022. Other factors impacting the Department’s accurate completion of the fiscal year 2023 SEFA, such as working with the implementation of a new statewide accounting system, Luma, that resulted in issues reconciling grant reports and SEFA reports. The Department also used SEFA reports that had been run before the budget team had completed all necessary grant uploads, which resulted in excluded information from the SEFA. The reports used to prepare the SEFA closing package were pre-built to pull the data from only the cooperative welfare fund (0220). Historically, this approach was successful because all the Department’s federal funds were coded to the cooperative welfare fund. The Department did not consider the spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) through the American Rescue Plan Act fund (0344) when preparing the SEFA closing package. This resulted in those expenditures being omitted from the original SEFA submitted. The spending for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) was originally understated on the SEFA by $21,358,086. The SEFA was adjusted after inquiry during the audit process to include the American Rescue Plan Act fund (0344). The original amount reported was $2,856,346. The final amount reported was $24,214,432. In addition, $86,608,290 originally reported as expenditures to subrecipients for the Child Care and Development Block Grant program (AL 93.575) were payments to providers rather than subrecipients. The coding in the accounting system by the Department’s program staff lead to the erroneous inclusion of the funds in the subrecipient reporting on the SEFA. Effect: In the absence of the audit work completed and the resulting revised submission by the Department to the Office, the statewide SEFA would have included multiple misstatements. Recommendation: We recommend that the Department improve the process for gathering information to prepare the SEFA closing package, and to review it for accuracy, to include training and specific procedures at a level of detail sufficient to detect and correct errors in the SEFA closing package. Management’s View: The Department agrees with the finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
--Type of Finding: Material weakness in internal control over compliance --Federal Program: All federal programs --Questioned Costs: None --Criteria: Title 2, CFR Part 200, Subpart F, § 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with § 200.502. --Condition: While performing audit procedures on the schedule of expenditures of federal awards (SEFA), we identified federal awards that the organization did not identify for inclusion in the SEFA. The SEFA was materially misstated due to the exclusion of two federal awards with expenditures totaling $169,960 during the year, and discrepancies in relevant information expenditure amounts listed for certain other federal awards totaling $92,083. --Cause: There is a deficiency in the design and implementation of internal controls in place to identify federal awards and expenditures for inclusion on the SEFA, and to properly review the SEFA. --Effect: Failure to accurately identify federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Recommendation: To ensure an accurate and complete presentation of the SEFA, we recommend management develop a system whereby all federal assistance is identified at both the program level and in the accounting department. We recommend identifying whether grants or other forms of assistance include federal funding at the time grants are signed or received. We further recommend that one individual be made responsible for tracking this information and that the information be provided to and reviewed by an individual in the accounting department on an ongoing basis. --Views of Responsible Officials: Management agrees with auditor’s finding. See attached corrective action plan.
Assistance Listing Numbers: 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants), 20.507 Federal Transit – Formula Grants (Urbanized Area Formula), 20.525 State of Good Repair Grants, 20.505 Metropolitan Transportation Planning Grants, and 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities Federal Agency – Department of Transportation Finding Type: Significant Deficiency and Non-Compliance Condition During the audit, it was found that the auditee incorrectly classified the following: • Assistance Listing Number 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants) – Management reported $2,455,795 as federal awards expended instead of $1,589,748, which were the amounts validated by the auditors. • Assistance Listing Number 20.507 Federal Transit – Formula Grants (Urbanized Area Formula) – Management reported $25,222,452 as federal awards expended instead of $21,372,923, which were the amounts validated by the auditors. • Assistance Listing Number 20.525 State of Good Repair Grants – Management did not report federal awards expended instead of $4,715,576, which was the amount validated by the auditors. • Assistance Listing Number 20.505 Metropolitan Transportation Planning Grants – Management reported $2,279,469 as federal awards expended instead of $2,210,082, which were the amounts validated by the auditors. • Assistance Listing Number 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities – Management reported $15,848.93 as federal awards expended instead of $14,912.93, which were the amounts validated by the auditors. Criteria Under 2 CFR 200.510(b), auditees are required to prepare a Schedule of Expenditures of Federal Awards (SEFA) and must include accurate information about expenditures for each federal program, including the correct Assistance Listing number. In addition, the auditee must 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. Cause The misclassification appears to have resulted from a misunderstanding of the program guidelines and a lack of adequate internal controls to ensure the accurate reporting of federal expenditures. Effect This misclassification could result in noncompliance with federal regulations and may impact the federal agency's ability to accurately monitor and allocate funding. Furthermore, it may lead to incorrect conclusions about the auditee's compliance with specific program requirements. Questioned Costs None Recommendation It is recommended that the auditee: • Review and revise its procedures for classifying federal expenditures to ensure accurate alignment with assistance listing numbers. • Implement additional training for staff responsible for preparing the SEFA. • Conduct a thorough review of all federal program expenditures for the current and previous years to identify and correct any similar misclassifications.
Assistance Listing Numbers: 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants), 20.507 Federal Transit – Formula Grants (Urbanized Area Formula), 20.525 State of Good Repair Grants, 20.505 Metropolitan Transportation Planning Grants, and 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities Federal Agency – Department of Transportation Finding Type: Significant Deficiency and Non-Compliance Condition During the audit, it was found that the auditee incorrectly classified the following: • Assistance Listing Number 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants) – Management reported $2,455,795 as federal awards expended instead of $1,589,748, which were the amounts validated by the auditors. • Assistance Listing Number 20.507 Federal Transit – Formula Grants (Urbanized Area Formula) – Management reported $25,222,452 as federal awards expended instead of $21,372,923, which were the amounts validated by the auditors. • Assistance Listing Number 20.525 State of Good Repair Grants – Management did not report federal awards expended instead of $4,715,576, which was the amount validated by the auditors. • Assistance Listing Number 20.505 Metropolitan Transportation Planning Grants – Management reported $2,279,469 as federal awards expended instead of $2,210,082, which were the amounts validated by the auditors. • Assistance Listing Number 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities – Management reported $15,848.93 as federal awards expended instead of $14,912.93, which were the amounts validated by the auditors. Criteria Under 2 CFR 200.510(b), auditees are required to prepare a Schedule of Expenditures of Federal Awards (SEFA) and must include accurate information about expenditures for each federal program, including the correct Assistance Listing number. In addition, the auditee must 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. Cause The misclassification appears to have resulted from a misunderstanding of the program guidelines and a lack of adequate internal controls to ensure the accurate reporting of federal expenditures. Effect This misclassification could result in noncompliance with federal regulations and may impact the federal agency's ability to accurately monitor and allocate funding. Furthermore, it may lead to incorrect conclusions about the auditee's compliance with specific program requirements. Questioned Costs None Recommendation It is recommended that the auditee: • Review and revise its procedures for classifying federal expenditures to ensure accurate alignment with assistance listing numbers. • Implement additional training for staff responsible for preparing the SEFA. • Conduct a thorough review of all federal program expenditures for the current and previous years to identify and correct any similar misclassifications.
Assistance Listing Numbers: 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants), 20.507 Federal Transit – Formula Grants (Urbanized Area Formula), 20.525 State of Good Repair Grants, 20.505 Metropolitan Transportation Planning Grants, and 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities Federal Agency – Department of Transportation Finding Type: Significant Deficiency and Non-Compliance Condition During the audit, it was found that the auditee incorrectly classified the following: • Assistance Listing Number 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants) – Management reported $2,455,795 as federal awards expended instead of $1,589,748, which were the amounts validated by the auditors. • Assistance Listing Number 20.507 Federal Transit – Formula Grants (Urbanized Area Formula) – Management reported $25,222,452 as federal awards expended instead of $21,372,923, which were the amounts validated by the auditors. • Assistance Listing Number 20.525 State of Good Repair Grants – Management did not report federal awards expended instead of $4,715,576, which was the amount validated by the auditors. • Assistance Listing Number 20.505 Metropolitan Transportation Planning Grants – Management reported $2,279,469 as federal awards expended instead of $2,210,082, which were the amounts validated by the auditors. • Assistance Listing Number 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities – Management reported $15,848.93 as federal awards expended instead of $14,912.93, which were the amounts validated by the auditors. Criteria Under 2 CFR 200.510(b), auditees are required to prepare a Schedule of Expenditures of Federal Awards (SEFA) and must include accurate information about expenditures for each federal program, including the correct Assistance Listing number. In addition, the auditee must 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. Cause The misclassification appears to have resulted from a misunderstanding of the program guidelines and a lack of adequate internal controls to ensure the accurate reporting of federal expenditures. Effect This misclassification could result in noncompliance with federal regulations and may impact the federal agency's ability to accurately monitor and allocate funding. Furthermore, it may lead to incorrect conclusions about the auditee's compliance with specific program requirements. Questioned Costs None Recommendation It is recommended that the auditee: • Review and revise its procedures for classifying federal expenditures to ensure accurate alignment with assistance listing numbers. • Implement additional training for staff responsible for preparing the SEFA. • Conduct a thorough review of all federal program expenditures for the current and previous years to identify and correct any similar misclassifications.
Assistance Listing Numbers: 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants), 20.507 Federal Transit – Formula Grants (Urbanized Area Formula), 20.525 State of Good Repair Grants, 20.505 Metropolitan Transportation Planning Grants, and 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities Federal Agency – Department of Transportation Finding Type: Significant Deficiency and Non-Compliance Condition During the audit, it was found that the auditee incorrectly classified the following: • Assistance Listing Number 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants) – Management reported $2,455,795 as federal awards expended instead of $1,589,748, which were the amounts validated by the auditors. • Assistance Listing Number 20.507 Federal Transit – Formula Grants (Urbanized Area Formula) – Management reported $25,222,452 as federal awards expended instead of $21,372,923, which were the amounts validated by the auditors. • Assistance Listing Number 20.525 State of Good Repair Grants – Management did not report federal awards expended instead of $4,715,576, which was the amount validated by the auditors. • Assistance Listing Number 20.505 Metropolitan Transportation Planning Grants – Management reported $2,279,469 as federal awards expended instead of $2,210,082, which were the amounts validated by the auditors. • Assistance Listing Number 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities – Management reported $15,848.93 as federal awards expended instead of $14,912.93, which were the amounts validated by the auditors. Criteria Under 2 CFR 200.510(b), auditees are required to prepare a Schedule of Expenditures of Federal Awards (SEFA) and must include accurate information about expenditures for each federal program, including the correct Assistance Listing number. In addition, the auditee must 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. Cause The misclassification appears to have resulted from a misunderstanding of the program guidelines and a lack of adequate internal controls to ensure the accurate reporting of federal expenditures. Effect This misclassification could result in noncompliance with federal regulations and may impact the federal agency's ability to accurately monitor and allocate funding. Furthermore, it may lead to incorrect conclusions about the auditee's compliance with specific program requirements. Questioned Costs None Recommendation It is recommended that the auditee: • Review and revise its procedures for classifying federal expenditures to ensure accurate alignment with assistance listing numbers. • Implement additional training for staff responsible for preparing the SEFA. • Conduct a thorough review of all federal program expenditures for the current and previous years to identify and correct any similar misclassifications.
Assistance Listing Numbers: 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants), 20.507 Federal Transit – Formula Grants (Urbanized Area Formula), 20.525 State of Good Repair Grants, 20.505 Metropolitan Transportation Planning Grants, and 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities Federal Agency – Department of Transportation Finding Type: Significant Deficiency and Non-Compliance Condition During the audit, it was found that the auditee incorrectly classified the following: • Assistance Listing Number 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants) – Management reported $2,455,795 as federal awards expended instead of $1,589,748, which were the amounts validated by the auditors. • Assistance Listing Number 20.507 Federal Transit – Formula Grants (Urbanized Area Formula) – Management reported $25,222,452 as federal awards expended instead of $21,372,923, which were the amounts validated by the auditors. • Assistance Listing Number 20.525 State of Good Repair Grants – Management did not report federal awards expended instead of $4,715,576, which was the amount validated by the auditors. • Assistance Listing Number 20.505 Metropolitan Transportation Planning Grants – Management reported $2,279,469 as federal awards expended instead of $2,210,082, which were the amounts validated by the auditors. • Assistance Listing Number 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities – Management reported $15,848.93 as federal awards expended instead of $14,912.93, which were the amounts validated by the auditors. Criteria Under 2 CFR 200.510(b), auditees are required to prepare a Schedule of Expenditures of Federal Awards (SEFA) and must include accurate information about expenditures for each federal program, including the correct Assistance Listing number. In addition, the auditee must 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. Cause The misclassification appears to have resulted from a misunderstanding of the program guidelines and a lack of adequate internal controls to ensure the accurate reporting of federal expenditures. Effect This misclassification could result in noncompliance with federal regulations and may impact the federal agency's ability to accurately monitor and allocate funding. Furthermore, it may lead to incorrect conclusions about the auditee's compliance with specific program requirements. Questioned Costs None Recommendation It is recommended that the auditee: • Review and revise its procedures for classifying federal expenditures to ensure accurate alignment with assistance listing numbers. • Implement additional training for staff responsible for preparing the SEFA. • Conduct a thorough review of all federal program expenditures for the current and previous years to identify and correct any similar misclassifications.
Finding 2023-001: Accuracy of expenditures on the Schedule of Expenditures of Federal Awards and submission of special reports for the Head Start Program Cluster Name: Head Start Federal Awarding Agency: Department of Health and Human Services Award Name: Head Start and Early Head Start, COVID (P.L. 116-260) Award Number: 09CH010228-05-05, 09CH011831-02-03, 09HE000328-01-00 Award Years: 2019-2021, 2021-2022, 2021-2023 Assistance Listing Title: Head Start Assistance Listing Number: 93.600 Pass-through entities: Not applicable Criteria 2 CFR 200.510 Financial statements requires auditees to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. The information presented should be consistent with the accounting records and other federal guidance. 2 CFR Part 200 Appendix XI Part 3-L-1 Performance and Special Reporting notes that non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). They also may be required to submit special reports as required by the terms and conditions of the federal award. Condition The following errors were identified related to funding that was improperly included in the fiscal year 2023 SEFA and have subsequently been corrected in the fiscal year 2023 SEFA by the University, as a result of our audit procedures: • In fiscal year 2023, $283 thousand in budgeted capital expenditures were charged to and drawn down on Head Start awards before actual expenditures were incurred by the University. Management identified the error in the subsequent year and credited the fiscal year 2024 SEFA for this amount. Additionally, management refunded the federal agency $159 thousand of the amount in November 2023 and is in the process of refunding the remaining balance plus imputed interest. • In fiscal year 2023, $67 thousand in actual expenditures were charged to a Head Start award after liquidation extensions associated with the award had expired. Management identified the error in the subsequent year but had not yet credited the amount in the SEFA. None of the funds were drawn down from the federal agency, and thus, a refund to the federal agency was not required. Of the three required federal reports selected for testing, two were not submitted until selected for testing and one has not yet been submitted. Cause The University has limited federal awards that are utilized to fund capital expenditures. As a result, management was not aware that budgeted capital expenditures were being charged to the Head Start program in advance of being incurred by the University’s Facilities Management Services Department. Additionally, while the University’s IT system prevents the draw down of funding from federal agencies for awards that have expired, it does not prevent expenditures from being charged to expired awards. Management’s manual expenditure reconciliation process for the Head Start program failed to identify that expenditures were charged to the award after the expiration date in a timely manner. Management lacks a formalized process for identifying and tracking submission of required reports under the Head Start program. Effect A SEFA that is not accurate could impact the scoping of an entity’s major programs and result in inaccurate information being provided to the federal government. Not submitting required federal reports results in the federal government not having the information it needs to inform improvements in program outcomes and productivity. Questioned Costs None noted. Recommendation We recommend that management reinforce its existing policies regarding the charging of expenditures to the Head Start program with all departments involved in administering federal awards. Additionally, we recommend that management more timely reconcile expenditures charged to the Head Start program so that any necessary adjustments are reflected in the appropriate fiscal year. We recommend management implement a formal process to identify and track submission of required reports under the Head Start program. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Condition:We noted that some Federal expenditures for certain listed programs did not agree to the underlying financial records. The underlying financial records are prepared in accordance to requirements in 2 CFR 200.502 and thus the expenditures per program should agree with the underlying financial records. Certain accruals of expenses were made in the financial records that were not reflected on the SEFA. Criteria:The Code of Federal Regulations requires that auditees prepare the Schedule of Expenditures of Federal Awards (SEFA) (2 CFR 200.510(b)) and display all Federal expenditures per Federal program (2 CFR 200.510(b)(3)) in accordance with the expenditure guidelines at 2 CFR 200.502. Expenditures should be based, generally, on when the activity occurred. In general, this means that the SEFA will agree to the underlying financial records. Cause:This was due to a misunderstanding of how the accruals should relate to the SEFA. Effect:The SEFA was overstated for the current year before correction. Context:This issue does not appear pervasive. While the misstatement was material, the accruals were unusual and not a pervasive mistake. Recommendation:We recommend fully agreeing the SEFA to the underlying financial statements. The reconciliation process was completed with the exception of these accruals. We recommend including the accruals in most cases since Federal expenditures are generally calculated in accordance with GAAP accrual accounting. Deviations from GAAP can be found at 2 CFR 200.502. Views of Responsible Officials:Management agrees with the finding.
Condition:We noted that some Federal expenditures for certain listed programs did not agree to the underlying financial records. The underlying financial records are prepared in accordance to requirements in 2 CFR 200.502 and thus the expenditures per program should agree with the underlying financial records. Certain accruals of expenses were made in the financial records that were not reflected on the SEFA. Criteria:The Code of Federal Regulations requires that auditees prepare the Schedule of Expenditures of Federal Awards (SEFA) (2 CFR 200.510(b)) and display all Federal expenditures per Federal program (2 CFR 200.510(b)(3)) in accordance with the expenditure guidelines at 2 CFR 200.502. Expenditures should be based, generally, on when the activity occurred. In general, this means that the SEFA will agree to the underlying financial records. Cause:This was due to a misunderstanding of how the accruals should relate to the SEFA. Effect:The SEFA was overstated for the current year before correction. Context:This issue does not appear pervasive. While the misstatement was material, the accruals were unusual and not a pervasive mistake. Recommendation:We recommend fully agreeing the SEFA to the underlying financial statements. The reconciliation process was completed with the exception of these accruals. We recommend including the accruals in most cases since Federal expenditures are generally calculated in accordance with GAAP accrual accounting. Deviations from GAAP can be found at 2 CFR 200.502. Views of Responsible Officials:Management agrees with the finding.
Finding 2023-004: Federal Financial Reporting Requirements (Significant Deficiency) Federal Program: Assistance Listing Number 14.267 Criterion or Specific Requirements: Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities to establish and maintain effective internal control over Federal awards that provide reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. CFR Section 200.502(a) states that the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. CFR Section 200.510 states that the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with CFR Section 200.502. Condition: The schedule of expenditures of Federal awards (SEFA) for the year ended June 30, 2023, was not supported by general ledger detail at the start of our audit in October 2023. Management had not originally allocated costs in the general ledger such that it supported the amounts on the SEFA. The allocation of costs in the general ledger was completed in January 2024. Questioned Costs: None Cause: IW originally prepared the SEFA without fully allocating all Federal award related costs in the general ledger. Effect or Potential Effect: The exclusion of certain allocated costs from the general ledger created variances when the SEFA was reconciled to the general ledger at the start of the audit in October 2023. Without remedy, this situation could have caused an inaccurate selection of audit samples for single audit testing. Recommendation: IW should implement a process for preparing the SEFA that includes fully allocating costs in the general ledger so as to support all amounts reported in the SEFA.
Finding 2023-004: Federal Financial Reporting Requirements (Significant Deficiency) Federal Program: Assistance Listing Number 14.267 Criterion or Specific Requirements: Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities to establish and maintain effective internal control over Federal awards that provide reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. CFR Section 200.502(a) states that the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. CFR Section 200.510 states that the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with CFR Section 200.502. Condition: The schedule of expenditures of Federal awards (SEFA) for the year ended June 30, 2023, was not supported by general ledger detail at the start of our audit in October 2023. Management had not originally allocated costs in the general ledger such that it supported the amounts on the SEFA. The allocation of costs in the general ledger was completed in January 2024. Questioned Costs: None Cause: IW originally prepared the SEFA without fully allocating all Federal award related costs in the general ledger. Effect or Potential Effect: The exclusion of certain allocated costs from the general ledger created variances when the SEFA was reconciled to the general ledger at the start of the audit in October 2023. Without remedy, this situation could have caused an inaccurate selection of audit samples for single audit testing. Recommendation: IW should implement a process for preparing the SEFA that includes fully allocating costs in the general ledger so as to support all amounts reported in the SEFA.
Assistance Listing, Federal Agency, and Program Name - 93.354 U.S. Department of Health and Human Services, Research & Development (R&D) Cluster, Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Federal Award Identification Number and Year - PH-2-533 Pass through Entity - Clemson University Finding Type - Significant deficiency Repeat Finding - No Criteria Per 2 CFR 200.510(b) - 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. Condition - The schedule of expenditures of federal awards (SEFA) was not complete. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Several versions of the SEFA were provided during the audit period and in the final review, the College identified a missing grant to be reported in the R&D cluster, which resulted in additional audit testing. For the R&D Cluster, ALN 93.354 (Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response), expenditures reported on the SEFA were understated by $229,506. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. For the R&D Cluster, ALN 93.354 (Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response), expenditures reported on the SEFA were understated by $229,506. This error has has been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement process to ensure that the SEFA is prepared timely and that it is complete and accurate. Views of Responsible Officials and Planned Corrective Actions - The College will ensure that the schedule of federal awards (SEFA) is reviewed for completeness. Going forward, the SEFA will compared with the prior year SEFA and a separate schedule of new awards for the current fiscal period. The results of this comparison will be reviewed by the grants office, the controller’s office and the Vice President’s office. This will increase the level of reviews to a three tiered process which should address issues of completeness of the SEFA.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.
2023-01 - Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Numbers: 93.650 Accountable Health Communities 93.391 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 Temporary Assistance for Needy Families 93.667 Social Services Block Grant 93.738 Racial & Ethnic Approaches to Community Health; Program Solely Funded by Public Prevention Health Funds 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.052 National Family Caregiver Support 93.268 Immunization Cooperative Agreements United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Community Development Block Grants United States Department of Homeland Security Assistance Listing Number: 97.024 Emergency Food and Shelter Criteria: 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 CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with CFR §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal agency provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial Reporting and §200.329 Monitoring and Reporting Program Performance. Records that identify adequately the source and application of funds for federally funded activities. Effective control over, and accountability for, all funds, property, and other assets.Condition: During management’s preparation of the Schedule of Expenditures of Federal Awards (SEFA), the finance team of the Organization used a combination of cost center reports that identify Federal dollars spent throughout the year, reporting done by program management, and invoices billed to Federal agencies. The SEFA preparation and review process did not appropriately reflect total Federal Expenditures for the period covered. During our major program grant population completeness procedures, we identified expenditures of federal awards that had been excluded from the SEFA prepared by management. The SEFA, as presented in these financial statements has been adjusted to include an additional $13,012 of expenditures incurred for AL 93.391 versus what had been previously presented. Cause: Subsequent to June 30, 2023, United Way of Greater Cleveland experienced turnover in certain program management positions with the responsibility for submission and preparation of data for completion of the schedule of expenditures of federal awards (SEFA). As a result of these changes in staffing, management was unable to fully execute on its documented internal control policies regarding SEFA preparation. Accordingly, internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to personnel changes in the programmatic areas, responsible for submission of costs incurred for the SEFA. Effect: The SEFA provided for the audit was inaccurate for the reasons 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 related to the items described above. Context: The conditions outlined above are based on our testing of the United Way of Greater Cleveland’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 a repeat finding. Recommendation: We recommend management address the staffing considerations to ensure the documented policies and procedures can be performed as prescribed, and that 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: United Way of Greater Cleveland’s management agrees with the finding and recommendations set forth within and has developed a corrective action. The Organization’s corrective action plan is described in Management’s Corrective Action Plan included at page __ of this reporting package.