MANAGEMENT IS RESPONSIBLE FOR ESTABLISHING AND MAINTAINING AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS TO ENSURE COMPLIANCE WITH 2 CFR PART 200, SECTION 200.514(C) AND SUBPART E, COST PRINCIPLES DOCUMENTATION OF INTERNAL CONTROLS SURROUNDING ALLOCATION OF COSTS, IS A KEY COMPONENT OF EFFECTIVE INTERNAL CONTROL OVER COMPLIANCE. THE COALITION COULD NOT PROVIDE DOCUMENTATION OF REVIEW AND APPROVAL OF EXPENSES ALLOCATED THROUGH THE JOURNAL ENTRY PROCESS TO THE FEDERAL PROGRAMS. SUPPORTING DOCUMENTATION COULD NOT BE PROVIDED THAT SHOWED PAYROLL REGISTER BASE COSTS TIED TO THE AMOUNTS ALLOCATED TO THE VARIOUS GRANT PROGRAMS.
MANAGEMENT IS RESPONSIBLE FOR ESTABLISHING AND MAINTAINING AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS TO ENSURE COMPLIANCE WITH 2 CFR PART 200, SECTION 200.514(C), AND UNDER 2 CFR PART 200, SUBPART E, COSTS MUST BE ADEQUATELY DOCUMENTED. DURING OUR TESTING OF PAYROLL COSTS WE OBSERVED 2 OF THE 4 PAYROLL PERIODS TESTED WHERE KEY INTERNAL CONTROL OVERSIGHT PROVIDING REVIEW AND APPROVALS OF PAYROLL TIME ENTRY COULD NOT BE OBSERVED ON THE REPORTS AVAILABLE TO STAFF AFTER THE TRANSITION TO NEW TIME KEEPING SOFTWARE. ADDITIONALLY, THE PAYROLL TIME KEEPING REPORTING INFORMATION AVAILABLE DURING FIELDWORK FOR REVIEW APPEARED TO BE INCOMPLETE.
MANAGEMENT IS RESPONSIBLE FOR ESTABLISHING AND MAINTAINING AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS TO ENSURE COMPLIANCE WITH 2 CFR PART 200, SECTION 200.514(C). ADDITIONALLY, A NON-FEDERAL ENTITY MAY CHARGE ONLY ALLOWABLE COSTS INCURRED DURING THE APPROVED BUDGET PERIOD OF A FEDERAL AWARD’S PERIOD OF PERFORMANCE AND ANY COSTS INCURRED BEFORE THE FEDERAL AWARDING AGENCY OR PASS-THROUGH ENTITY MADE THE FEDERAL AWARD THAT WERE AUTHORIZED BY THE FEDERAL AWARDING AGENCY OR PASS-THROUGH ENTITY (2 CFR 200.308, 200.309, AND 200.403(H)). DURING TESTING OF 25 EXPENDITURE SELECTIONS WE OBSERVED 14 PAYROLL AND NON-PAYROLL EXPENDITURES WHICH WERE RECORDED UNDER THE 2401IDSDVC GRANT PROGRAM WHICH WERE OUTSIDE OF THE PERIOD OF PERFORMANCE ENDING DATE OF SEPTEMBER 30, 2025.
Finding No. 2025-001 U.S. Department of Commerce National Oceanic and Atmospheric Administration Assistance Listing No. (ALN) 11.999 – Abandoned and Derelict Vessels (ADV) - Leveraging Strategic Partnerships for Removal, Disposal, Prevention and Education Type of finding – Material Weakness in Internal Controls and Non-Compliance over Subrecipient Monitoring Repeat Finding – No Criteria The BoatU.S. Foundation (BoatU.S.) team coordinates the subrecipient monitoring process for the ADVs - Leveraging Strategic Partnerships for Removal, Disposal, Prevention and Education. ADVs program is funded by the US Department of Commerce, passed through by National Oceanic and Atmospheric Administration (NOAA). Per 2 CFR 200.303(a), BoatU.S. must establish and maintain effective internal controls over Federal awards that provides reasonable assurance that they are managing Federal awards in compliance with Federal statues, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs. Per 2 CFR Section 200.332, all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the certain information at the time of the subaward and if any of these data elements change, include the changes in the subsequent award modification. Required information includes: (1) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number (ALN) at the time of disbursement, and, (2) A non-Federal entity that expends $1 million or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. Also, per 2 CFR Section 200.332, the pass-through entity is responsible for monitoring the activities of the subrecipient, as necessary, to ensure that the subaward is used for authorized purposes, in compliance with the Federal statutes, regulations, and the terms and conditions of the subaward; and that the subaward performance goals are achieved. Condition BoatU.S. Foundation did not incorporate the need for a single audit for subrecipients that expend more than $1 million of federal funding in a given fiscal year into the fiscal year 2025 contracts and the contracts and disbursements currently do not indicate ALN number at the time of each disbursement. Regarding subrecipient monitoring, no substantial documentation of onsite monitoring and validation of subrecipient costs being used for authorized purposes was performed. BoatU.S. Foundation Schedule of Findings and Questioned Costs (continued) Year Ended December 31, 2025 Cause BoatU.S.’s internal controls relating to subrecipient monitoring were not effective to properly monitor, obtain information and document the subrecipient monitoring process. Effect BoatU.S. was not in compliance with federal monitoring compliance regulations due to having insufficient documentation. Questioned Costs Unknown Recommendation: BoatU.S. should ensure that all requirements are incorporated into subrecipient contracts and disbursement information. BoatU.S. should also strengthen documentation of onsite and all monitoring procedures performed. Finally, BoatU.S. should implement stronger controls to ensure timely receipt of biannual subrecipient expense reports. Views of Responsible Officials: Management concurs with the audit finding. Corrective Action Plan: The BoatU.S. ADVs contract will be amended for fiscal year 2026 contracts to include the ALN, and the need for a Single Audit for subrecipients that expend over $1,000,000 in federal funding in their given fiscal year. BoatU.S. will implement stricter deadlines for subrecipients to submit their biannual reports in 2026. Progress monitoring will be done throughout the year and documented by BoatU.S. personnel. This should also include project cost documentation of the subrecipient is used for authorized purposes. These reports may need to include photos of the tasks completed, if necessary. BoatU.S. plans to only reimburse for progress costs as incurred by the subrecipient. Implementation date: September 2026 Responsible Person: Alison Trimble, Director, Operations
Finding 2025-001 United States Department of Agriculture - Forest Service Federal Assistance Listing No. 10.727 Inflation Reduction Act (IRA) Significant Deficiency in Internal Controls and Noncompliance over Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Nonpayroll) Repeat Finding: No Condition: During our testing and review of the non-payroll transactions, BTT did not provide evidence that charges for 10 out of 40 transactions on the grant were approved by supervisory personnel. Criteria: In accordance with 2 CFR 200.514: (c) Internal controls, (1) The compliance supplement provides guidance on internal controls over federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. In accordance with 2 CFR 200.430: Test direct costs charged to federal awards with the following criteria: a. Costs were approved by the federal awarding agency, if required. (See 2 CFR 200.407 for items of cost that require prior written approval and Exhibit 1, Selected Items of Cost, in this part of the Supplement.) b. Costs were necessary and reasonable for the performance of the federal award and allocable under the principles of 2 CFR 200, Subpart E. c. Costs conformed to any limitations or exclusions set forth in 2 CFR 200, Subpart E, or in the federal award as to types or amount of cost items. d. Costs were consistent with policies and procedures that apply uniformly to both federally financed and other activities of the NPO. e. Costs were accorded with consistent treatment. Costs were not assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances was allocated to a federal award as an indirect cost. f. Costs were not included as a cost of any other federally financed program in either the current or a prior period. g. Costs were not used to meet the costsharing or matching requirements of another federal program, except where authorized by federal statute. h. Costs were adequately documented. Cause: BTT did not have proper controls in place to ensure that federal activities charged were reviewed by appropriate approver and that all approvers are listed in the approval policy. Effect: Failure to document supervisory approval of grant charges increases the risk of unallowable or unsupported costs being charged to the grant, potentially leading to noncompliance and jeopardizing current or future funding. Questioned Costs: Unknown. Recommendation: We recommend that BTT establish and update written procedures related to federally funded expenses to ensure the charges are approved and allowable for the grant. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plan. Auditor’s Conclusion: Finding remains as stated.
2 CFR 200.514 of the Uniform Guidance requires entities to have internal controls in place to monitor that expenditures are only for allowable activities and that services charged to the federal award are allowable per the applicable cost principles. In addition, a fundamental concept in a good system of internal controls is the segregation of duties; segregating access, custody, and authorization of transactions. These controls aid in mitigating risk in monitoring. Through inquiry and internal control testing, it was noted that the employees outside of the HR department have access to employee information within the system. This includes potential access to pay rates and other protected information inside the system. Payroll costs represent the majority of Federal award expenditures for the Medical Center.
REFERENCE NUMBER: 2025-001 FEDERAL PROGRAM: Section 8 Housing Choice Vouchers ASSISTANCE LISTING NUMBER: 14.871 NAME OF FEDERAL AGENCY: U.S. Department of Housing and Urban Development (HUD) COMPLIANCE REQUIREMENT: Reporting/HUD tenant data submissions, including PIC-related reporting REPEAT FINDING: No Criteria Under the Uniform Guidance, the auditor is required to perform procedures to determine whether the auditee complied with federal statutes, regulations, and the terms and conditions of federal awards that may have a direct and material effect on each major program. 2 CFR § 200.514(d) requires the auditor to perform transaction tests and other audit procedures necessary to determine compliance for each major program. The OMB Compliance Supplement is the mandatory framework for identifying compliance requirements subject to audit. The Section 8 Housing Choice Voucher program is administered by public housing authorities under an Annual Contributions Contract with HUD and is governed by HUD regulations at 24 CFR parts 5 and 982–985. Reporting requirements may be material when they support a recipient’s entitlement to HUD assistance, including tenant certifications and HAP-related reporting. Condition During our testing of tenant files for the Section 8 Housing Choice Voucher major program, we selected a sample of 3 tenant files from a population of 24 tenant files / voucher participants for the fiscal year ended September 30, 2025. We noted that 2 of the 3 tenant files tested did not have evidence that required PIC submissions were completed. Questioned Costs - None No questioned costs were identified as a direct result of this finding because the exceptions related to missing evidence of required PIC submissions rather than identified unsupported HAP payments. However, questioned costs are subject to change if additional procedures identify unsupported or ineligible payments related to the affected tenant files. Cause The Authority did not appear to have adequate procedures in place to ensure that required PIC submissions were prepared, reviewed, and submitted timely for all applicable tenant actions. In addition, the Authority’s review controls over tenant file completion did not identify the missing PIC submissions before the files were selected for audit. Effect Failure to complete required PIC submissions may result in inaccurate or incomplete reporting of tenant and voucher activity to HUD. Incomplete PIC reporting may affect HUD’s monitoring of the Housing Choice Voucher program and may impair the Authority’s ability to demonstrate compliance with applicable HUD reporting requirements. Because reporting requirements can be directly related to HUD assistance and HAP-related reporting, noncompliance could be material to the major program depending on the nature and extent of the errors Recommendation We recommend that the Authority strengthen its procedures over PIC submissions by: • Maintaining a tracking log of all required PIC submissions, including the tenant action type, effective date, due date, submission date, and confirmation of acceptance. • Requiring supervisory review of tenant files to verify that PIC submissions have been completed and retained in the file. • Performing periodic reconciliations between tenant file activity and PIC submission records. • Providing refresher training to staff responsible for tenant file processing and HUD reporting requirements. • Implementing a corrective review of tenant files processed during the audit period to determine whether additional PIC submissions were missed and to submit or correct any outstanding items, as applicable. Management’s response: The Authority agrees with the finding. Management will implement additional controls, monitoring procedures, and supervisory review requirements to ensure PIC/HUD-50058 submissions are prepared, submitted, and retained timely and completely for all tenant actions.
REFERENCE NUMBER: 2025-002 FEDERAL PROGRAM: Section 8 Housing Choice Vouchers ASSISTANCE LISTING NUMBER: 14.871 NAME OF FEDERAL AGENCY: U.S Department of Housing and Urban Development (HUD) COMPLIANCE REQUIREMENT: Special Test and Provisions: Inspections and Rent Reasonableness REPEAT FINDING: No Criteria Under 2 CFR § 200.514(d), the auditor is required to perform transaction tests and other audit procedures necessary to determine whether the recipient complied with federal statutes, regulations, and the terms and conditions of federal awards that may have a direct and material effect on each major program. The OMB Compliance Supplement identifies compliance requirements that the federal government expects auditors to consider in a Uniform Guidance compliance audit, and use of the Compliance Supplement is mandatory. The Section 8 Housing Choice Voucher program is administered by PHAs under an Annual Contributions Contract with HUD and is governed by 24 CFR parts 5 and 982–985. The program is intended to assist eligible families in leasing safe, decent, and affordable housing. For the Housing Choice Voucher program: • Rent reasonableness: 24 CFR § 982.507 requires the PHA to determine that the rent to owner is reasonable before approving a lease and at other required times. • Inspections / Housing Quality Standards: 24 CFR § 982.405 and 24 CFR part 982, subpart I establish inspection and housing quality standards requirements applicable to assisted units. Condition During our testing of tenant files for the Section 8 Housing Choice Voucher major program, we selected a sample of 3 tenant files from a population of 24 tenant files / voucher participants for the fiscal year ended September 30, 2025. We noted the following exceptions related to Special Tests and Provisions: • We noted one instance in which the tenant files did not include evidence that the Authority completed and retained the required rent reasonableness determination. • We noted one instance in which the tenant file did not include evidence that the required inspection was performed and documented. Cause The Authority did not appear to have adequate controls to ensure that required rent reasonableness determinations and inspection documentation were completed, reviewed, and retained in tenant files before HAP payments were approved or continued. Existing tenant file review procedures did not consistently identify missing documentation. Questioned Costs – None No questioned costs were identified as a direct result of this finding because the audit procedures did not identify specific ineligible HAP payments. However, the absence of required documentation increases the risk that unsupported or ineligible payments could have occurred. Effect Failure to document rent reasonableness determinations may result in the Authority approving rents that are not supported as reasonable in accordance with HUD requirements. Failure to document required inspections may result in HAP payments being made for units for which the Authority cannot demonstrate compliance with applicable housing quality standards or inspection requirements. These conditions increase the risk that HAP payments may be made for units with unsupported rent levels or units that have not been documented as meeting required inspection standards. The HCV program is intended to provide assistance for safe, decent, and affordable housing. The auditor should evaluate the significance of nonmonetary noncompliance using professional judgment, including the exception rate when applicable. Recommendation We recommend that the Authority strengthen controls over inspections and rent reasonableness determinations by: • Requiring completion and supervisory review of rent reasonableness documentation before lease approval, rent increase approval, or execution of the HAP contract, as applicable. • Maintaining standardized rent reasonableness forms or system-generated documentation in each tenant file. • Requiring inspection documentation to be completed, reviewed, and retained before HAP payments are initiated or continued, as applicable. • Implementing a tenant file checklist that includes PIC reporting, rent reasonableness, inspection documentation, lease approval, HAP contract execution, and other required eligibility and special test elements. • Performing periodic internal quality control reviews of tenant files to verify that required documentation is present and complete. • Providing training to program staff on HUD requirements for rent reasonableness determinations, inspections, and retention of supporting documentation. • Reviewing the population of tenant files active during the audit period to determine whether additional files are missing rent reasonableness or inspection documentation and taking corrective action where needed.Management’s response: The Authority agrees with the finding. Management will strengthen documentation and supervisory review controls to ensure rent reasonableness determinations and required inspections are completed, supported, and retained in tenant files in accordance with HUD requirements.
Federal Assistance Listing Number: 97.036 Program: COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Agency Name: US Department of Health and Human Services Federal Award Number:4499DRORP 00008961 Federal Award Year: 2025 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions Criteria: Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E, Section 200.403(a) states that costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F, Section 200.514(d), auditors must test compliance with Special Tests and Provisions. Under the COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) 44 CFR 206.205, the recipient shall make an accounting to the Regional Administrator of eligible costs for each approved large project. In submitting the accounting the recipient shall certify that reported costs were incurred in the performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, and that payments for that project have been made in accordance with 2 CFR 200.305. Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Subpart D, Section 200.303), the non- Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Conditions Found: In six of 40 sample items selected for testwork over activities allowed or unallowed and allowable costs/cost principles related to the program, $469,054 in expenditures out of a total of $1,368,522 expenditures (or 34%) were submitted for reimbursement to the Federal Emergency Management Agency (FEMA) but were related to the same invoices and therefore were duplicate expenditures. Upon further investigation, management identified that a total of $2,636,044 expenditures out of a total of $14,470,349 expenditures related to the program were duplicate expenditures. Further, management’s review that was performed over the underlying program details was not designed at a sufficient level of precision that enabled the identification of the duplication errors. Further, in management’s review for the completed project certification for one of two projects for the program these duplication errors were not identified. Cause: In discussing these conditions with management, they stated the Entity did not have adequate controls in place that were designed appropriately to ensure that all the expenditures submitted for reimbursement and certified to FEMA under the COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) program represented allowable costs. Effect: Expenditures could be reimbursed by the program that were not allowable or certified incorrectly, resulting in material non-compliance with program requirements. Questioned Costs: Known questioned costs of $2,636,044. Statistical Sample: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding:This finding is not a repeat finding. Recommendation:We recommend that management strengthen processes and controls in place to ensure expenditures submitted for reimbursement and certified under the program are appropriately reviewed prior to submission to ensure they represent allowable costs. Views of Responsible Officials: Management agrees with the finding and acknowledges that duplicate expenditures were submitted for reimbursement under the FEMA program. The error resulted from insufficient controls over the tracking, reconciliation, and review of specific expenditures included in reimbursement requests, which allowed certain invoices to be claimed more than once. Upon identification of the issue, management conducted a comprehensive review of all reimbursement requests submitted under the program and identified the full population of duplicate expenditures. Management is committed to maintaining full compliance with federal award requirements and has implemented corrective actions to strengthen reimbursement controls, including enhanced expenditure tracking, independent secondary review procedures, reconciliation of submitted costs to prior claims, and updated policies and staff training. Management does not believe the finding resulted from an intentional misuse of federal funds, but rather from a limited lapse in internal controls over the reimbursement process. Management is working with FEMA, as appropriate, to resolve the duplicate claims.
Criteria: The Uniform Guidance (2CFR 200.514) requires the auditor to obtain sufficient appropriate audit evidence to express an opinion on compliance for each major federal program. Condtion: The Uniform Guidance was unable to obtain sufficient appropriate audit evidence to express an opinion on the Distric'ts compliance with the applicable requirements for the major federal program(s) because a disclaimer of opinion was issured on the financial statements because the District did not maintain certain customary accounting records and supporting documents for various transactions. Cause: The scope limitation resulted from inadequate recordkeeping and the inability to provide necessary supporting documentation. Effect: As a result, the auditor was unable to determine whether the District complied with the applicable federal program requirements, and a disclaimer of opinion was issued on compliance for the affected program(s).
The following finding and recommendation relating to an internal control deficiency classified as a Significant Deficiency was communicated to the Department of Transportation (Department) in the previous year and has not been remediated as of June 30, 2025 because the original implementation date provided by the Department was in a subsequent fiscal year. This complete finding and recommendation can be found within the original report and the complete recommendation can be found within Section IV: Disposition of Prior Audit Recommendations of this report. Finding 2024-058 Compliance with Subrecipient Monitoring for the Formula Grants for Rural Areas and Tribal Transit Program, Highway Safety Cluster, and SLFRF The Department receives federal grant funds directly from the federal government for the Formula Grants for Rural Areas and Tribal Transit Program, Highway Safety Cluster, and the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program and then subgrants, or passes through, a portion of the funds to cities and counties and other organizations that are considered to be either a subrecipient or a contractor. For Fiscal Year 2024, the Department had the following transactions that were subject to subrecipient monitoring testing: • Formula Grants for Rural Areas and Tribal Transit Program – 783 subrecipient transactions totaling $23,075,270. • Highway Safety Cluster – 829 subrecipient transactions totaling $5,669,865. • SLFRF – 232 subrecipient transactions totaling $38,321,493. For the SLFRF program, Intergovernmental Agreements are executed between the Department and subrecipients to communicate all relevant federal award information. For both the Formula Grants for Rural Areas and Tribal Transit Program and Highway Safety Cluster, Subaward Agreements (subawards) are executed between the Department and subrecipients to communicate all relevant federal award information. Intergovernmental Agreements and subawards are signed by authorized State personnel, generally the State Controller and the Department’s Chief Engineer. The Department includes a “Subrecipient Risk Assessment” tool with its Intergovernmental Agreements or subawards, which must be completed by Department staff prior to making the award. The Department’s subrecipient monitoring procedures are dependent on the assessed risk level noted in the Subrecipient Risk Assessment tool. Federal regulations [2 CFR Part 200 Section F] state that a non-federal entity that expends $1,000,000 or more in federal awards during the non-federal entity’s fiscal year must have a Single Audit conducted in accordance with 2 CFR 200.514. The Department’s Internal Audit Division staff tracks and receives Single Audit reports from its subrecipients. As part of the Department’s monitoring procedures, the Internal Audit Division personnel complete a “Single Audit Report Review Summary” form to show they reviewed the subrecipient’s Single Audit report, summarized any findings, and concluded on any risks presented to the Department and any related future actions to be taken. The form is signed by a Department preparer and a Department reviewer. For those subrecipients not required to file a Single Audit, an “Audit Division Single Audit Certification Form” must still be submitted by the subrecipients to the Department. These forms note that the entity was exempt from a Single Audit. What was the purpose of our audit work and what work was performed? The purpose of our audit work was to determine if the Department complied with federal requirements for subrecipient monitoring during Fiscal Year 2024 for the Formula Grants for Rural Areas and Tribal Transit Program, Highway Safety Cluster, and the SLFRF program and to determine whether the Department had adequate internal controls over subrecipient monitoring. As part of our audit work, we reviewed the Department’s internal controls over compliance for subrecipient monitoring and tested the Department’s compliance with federal subrecipient monitoring requirements. Specifically, we performed the following testwork related to each of the following federal programs: • Formula Grants for Rural Areas and Tribal Transit Program—We selected and reviewed a random sample of 40 subrecipient payment transactions. We reviewed subawards, amendments, and other supporting documentation provided by the Department. • Highway Safety Cluster—We selected and reviewed a random sample of 40 subrecipient payment transactions. We reviewed subawards, amendments, and other supporting documentation provided by the Department. • SLFRF—We selected and reviewed a random sample of 29 subrecipient payment transactions. We reviewed Intergovernmental Agreements, amendments, and other supporting documentation provided by the Department. How were the results of the audit work measured? Our audit work was designed to measure the Department’s compliance with the following criteria: • Federal regulation [2 CFR 200.303] states that the Department, as a federal grant recipient, must “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” • Federal regulation [2 CFR 200.332 (a)(1)] states that the Department’s subawards must clearly identify certain information, including but not limited to, the ALN, the Federal Award Date, and the FAIN. • Federal regulation [2 CFR 200.331] states that a pass-through entity, in this case the Department, must make case-by-case determinations as to whether each agreement it makes for the disbursement of federal program funds represents a payment of funds to a subrecipient or a contractor, depending on the role the entity plays. What problems did the audit work identify? We determined that the Department did not fully comply with subrecipient monitoring requirements during Fiscal Year 2024. Specifically, we noted the following: • Formula Grants for Rural Areas and Tribal Transit Program o For 10 of 40 (25 percent) subrecipient payment transactions selected for testing, we determined the subaward documents did not contain the federal award date in the subaward agreement, as required. The 10 transactions totaled $7,432,248 in subrecipient awards. • Highway Safety Cluster o For 1 of 40 (3 percent) subrecipient payment transactions selected for testing, we determined that the subrecipient should have been classified as a contractor, not a subrecipient. The transaction totaled $75,325. The Department had not made an adjusting entry in CORE to reclassify the transaction and correct this error by the end of our audit testwork. o For 5 of 40 (13 percent) subrecipient payment transactions selected for testing, we determined the subaward documents did not contain the federal award date in the subaward agreement. The 5 transactions totaled $25,100 in subrecipient awards. • SLFRF o For 2 of 29 (7 percent) subrecipient payment transactions selected for testing, we determined that the Intergovernmental Agreement did not include the FAIN and Federal Award Dates. The 2 transactions totaled $3,277,779 in subrecipient awards. o For 1 of 29 (3 percent) subrecipient payment transactions selected for testing, we determined the transaction did not include the ALN. This transaction totaled $1,851,279 in subrecipient awards. Why did these problems occur? The Department’s procedures and internal controls were not sufficient to ensure that Intergovernmental Agreements and subawards included all the required information to be included in the subaward, and internal controls did not prevent or detect errors. Department staff were not aware that this information was needed for the subaward to be in compliance with federal regulations. In some situations, the FAIN was only provided to the Department from the U.S. Department of Transportation subsequent to when the subaward was made. In these instances, the Department was not aware that they were required to provide the FAIN to their subrecipients once it was determined by the U.S. Department of Transportation. The Department’s procedures and internal controls were not sufficient to ensure that payments were properly classified as general disbursements or subrecipient payments, and internal controls did not prevent or detect errors. Department staff lacked the appropriate knowledge of the difference in contractors and subrecipients to ensure the proper classification of expenditures. The Department’s reviewers did not complete a sufficient review of the expense classifications to be able to identify the misclassification and propose a subsequent correction. Why do these problems matter? Based on the issues we identified, the Department is out of compliance with federal subrecipient requirements and could face sanctions or other penalties. In addition, by failing to properly report the required federal grant award information at the time of subaward issuance, subrecipients may be uninformed about what funding the subaward related to. This could result in misclassification of subaward information on the subrecipients’ Schedules of Expenditures of Federal Awards (SEFA) and the subrecipient may not know what federal requirements they need to follow as part of receiving the federal award funds. The Department’s improper classification of expenses as general disbursements versus subrecipient payments could lead to misstatements in the amounts reported on the SEFA, both for the State as a whole and at the subrecipient level. See "Schedule of Findings and Questioned Costs" for chart/table. Recommendation 2024-058 The Department of Transportation (Department) should strengthen its internal controls over and ensure that it complies with federal subrecipient monitoring requirements for the Formula Grants for Rural Areas and Tribal Transit Program, the Highway Safety Cluster, and the Coronavirus State and Local Fiscal Recovery Funds. Specifically, the Department should ensure that all required information is included in subawards or intergovernmental agreements or provide amendments to the subawards or intergovernmental once the Department receives the necessary information from the federal government, and that Department staff are sufficiently aware of the difference in subrecipients and contractors and properly classify general disbursements versus subrecipient payments. Response Department of Transportation Agree Implementation Date: June 2026 Department will strengthen controls to ensure that the required award information is provided, once available. Certain information such as Federal Award Identification Number and Federal Transit Administration and National Highway Traffic Safety Administration award date are not available at the time of contracting CDOT is working on a process to provide this information, once it is available in a publicly available format on CDOT’s website or on a subrecipient facing grant management site. We will add a note to the contract explaining where the information will be posted on our site when it becomes available. The Department will also identify staff requiring additional training on classification and coding for contractors vs. subrecipients.
Program: AL 84.010 – Title I Grants to Local Educational Agencies – Subrecipient Monitoring Grant Number & Year: All open, including S010A230027, FFY 2024; S010A240027, FFY 2025 Federal Grantor Agency: U.S. Department of Education Criteria: 2 CFR § 200.332 (January 1, 2024, and January 1, 2025) requires a pass-through entity to monitor the activities of subrecipients as necessary to ensure that subaward funds are used for authorized purposes in compliance with Federal regulations, track Single audit requirements and verify that a Single audit was obtained if required, review financial and performance reports of the subrecipient, and follow-up and resolve all audit finding pertaining to the Federal award. 2 CFR § 200.501 (January 1, 2024), as it applies to audit requirements of entities for fiscal years ended prior to October 1, 2025, states the following: (a) Audit required. A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. (b) Single audit. A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514[.] Good internal control requires policies and procedures to ensure that subrecipient monitoring is sufficiently designed and performed regularly to provide assurance that grant funds are used in accordance with Federal requirements. This includes maintaining adequate documentation to support fiscal monitoring performed for Federal programs and documentation of follow-up procedures performed when subrecipients are expected to have Federal expenditures exceeding Federal audit requirement thresholds but do not receive a Federal Single audit. Condition: The Agency’s procedures can be improved to ensure that: • Subrecipients’ uses of funds were monitored to ensure compliance with all Federal and grant requirements. • Subrecipients obtain Single audits mandated by Federal requirements. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: The Agency disbursed $106,911,261 of Title I Federal funds to 242 different subrecipients during the fiscal year ended June 30, 2025. We noted the following during our subrecipient monitoring testing. Insufficient Subrecipient Fiscal Monitoring Procedures Per its fiscal monitoring procedures and schedule, the Agency is to perform fiscal monitoring of the various subrecipients on a three-year rotational cycle. These procedures include reviewing subrecipient expenditures claimed for subgrant awards applicable for the period the Agency is monitoring. We randomly selected 25 subrecipients to review the fiscal monitoring documentation provided by the Agency. We noted the following for two subrecipients: • For one subrecipient tested, the fiscal monitoring was last completed in August 2021 for the 2019–2020 program year, during which no compliance errors were noted. Per the Agency, fiscal monitoring was scheduled to be performed again in calendar year 2023 for the 2022–2023 program year; however, this monitoring was never performed. As of June 30, 2025, no fiscal monitoring review had been initiated. Additionally, during a review of reimbursement requests submitted during the fiscal year, we noted some questionable expenditures, including $3,027 spent on hotels at Disney’s Animal Kingdom in Florida, which were reportedly in association with a teaching conference held eight miles away at the Orlando World Center Marriott. The daily rate charged by the hotel was $299 per night; the Government Services Administration’s rate for lodging in Orlando for June 2024 was $140 per night. We also noted that a possible travel expenditure of $955 was paid to Holiday Express for which no support was obtained. These types of higher-risk expenditures further highlight the need for subrecipient monitoring to be performed regularly. • For another subrecipient, the Agency last completed its fiscal monitoring in August 2025 for the 2023–2024 program year. However, monitoring documentation was not sufficient to determine what monitoring procedures were completed or whether that monitoring was adequate. While we did observe various records on file, including employee time and effort logs and invoices supporting supplies and service costs, the audit worksheet that the Agency is supposed to complete for all fiscal monitoring performed did not indicate what items were reviewed or the conclusion regarding those items. We did observe an exit letter issued by the Agency in August 2025, which indicated that no issues were found. Single Audit Tracking Procedures During our review of subrecipient audits and Single audit tracking procedures implemented by the Agency, we noted that, for one subrecipient tested, the Agency had identified the subrecipient as having more than $750,000 in Federal expenditures for the subrecipient’s fiscal year ended August 31, 2024, but noted that no Single audit was required. After we inquired with the Agency, no documentation could be provided to support that the Agency performed any follow-up procedures to verify that a Single audit was not required. Cause: Inadequate procedures to ensure that subrecipients complied with all Federal and grant requirements or to ensure that subrecipients obtained Single audits when required. Effect: Without adequate monitoring and review procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency strengthen procedures to ensure that subrecipient monitoring is properly designed to ensure compliance with all Federal and grant requirements and that documentation is maintained to support procedures performed. We also recommend the Agency strengthen procedures to ensure that subrecipient Single audit requirements are properly tracked, and all Single audits are reviewed in a timely manner. Management Response: NDE agrees with this finding.
2025-003: Noncompliance related to SEFA, FAC Reports, and Single Audits for fiscal years ended June 30, 2022, 2023, and 2024 Federal Assistance Listing Number: 10.553, 10.555, 10.559, 84.041, 84.010A, 84.060, 84.358B, 84.365, 84.367, 84.323, 84.424A, 84.425D, 84.425U, 84.048, 94.243, and others potentially unknown in prior years. Federal Award Year(s): Multiple Program Title(s): Multiple Name of Federal Agency(ies): U.S. Department of Agriculture, U.S. Department of Education, and U.S. Department of Health and Human Services Name of Pass-Through Entity(ies): Various, including the Colorado Department of Education, Colorado Community Colleges System, and Colorado Department of Human Services COVID-19 Program(s): Yes Criteria: Section 200.510b of the Code of Federal Regulations Title 2, Subtitle A, Chapter II, Part 200, Subpart F (also known as 2CFR200) states that the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with section 200.502. In addition, in accordance with Section 200.501(a) and (b) of the 2CFR200, a non-Federal entity that expended $750,000 or more in Federal awards during the non-Federal entity’s fiscal year (2022, 2023, and 2024) must have a Single Audit conducted on major Federal programs in accordance with 200.514. The FAC report is required to be submitted the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Condition: The District has not prepared a schedule of expenditures of federal awards (SEFA), did not have an auditor conduct Single Audits on major Federal programs, and failed to submit the required report to the Federal Audit Clearinghouse (FAC.gov) for the fiscal years ended June 30, 2022, 2023, and 2024 (prior three fiscal years). The FAC report is required to be submitted the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The District lacked internal controls and awareness of the requirements noted above to prepare the SEFA, conduct an annual Single Audit, and submit an annual FAC.gov report in a timely manner. Effect: The District was noncompliant with multiple requirements of the 2CFR200 for fiscal years ended June 30, 2022, 2023, and 2024. This noncompliance impacts multiple federal grant programs and may impact future federal awards and require increased oversight, heightened risk classification, and/or special monitoring, if imposed by the grantor. The District had conversations with the Colorado Department of Education and obtain an understanding of the impacts of this noncompliance. Additional requirements may be imposed on the District by grantors as a result of this noncompliance and backlog of Single Audits on major Federal programs. Repeat Finding: No. Questioned Costs: Questioned costs are not known, because the Single Audits on major Federal programs for fiscal years ended June 30, 2022, 2023, and 2024, was not performed. However, there is likelihood and potential for questioned costs or fraud that has not been identified without the completion of the Single Audits on major Federal programs. Recommendation: The District must discuss with the grantors regarding this noncompliance and potential remedies, including the backlog of Single Audits on major Federal programs for fiscal years ended June 30, 2022, 2023, and 2024. In the future, we highly recommend that the District maintain proper internal controls and accurate grant records to prepare an accurate SEFA that will allow auditors to perform the Single Audits on major Federal programs, and submit the FAC report in a timely manner. We also recommend that the District evaluate the options to remedy the backlog of Single Audits and internally determine the best course of action for the District.
Condition During our audit of the School Board’s financial statements for the year ended June 30, 2025, we encountered circumstances that imposed pervasive limitations on the scope of our audit. Specifically: • We were unable to obtain sufficient appropriate audit evidence regarding significant financial statement balances, transactions, and disclosures. • Accounting records and supporting documentation necessary to perform audit procedures were incomplete, unavailable, or unreliable. • Management representations, including written representations required under auditing standards, could not be relied upon due to concerns regarding the reliability of management representations. • These conditions, combined with the risk that management could override internal controls, further limited our ability to obtain evidence that financial reporting was complete and accurate. In addition, these same conditions prevented us from performing required audit procedures over the School Board’s federal programs, including testing of internal control over compliance and compliance with applicable federal statutes, regulations, and terms and conditions of federal awards. As a result, we were unable to obtain sufficient appropriate audit evidence to support an opinion on compliance for each major federal program. Criteria Uniform Guidance (2 CFR §200.303 and §200.514) requires non-federal entities to establish and maintain effective internal control over federal programs and to provide auditors with access to records and personnel necessary to perform a Single Audit. Uniform Guidance §200.516 requires auditors to report material weaknesses and noncompliance when identified. Cause The conditions described above resulted from inadequate recordkeeping and documentation practices, deficiencies in internal control over financial reporting, and management actions and behaviors that restricted the auditor’s ability to obtain reliable audit evidence and representations. These conditions directly impaired the auditor’s ability to perform planned audit procedures and obtain sufficient appropriate audit evidence. These conditions affected both financial reporting and compliance with federal program requirements. Effect Because of these pervasive limitations and the risk of management override, we were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. The potential effects on the financial statements are both material and pervasive, and therefore we issued a disclaimer of opinion on the School Board’s financial statements for the year ended June 30, 2025. For the same reasons, we were also unable to obtain sufficient appropriate audit evidence to support an opinion on compliance for each of the School Board’s major federal programs and on internal control over compliance. Accordingly, we disclaimed an opinion on compliance for each major federal program under the Single Audit. Context Questioned costs could not be determined due to the disclaimer of opinion. Recommendation We recommend that the School Board take immediate action to strengthen its internal control environment. Specifically, management should: • Ensure that all accounting records and supporting documentation are complete, accurate, and readily available. • Enforce oversight of financial reporting and internal control procedures. • Promote transparency, accountability, and cooperation with auditors to facilitate future audits. • Implement measures to mitigate the risk of management override, including additional supervisory review, approval requirements, and segregation of duties. • Ensure compliance documentation for federal programs is complete, accurate, and available for audit. Views of Responsible Officials and Planned Corrective Action A. OBJECTION On December 29, 2025, following LPSB’s submission of its Response to the Draft Findings of Kolder, Slaven, and Company, LLC (“KS&C”) relating to its 2024-2025 Annual Audit, LPSB received two additional findings characterized as Disclaimers of Opinion. The issuance of these post-response Disclaimers of Opinion regarding the findings highlights KS&C’s apparent lack of objectivity and its failure to adhere to generally accepted government auditing standards in conducting the 24-25 audit. A Disclaimer of Opinion “is expressed when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.”1 According to LLA, “a local auditee that provides for an audit report with a disclaimer of opinion” is regarded as being in noncompliance with its reporting requirements to LLA under the audit law (Louisiana Revised Statute 24:513). LLA further expects the CPA to include in such a report a finding that provides a full explanation for the disclaimer of opinion.2 The two supplemental responses provided are, however, substantially lacking the “full explanation” mandated by the Legislative Auditors for the serious allegations being presented by KS&C. As with its other findings, these recent findings fail to cite any specific conditions present during the audit period that would have precluded KS&C from forming a conclusion. Therefore, as with the original findings, LPSB, on January 6, 2026, again requested that KS&C provide supporting evidence for its claim that it was unable to obtain “evidence regarding significant financial statement balances, transactions, and disclosures.” KS&C responded by stating that these new findings were based on Finding 16 - Invoices Paid Without Sufficient Supporting Detail (IC & C), Finding 26 - Management Override of Established Internal Controls (IC), Finding 31 - Unsupported Experience-Based Pay Increases (IC), and other undisclosed matters. Notably, none of these specific findings are instances where KS&C was prevented from forming a conclusion. To the contrary, the original findings identified by KS&C reflect otherwise. For instance, in Finding 16, KS&C notes it “tested 539 and identified 213 in which invoices were paid without sufficient documentation.” Despite KS&C’s assertions, LPSB has at no point failed to provide information to KS&C upon request (see Corrective Action sections below). In fact, KS&C issued 33 Findings, each purportedly substantiated by documentation. As stated in LPSB’s Response, a request was made by LPSB for KS&C to produce the referenced specific supporting documentation. However, KS&C declined to provide the documentation. Auditing standards stipulate: “Auditors should document supervisory review, before the report release date, of the evidence that supports the findings and conclusions contained in the audit report.”3 They further require: “Auditors should document any departures from the GAGAS requirements and the effect on the audit and on the auditors’ conclusions when the audit is not in compliance with applicable GAGAS requirements because of law, regulation, scope limitations, restrictions on access to records, or other issues affecting the audit.”4 Despite LPSB, in its Response and communications prior thereto pointing out erroneous references to the law and facts, KS&C refused to modify its findings. Instead, it introduced these two ambiguous Disclaimers of Opinion, alleging that LPSB failed to provide necessary information for KS&C to reach a conclusion. However, a cursory review of its original findings clearly reflect that KS&C did reach conclusions, which they assert were based upon conditions found during their investigation. Which is it? Are KS&C’s findings supported or not? KS&C’s ex post Disclaimers of Opinion not only misrepresent LPSB’s cooperation and full disclosure of information, but they are also predicated upon the unfounded assertion that LPSB’s “representations, including written representations required under auditing standards, could not be relied upon due to concerns regarding the reliability of management representations.” After 33 years of engagement with LPSB audits, KS&C has now made the unwarranted claim that LPSB’s representations are unreliable, without pointing to a specific instance of unreliability. Ironically, it is the auditor’s own representations that are demonstrated to be unreliable, as evidenced by the submission of these two vague and contradictory Disclaimers of Opinion. “[A] CPA cannot enter into the engagement with a pre-conceived notion that the local auditee is doing everything wrong. Going into an engagement with [this] attitude impairs the independence of the CPA firm.” The two findings, submitted after LPSB responded to its original findings, do not meet the standards set forth in the Louisiana Governmental Audit Guide. They contradict the original findings, misrepresent LPSB’s cooperation throughout the audit, insert slanderous statements as to the reliability of LPSB’s representations, and fail to provide a full explanation for the disclaimer of opinion. KS&C should remove these findings from its report. 1 LGAG 400-1160, Types of Auditor’s Opinions 2 LGAG 400-1160, Types of Auditor’s Opinions 3 GAO-24, Sections 6.31 (emphasis added) 4 GAO-24, Sections 6.32 B. CORRECTIVE ACTION Prior to the financial audit, Lafayette Parish School Board (LPSB) staff prepared reports and documentation for at least 185 requests that were made by the external auditors. These requests consisted of, but were not limited to, all General Ledger data and information on all Major and Non Major Funds (i.e. General Fund, Construction Funds, Debt Service Funds, and Special Revenue funds), worksheets, personnel records, copies of checks, copies of invoices, grant reimbursement requests, expenditure detail reports, capital asset data and reports, accounts payable data and reports, the type of computer equipment used (including the software and operating systems), construction related documents, copies of contracts, insurance invoices, schedules of judgments and agreements, check registers, calendars, securities pledged, accounts payable details, financial statements, schedule of construction contracts, retirement reports, listing of new hires, purchase orders, check requests, financial reconciliations, sales tax reports and documents, other insurance related documents, insurance policies, monitoring reports, AFR report, arbitrage documentation, copies of deposits receipts, copies of budgets, outstanding checks, revenue reports, expenditure reports, and balance sheet reports. Under the Department of Education agreed upon procedures audit, LPSB staff provided Class size data, PEP data and a user guide. Under the Statewide Agreed Upon procedure, LPSB staff provided proof of required trainings such as ethics, bond insurance policies, list of all bank accounts, a listing of employees, officials employed during the year, and a list of deposit and collection sites. Other requests from our external auditors may come via email throughout the audit process and responses are provided likewise. All of the items listed above, and other items that were not listed above, are routinely provided each year. For several decades this has been the standard and nothing has changed in terms of provided supporting documentation within this particular audit. Internal controls have been in place for many decades. The external auditors have been reviewing, studying and auditing our internal controls for three decades. Over the years, LPSB internal controls have been adjusted, strengthened or heighten to prevent operational deficiencies, fraud and/or non-compliance of which the auditors have contributed to its advancement. Substantially, there has been no change to internal controls as they are in place for a reason. Systematically, internal controls are planted and executed in various areas and departments for various functions and/or lawful requirements. The biggest threats to any organization are misappropriation or improper disbursement of funds. Neither have occurred, because internal controls such as the utilization of electronic requisitions and check request processes were in place to ensure goods and services were precured properly and vendor payments were substantiated. LPSB stands by its management representations that have been provided to the auditors. We acknowledge our responsibility for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In addition to supporting documentation, the external auditors had complete access to our financial software to ascertain the completeness and accuracy of our financial records. Auditor’s Response The School Board’s response to this finding contains statements and characterizations that are inconsistent with the audit evidence obtained and the procedures performed. The auditor stands by the condition, criteria, cause, and effect as presented in the finding, which are based on documentation, observations, interviews, and other information available during the audit. Management’s response has not resulted in any change to the finding or the auditor’s conclusions.
Condition During our audit of the School Board’s financial statements for the year ended June 30, 2025, we encountered circumstances that imposed pervasive limitations on the scope of our audit. Specifically: • We were unable to obtain sufficient appropriate audit evidence regarding significant financial statement balances, transactions, and disclosures. • Accounting records and supporting documentation necessary to perform audit procedures were incomplete, unavailable, or unreliable. • Management representations, including written representations required under auditing standards, could not be relied upon due to concerns regarding the reliability of management representations. • These conditions, combined with the risk that management could override internal controls, further limited our ability to obtain evidence that financial reporting was complete and accurate. In addition, these same conditions prevented us from performing required audit procedures over the School Board’s federal programs, including testing of internal control over compliance and compliance with applicable federal statutes, regulations, and terms and conditions of federal awards. As a result, we were unable to obtain sufficient appropriate audit evidence to support an opinion on compliance for each major federal program. Criteria Uniform Guidance (2 CFR §200.303 and §200.514) requires non-federal entities to establish and maintain effective internal control over federal programs and to provide auditors with access to records and personnel necessary to perform a Single Audit. Uniform Guidance §200.516 requires auditors to report material weaknesses and noncompliance when identified. Cause The conditions described above resulted from inadequate recordkeeping and documentation practices, deficiencies in internal control over financial reporting, and management actions and behaviors that restricted the auditor’s ability to obtain reliable audit evidence and representations. These conditions directly impaired the auditor’s ability to perform planned audit procedures and obtain sufficient appropriate audit evidence. These conditions affected both financial reporting and compliance with federal program requirements. Effect Because of these pervasive limitations and the risk of management override, we were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. The potential effects on the financial statements are both material and pervasive, and therefore we issued a disclaimer of opinion on the School Board’s financial statements for the year ended June 30, 2025. For the same reasons, we were also unable to obtain sufficient appropriate audit evidence to support an opinion on compliance for each of the School Board’s major federal programs and on internal control over compliance. Accordingly, we disclaimed an opinion on compliance for each major federal program under the Single Audit. Context Questioned costs could not be determined due to the disclaimer of opinion. Recommendation We recommend that the School Board take immediate action to strengthen its internal control environment. Specifically, management should: • Ensure that all accounting records and supporting documentation are complete, accurate, and readily available. • Enforce oversight of financial reporting and internal control procedures. • Promote transparency, accountability, and cooperation with auditors to facilitate future audits. • Implement measures to mitigate the risk of management override, including additional supervisory review, approval requirements, and segregation of duties. • Ensure compliance documentation for federal programs is complete, accurate, and available for audit. Views of Responsible Officials and Planned Corrective Action A. OBJECTION On December 29, 2025, following LPSB’s submission of its Response to the Draft Findings of Kolder, Slaven, and Company, LLC (“KS&C”) relating to its 2024-2025 Annual Audit, LPSB received two additional findings characterized as Disclaimers of Opinion. The issuance of these post-response Disclaimers of Opinion regarding the findings highlights KS&C’s apparent lack of objectivity and its failure to adhere to generally accepted government auditing standards in conducting the 24-25 audit. A Disclaimer of Opinion “is expressed when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.”1 According to LLA, “a local auditee that provides for an audit report with a disclaimer of opinion” is regarded as being in noncompliance with its reporting requirements to LLA under the audit law (Louisiana Revised Statute 24:513). LLA further expects the CPA to include in such a report a finding that provides a full explanation for the disclaimer of opinion.2 The two supplemental responses provided are, however, substantially lacking the “full explanation” mandated by the Legislative Auditors for the serious allegations being presented by KS&C. As with its other findings, these recent findings fail to cite any specific conditions present during the audit period that would have precluded KS&C from forming a conclusion. Therefore, as with the original findings, LPSB, on January 6, 2026, again requested that KS&C provide supporting evidence for its claim that it was unable to obtain “evidence regarding significant financial statement balances, transactions, and disclosures.” KS&C responded by stating that these new findings were based on Finding 16 - Invoices Paid Without Sufficient Supporting Detail (IC & C), Finding 26 - Management Override of Established Internal Controls (IC), Finding 31 - Unsupported Experience-Based Pay Increases (IC), and other undisclosed matters. Notably, none of these specific findings are instances where KS&C was prevented from forming a conclusion. To the contrary, the original findings identified by KS&C reflect otherwise. For instance, in Finding 16, KS&C notes it “tested 539 and identified 213 in which invoices were paid without sufficient documentation.” Despite KS&C’s assertions, LPSB has at no point failed to provide information to KS&C upon request (see Corrective Action sections below). In fact, KS&C issued 33 Findings, each purportedly substantiated by documentation. As stated in LPSB’s Response, a request was made by LPSB for KS&C to produce the referenced specific supporting documentation. However, KS&C declined to provide the documentation. Auditing standards stipulate: “Auditors should document supervisory review, before the report release date, of the evidence that supports the findings and conclusions contained in the audit report.”3 They further require: “Auditors should document any departures from the GAGAS requirements and the effect on the audit and on the auditors’ conclusions when the audit is not in compliance with applicable GAGAS requirements because of law, regulation, scope limitations, restrictions on access to records, or other issues affecting the audit.”4 Despite LPSB, in its Response and communications prior thereto pointing out erroneous references to the law and facts, KS&C refused to modify its findings. Instead, it introduced these two ambiguous Disclaimers of Opinion, alleging that LPSB failed to provide necessary information for KS&C to reach a conclusion. However, a cursory review of its original findings clearly reflect that KS&C did reach conclusions, which they assert were based upon conditions found during their investigation. Which is it? Are KS&C’s findings supported or not? KS&C’s ex post Disclaimers of Opinion not only misrepresent LPSB’s cooperation and full disclosure of information, but they are also predicated upon the unfounded assertion that LPSB’s “representations, including written representations required under auditing standards, could not be relied upon due to concerns regarding the reliability of management representations.” After 33 years of engagement with LPSB audits, KS&C has now made the unwarranted claim that LPSB’s representations are unreliable, without pointing to a specific instance of unreliability. Ironically, it is the auditor’s own representations that are demonstrated to be unreliable, as evidenced by the submission of these two vague and contradictory Disclaimers of Opinion. “[A] CPA cannot enter into the engagement with a pre-conceived notion that the local auditee is doing everything wrong. Going into an engagement with [this] attitude impairs the independence of the CPA firm.” The two findings, submitted after LPSB responded to its original findings, do not meet the standards set forth in the Louisiana Governmental Audit Guide. They contradict the original findings, misrepresent LPSB’s cooperation throughout the audit, insert slanderous statements as to the reliability of LPSB’s representations, and fail to provide a full explanation for the disclaimer of opinion. KS&C should remove these findings from its report. 1 LGAG 400-1160, Types of Auditor’s Opinions 2 LGAG 400-1160, Types of Auditor’s Opinions 3 GAO-24, Sections 6.31 (emphasis added) 4 GAO-24, Sections 6.32 B. CORRECTIVE ACTION Prior to the financial audit, Lafayette Parish School Board (LPSB) staff prepared reports and documentation for at least 185 requests that were made by the external auditors. These requests consisted of, but were not limited to, all General Ledger data and information on all Major and Non Major Funds (i.e. General Fund, Construction Funds, Debt Service Funds, and Special Revenue funds), worksheets, personnel records, copies of checks, copies of invoices, grant reimbursement requests, expenditure detail reports, capital asset data and reports, accounts payable data and reports, the type of computer equipment used (including the software and operating systems), construction related documents, copies of contracts, insurance invoices, schedules of judgments and agreements, check registers, calendars, securities pledged, accounts payable details, financial statements, schedule of construction contracts, retirement reports, listing of new hires, purchase orders, check requests, financial reconciliations, sales tax reports and documents, other insurance related documents, insurance policies, monitoring reports, AFR report, arbitrage documentation, copies of deposits receipts, copies of budgets, outstanding checks, revenue reports, expenditure reports, and balance sheet reports. Under the Department of Education agreed upon procedures audit, LPSB staff provided Class size data, PEP data and a user guide. Under the Statewide Agreed Upon procedure, LPSB staff provided proof of required trainings such as ethics, bond insurance policies, list of all bank accounts, a listing of employees, officials employed during the year, and a list of deposit and collection sites. Other requests from our external auditors may come via email throughout the audit process and responses are provided likewise. All of the items listed above, and other items that were not listed above, are routinely provided each year. For several decades this has been the standard and nothing has changed in terms of provided supporting documentation within this particular audit. Internal controls have been in place for many decades. The external auditors have been reviewing, studying and auditing our internal controls for three decades. Over the years, LPSB internal controls have been adjusted, strengthened or heighten to prevent operational deficiencies, fraud and/or non-compliance of which the auditors have contributed to its advancement. Substantially, there has been no change to internal controls as they are in place for a reason. Systematically, internal controls are planted and executed in various areas and departments for various functions and/or lawful requirements. The biggest threats to any organization are misappropriation or improper disbursement of funds. Neither have occurred, because internal controls such as the utilization of electronic requisitions and check request processes were in place to ensure goods and services were precured properly and vendor payments were substantiated. LPSB stands by its management representations that have been provided to the auditors. We acknowledge our responsibility for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In addition to supporting documentation, the external auditors had complete access to our financial software to ascertain the completeness and accuracy of our financial records. Auditor’s Response The School Board’s response to this finding contains statements and characterizations that are inconsistent with the audit evidence obtained and the procedures performed. The auditor stands by the condition, criteria, cause, and effect as presented in the finding, which are based on documentation, observations, interviews, and other information available during the audit. Management’s response has not resulted in any change to the finding or the auditor’s conclusions.
Assistance Listing Number, Federal Agency, and Program Name: Across all major programs Federal Award Identification Number and Year: Across all major programs Pass-through Entity – N/A Finding Type – Material weakness in internal control over compliance and noncompliance with Uniform Guidance Single Audit reporting package submission requirement. Repeat Finding – This is a repeat finding and a similar finding was identified in the prior year as Finding 2024-003. Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2025. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause/Effect – The Agency’s books and records for the 2025 fiscal year were not reconciled or closed in a timely manner. Therefore, the data collection form was not submitted within the required time. Recommendation – We recommend that the Agency maintain a system of policies, procedures, and controls to ensure that the financial records closed in a timely manner in order to facilitate the timely submission of the data collection form. View of Responsible Officials and Corrective Action Plan – The Agency will take all reasonable measures to work with the new auditors to complete the audit process and submit the data collection report within the required time period
Significant Deficiency Finding No. 2025-004: Reporting U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Federal Assistance Listing Number 93.243. U.S. Department of Health and Human Services Health Care for Native Hawaiians Federal Assistance Listing Number 93.932.Criteria A non-Federal entity that expends $750,000 or more in Federal awards during the year must have a single audit conducted in accordance with 2 CFR §200.514. Pursuant to 2 CFR §200.512, the audit must be completed and Form SF-SAC: Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after year end of the audit period. Condition Due to the unexpected resignation of its independent auditor, we noted that the Organization has not submitted the single audit reports required by the Uniform Guidance, including the Data Collection Form to the Federal Audit Clearinghouse for the year ended June 30, 2025, within the stipulated nine months after the end of the audit period. Cause The Organization has not adhered to established Uniform Guidance terms and conditions regarding the submission dates of the single audit reports and Data Collection Form for the year ended June 30, 2025. Effect The Organization is not in compliance with the Uniform Guidance terms and conditions regarding the submission dates of the single audit report and Data Collection Form for the year ended June 30, 2025. Identification of a Repeat Finding This finding was reported as a federal award finding in the immediately previous audit as Finding No. 2024-004.Recommendation We again recommend that the Organization incorporate internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form. Views of Responsible Officials and Planned Corrective Action The Organization concurred with the prior year (2024-004) and current year renumbered recommendation (2025-004), acknowledging that the unexpected resignation of the former independent auditor (January 2023), and the domino effect of a delay in securing a new independent auditor (April 2023) and completion of single audits continued to challenge the Organization through the fiscal year ended June 30, 2025. The Organization notes the following: A. Status and Progress of Single Audits 1. Single Audit as of fiscal year ended (FYE) June 30, 2022, filed in the Federal Audit Clearinghouse (FAC) on February 20, 2025. 2. Single Audit as of FYE June 30, 2023, filed in the FAC on March 9, 2026. 3. Single Audit as of FYE June 30, 2024, filed in the FAC on June 20, 2026. 4. Single Audit as of FYE June 30, 2025, projected for filing in the FAC no later than September 30, 2026. Note: Once the FYE June 30, 2025, single audit is filed, the Organization will no longer be delinquent in filing its single audit in the FAC. 5. Single Audit as of FYE June 30, 2026, engagement letter signed with scheduled field work to commence after the June 30, 2025, FAC filing (e.g., October 2026); with a projected on-time FAC filing no later than March 31, 2027, in compliance with 2 CFR §200.514 – Standards and scope of audit; and 2 CFR §200.512 – Report submission via Form SF-SAC: Data Collection Form, nine months after year end of the audit period. B. Policy, Process and Communications re: Single Audits, the Organization implemented the following policy, process and communications practices: 1. Financial Policies: Internal Control Environment Policy, Implementation of Significant Accounting Policies. 2. Process: Review and Approve Audit Report, including Financial Statements. 3. Communication of the status of the single audit(s) via Memo to the Board occurred in February, March, May, June and August 2026; and as a continuing practice will be completed for each Board meeting.
Federal Agency: United States Department of Agriculture (USDA) Federal Program: 10.558 Child and Adult Care Food Program (CACFP) 2024 and 2025 CACFP 2024 and 2025 CACFP-CIL 2024 and 2025 CACFP-SPON State Agency: Department of Health and Senior Services (DHSS) - Bureau of Community Food and Nutrition Assistance (BCFNA) Type of Finding: Internal Control (Material Weakness) and Material Noncompliance Questioned Costs: Unknown Compliance Requirement: Subrecipient Monitoring As noted in our two previous audits, during the year ended June 30, 2025, BCFNA subrecipient monitoring procedures were not in compliance with subrecipient monitoring requirements and were not sufficient to ensure CACFP subrecipient compliance with program requirements. As noted at finding 2025-010, audit sample results show the subrecipient payment error rate continued to increase. The BCFNA has implemented only a few changes to address our prior-year audit findings and strengthen monitoring procedures. During the year ended June 30, 2025, the BCFNA disbursed approximately $69.9 million to over 730 CACFP subrecipients, which consist of child and adult care centers and sponsors of centers. Disbursements to subrecipients represented approximately 98% of the program's expenditures. As part of its pass-through responsibilities, 7 CFR Section 226.6(a)(5), the BCFNA is required to ensure subrecipients effectively operate the program. Regulation 2 CFR Section 200.332(c) requires pass-through entities to evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring. Regulation 2 CFR Section 200.332(e) requires pass-through entities to monitor the activities of the subrecipient as necessary to ensure the subrecipient complies with federal statutes, regulations, and the terms and conditions of the subaward, and achieves goals and objectives. The BCFNA's subrecipient monitoring process, outlined in the Internal Nutritionist Manual, provides the requirements for monitoring the CACFP facilities/sponsors. The manual provides the planned frequency and type of monitoring activities, monitoring methods, and corrective action requirements. The manual requires the preparation of a risk assessment at the end of each monitoring review that assigns points to the facility/sponsor based on the number and severity of deficiencies and findings, with more deficiencies leading to a higher score. The score determines the required timing of future monitoring reviews of the facility/sponsor. Facilities/sponsors with a score of 0 to 10 points will be next monitored in 3 years, a score of 11 to 25 points within 2 years, a score of 26 to 35 points in 1 year; and facilities/sponsors with a score of 36 or more points are considered "seriously deficient" and are required to submit a Corrective Action Plan (CAP). If the CAP is deemed sufficient, seriously deficient facilities/sponsors will have a CAP verification review in 6 months. A score is not assigned for 6-month CAP verification reviews. During FY25, the BCFNA began performing technical assistance reviews for all new facilities/sponsors. In May 2024, when the BCFNA changed the risk assessment and scoring system, the BCFNA ceased assigning a grade of A, B, B-, or C to each review and widened the score ranges and associated review requirements. DHSS officials indicated the scores assessed by the new system are frequently higher than those assessed under the previous manual system. The impact of these changes on the frequency and effectiveness of the monitoring reviews is unclear. During each monitoring review, BCFNA personnel review documentation supporting a sample of claims during a test month. Any identified errors and associated overclaims/underclaims exceeding established thresholds are recouped/reimbursed in the facility's/sponsor's future claims. When reviews identify noncompliance, facilities/sponsors are required to prepare and submit a CAP to the BCFNA. In addition, as noted at finding number 2025-010, the BCFNA relies on these subrecipient monitoring procedures to prevent and detect meal reimbursement claim errors. Monitoring reviews have identified significant issues and claim errors, including some potentially fraudulent activity, and led to over 15 contract terminations in recent years. To test compliance with subrecipient monitoring requirements, and to evaluate the effectiveness of BCFNA monitoring procedures, we reviewed and analyzed a randomly-selected sample of 60 BCFNA monitoring reviews conducted for 60 CACFP facilities/sponsors during the year ended June 30, 2025. While our review found the sample monitoring reviews were performed in accordance with the policies and procedures outlined in the Internal Nutritionist Manual, we identified areas where these policies and procedures could be strengthened and improved to ensure facilities/sponsors comply with program requirements and submit proper claims. Our review and analysis of the 60 sampled monitoring reviews noted the monitoring reviews identified significant errors, noncompliance, disallowances, and overclaims. Our comparison of the sampled reviews to prior reviews noted deficient facilities/sponsors generally had continued deficiencies and little improvement from prior reviews, as follows: • Of the 58 sampled monitoring reviews assigned a score, 26 (45%) facilities/sponsors had a score of 10 or less, while 32 (55%) had a score of 11 or more. • Of the 29 facilities/sponsors that had a score of 11 or more and had a prior review, 27 (93%) had the same or higher score than the prior review indicating a lack of significant improvement or decline in compliance since the prior review. • Of the 2 facilities/sponsors that had a score of 36 or more and had a prior review, both had higher scores than the prior review. • For 50 of 58 monitoring reviews (86%) for which the BCFNA tested claims and quantified errors (with claims totaling $568,271 during the test months), the BCFNA identified overclaims totaling $72,561 and underclaims totaling $4,275, netting to $68,286, or at least 12% of the reimbursements tested. As noted at finding 2025-010, audit sample results show the subrecipient payment error rate increased from prior years. Our review of BCFNA subrecipient monitoring procedures during the year ended June 30, 2025, noted areas that should be strengthened and improved. Claims testing The Internal Nutritionist Manual and monitoring practices provide for testing of a sample of claims within only 1 test month during each monitoring review, and do not provide for expanded testing when significant errors are identified. For example, 2 facilities had 100% overpayment rates and were assigned scores of 34 and 13; however, additional testing was not performed for either facility. Neither facility was deemed "seriously deficient;" and the facilities were scheduled to be next reviewed in 1 year and 2 years, respectively. BCFNA personnel indicated monitoring reviews are limited to only 1 test month since the USDA Monitoring Handbook does not require expanded testing of records beyond 1 month. However, the USDA Monitoring Handbook suggests testing activities during 1 test month, and also suggests the state agency may determine additional review is warranted and review records beyond the test month to determine the extent of the noncompliance. When significant errors are identified, additional testing would help BCFNA nutritionists determine the extent that instances of noncompliance are isolated versus pervasive. Such information would be valuable to the overall conclusions and points assigned to the review, and in decisions regarding subsequent monitoring. Overclaim recoupment BCFNA subrecipient monitoring procedures do not provide for identification and pursuit of recoupment of all overpayments associated with errors identified during monitoring reviews. When overclaims due to noncompliance with eligibility requirements are identified during monitoring reviews, the BCFNA only identifies and seeks recoupment for the overclaims made during the test month. Overclaims associated with eligibility errors begin at the time the eligibility determination was made and continue until the error is discovered. Although the BCFNA is aware noncompliance occurred during the month(s) before the test month, the BCFNA does not attempt to identify those overclaims. In addition, when a facility/sponsor is terminated, the BCFNA does not always identify or seek recoupment of overclaim amounts. In our sample of 60 monitoring reviews, the contract for 1 sponsor was terminated as a result of a 6-month CAP verification review. For this sponsor, in the review prior to the 6-month CAP verification review, the BCFNA identified and recouped overclaims of $2,879, or 100% of total claims tested. In the subsequent 6-month CAP verification review, significant claim errors were identified in the test month claims paid, which totaled $4,091, and the sponsor was terminated. However, the test month claims were not fully tested, and overclaims were not identified or recouped. Any overclaims not identified and recouped from this sponsor would be considered questioned costs; however, those questioned costs are unknown. BCFNA officials indicated they do not pursue recoupment of overclaims beyond the test month because this practice is allowed by the USDA. They indicated they pursue recoupment of overclaims for facilities/sponsors with terminated contracts on a case-by-case basis, considering various factors. However, 7 CFR Section 226.14 provides that state agencies shall disallow and recover any portion of a claim for reimbursement not properly payable, including claims not made in accordance with recordkeeping requirements. Pursuing full recoupment would hold facilities/sponsors accountable for all overclaims and would serve as a deterrent to future errors, noncompliance, and overclaims. Further, without procedures to identify and recoup all overclaims, there is a risk that significant overclaims will go undetected and unrecouped, and questioned costs could be significant. Conclusions In addition to complying with federal requirements, strong subrecipient monitoring procedures are necessary to ensure facilities/sponsors comply with program requirements, submit proper claims, and address deficiencies identified. Subrecipient monitoring procedures should be designed to prevent future deficiencies and noncompliance. Without strong internal controls, there is increased risk of noncompliance, errors, fraud, waste, and abuse of federal funds. Strong monitoring procedures would ensure facilities/sponsors are held accountable for and correct errors and noncompliance identified. Regulation 2 CFR Section 200.332(h) requires pass-through entities to consider whether the results of a subrecipient's audit, site visits, or other monitoring necessitate adjustments to the pass-through entity's records. Further, 2 CFR Section 200.303(a) requires the recipient to "[e]stablish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Finding classification This finding is classified as a material weakness in internal control and material noncompliance with the federal subrecipient monitoring requirements. Our audit of the BCFNA's compliance with federal subrecipient monitoring requirements concluded the BCFNA did not materially comply with federal requirements to ensure subrecipients effectively operate the CACFP and to monitor the activities of the subrecipient as necessary to ensure the subrecipient complies with federal statutes, regulations, and the terms and conditions of the subaward, and achieves goals and objectives. This conclusion is based on the facts, deficiencies, and noncompliance stated in the finding, including the following: 1) Disbursements to subrecipients represented approximately 98% of the CACFP expenditures. 2) BCFNA subrecipient monitoring reviews identified significant errors, noncompliance, disallowances, and overclaims; and deficiencies identified often continued for years with little improvement from review to review. The 12% subrecipient payment error rate identified by the BCFNA, which exceeds our audit materiality threshold of 4%, along with the high rate of continued noncompliance, serve as indicators of the ineffectiveness of the BCFNA monitoring process. 3) The BCFNA did not comply with federal subrecipient monitoring requirements regarding disallowing and recovering improper payments. 4) Multiple deficiencies in monitoring procedures were identified. In conducting a Single Audit in accordance with 2 CFR Part 200 (Uniform Guidance), auditors are required by 2 CFR Section 200.514(d)(1)(2), to determine whether the auditee has complied with federal statutes, regulations, and the terms and conditions of federal awards that may have a direct and material effect on each of its major programs, as outlined in the OMB Compliance Supplement. While compliance with the USDA CACFP handbooks was considered in our audit, our conclusion on compliance is based on the BCFNA's compliance with the federal statutes and regulations, as required. Our decisions regarding the classification of the internal control deficiencies were made in accordance with AU-C Section 935, Compliance Audits, and the AICPA Audit Guide: Government Auditing Standards and Single Audits (Audit Guide). The Audit Guide provides the following definitions regarding internal control deficiencies: A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. "[A] reasonable possibility exists when the likelihood of the event is either reasonably possible or probable…" Reasonably possible is when "[t]he chance of the future event or events occurring is more than remote but less than likely." Probable means "[t]he future event or events are likely to occur." The failure to design and implement adequate controls and procedures over subrecipient monitoring led to material noncompliance with the subrecipient monitoring requirements. The BCFNA's controls failed to develop an effective subrecipient monitoring process that ensures subrecipients comply with federal statutes, regulations, and the terms and conditions of subawards, and achieve goals and objectives. Because the internal control deficiencies have not been corrected, it is probable that the material noncompliance will continue. For these reasons, the deficiencies are considered a material weakness. Recommendation The DHSS through the BCFNA continue to review, strengthen, and enforce subrecipient monitoring procedures to ensure CACFP facilities/sponsors comply with program requirements, submit proper claims, and address deficiencies identified. The BCFNA should enhance procedures to provide for identification and recoupment of overclaims associated with all errors identified during monitoring reviews, as required by federal regulations; and expand testing when significant errors are identified. The DHSS should identify and recoup the overclaims for the terminated sponsor noted in this finding. Auditee's Response We disagree with the auditor's finding. Our Corrective Action Plan includes an explanation and specific reasons for our disagreement. Auditor's Comment The DHSS Corrective Action Plan (CAP) states the DHSS, for the third year in a row, disagrees with the finding and believes no corrective action is required because (1) they believe subrecipient monitoring, claim recoupment, and risk assessment procedures comply with USDA requirements; and (2) the similar FY23 finding (finding number 2023-013) was closed by the USDA after reviewing the DHSS corrective action plan. The DHSS CAP further states they believe the SAO is holding the DHSS to higher standards than required by federal guidance and regulations and that implementing the SAO's recommendations would cause undue burden on the participants and providers of the program which the USDA warns against. However, in making these statements, the DHSS ignored the noncompliance with specific USDA and Uniform Guidance requirements identified in the finding, and failed to recognize and acknowledge that existing subrecipient reimbursement and monitoring procedures have allowed serious and material subrecipient noncompliance year after year. Furthermore, federal agency closure of a prior year finding does not protect the DHSS from future findings. As of August 2026, the DHSS had received no communication from the USDA regarding the fiscal year 2024 finding. Regarding the finding statement that policies and procedures should be strengthened and improved, the DHSS CAP states the SAO has applied performance audit standards instead of single audit standards. This statement is incorrect. While not required, we have included a finding classification section that outlines the auditor's responsibilities under the single audit, as well as audit guidance followed in making decisions regarding the BCFNA's internal controls and compliance with the federal statutes and regulations. Regarding the finding section pertaining to recoupment of overclaims, the DHSS CAP claims the "BCFNA pursues recoupment of overclaims of only the test month per USDA requirements, although when warranted, additional reviews are conducted beyond the test month. In addition, BCFNA officials pursue recoupment of overclaims for facilities/sponsors with terminated contracts on a case-by-case basis, taking into consideration various factors." While the DHSS makes this claim, in our sample of 60 monitoring reviews, the DHSS did not expand testing beyond the test month for any reviews, and did not seek recoupment of overclaims for the facility/sponsor terminated as a result of the monitoring reviews. As part of its pass-through responsibilities outlined in the federal regulations, the BCFNA is required to ensure subrecipients comply with federal regulations and terms and conditions of the subaward, and effectively operate the program. Given the extent of material subrecipient noncompliance that continues to occur, BCFNA procedures are clearly not sufficient to deter and prevent future noncompliance. The BCFNA has focused on individual components of its systems, but has not holistically evaluated whether the procedures, collectively and in their entirety, comply with the federal requirements intended to ensure subrecipient reimbursements are allowable and supported. The BCFNA continues to strictly follow existing procedures without making adequate adjustments to address and mitigate the serious subrecipient reimbursement problems. Recognizing problems and responding to them are critical components of an effective internal control system designed to ensure compliance with the federal requirements. For three years, the SAO has recommended the BCFNA enhance procedures related to identification and recoupment of overclaims, as required by federal regulations; and expand testing when significant errors are identified. The BCFNA has ignored these recommendations; and as a result, lacks a sufficient method for deterring future noncompliance. While the DHSS argues these recommendations would cause undue burden on the participants of the program and the subrecipients, not implementing these recommendations could cause an undue burden on the DHSS and the subrecipients, since weak consequences or deterrents to noncompliance leads to continued noncompliance, which requires increased monitoring and follow-up efforts. Subrecipient data clearly shows significant subrecipient noncompliance is occurring within the CACFP. These problems cannot be denied and should not be ignored. Until the DHSS recognizes these problems, acknowledges there are weaknesses in its existing procedures, and takes action to strengthen them, significant improper payments to subrecipients will likely continue.
Federal Agency: Department of Health and Human Services (DHHS) Federal Program: 93.777 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare 2024 and 2025 - TITLEXVIII 2024 and 2025 - TITLEXIXSS 2024 and 2025 - CLIA 2024 and 2025 - XVIIIIMPAC State Agency: Department of Health and Senior Services (DHSS) - Section for Long-Term Care Regulation (SLCR) Type of Finding: Nonmaterial Noncompliance Compliance Requirement: Special Tests and Provisions As similarly noted in our 4 prior audit reports, the SLCR did not perform facility survey procedures within required timeframes. In our test of compliance with facility survey requirements for 60 surveys performed during the year ended June 30, 2025, we noted 14 Statements of Deficiencies and Plan of Corrections were sent 11 to 22 days after the survey exit instead of within 10 days, and 3 facility revisits were completed in 69-89 days instead of within 60 days of the initial survey date. The DHSS is the state survey agency charged with inspecting providers of the Medicaid program, including hospitals, nursing facilities, and other long-term care (LTC) facilities. Under 42 CFR Section 431.108, as a basis for participation in Medicaid, providers are subject to survey and certification by the DHHS - Centers for Medicare and Medicaid Services (DHHS-CMS) or the DHSS to ensure providers and suppliers are in compliance with regulatory health and safety standards and conditions of participation. During the year ended June 30, 2025, the DHSS through the SLCR surveyed 518 providers, including 482 LTC nursing facilities, 6 intermediate care facilities for individuals with intellectual disabilities, and 30 non-deemed hospitals. The DHHS-CMS provides the State Operations Manual (SOM) to state agencies as guidelines for the survey and certification of providers. SOM Chapter 2, Section 2728, requires the state agency to mail to the provider a copy of Form CMS-2567 (Statement of Deficiencies and Plan of Correction) within 10 working days after the survey exit. In addition, SOM Chapter 7, Section 7317.2, requires onsite revisits for LTC nursing facilities to occur any time between the last correction date on the plan of correction and the 60th day from the survey date to confirm the facility is in substantial compliance, and in certain cases, has the ability to remain in substantial compliance. To test compliance with survey and certification requirements, we randomly selected surveys performed during the year ended June 30, 2025, or the most recent survey if a survey had not been performed during this period, for 60 facilities including 45 LTC nursing facilities, 5 intermediate care facilities for individuals with intellectual disabilities, and 10 non-deemed hospitals. Due to survey delays and backlogs, 4 of the surveys sampled were performed in state fiscal year 2026, 44 in state fiscal year 2025, and 12 in state fiscal year 2024. Of the 58 facility surveys that required a Statement of Deficiencies and Plan of Correction, 14 statements (24%)were sent to facilities between 11 and 22 working days after the survey exit instead of within 10 working days as required. In addition, of the 26 LTC nursing facilities that required a revisit, the revisit to 3 facilities (12%) was completed 69 to 89 days after the initial survey date instead of within 60 days as required. DHSS officials indicated there were multiple contributing factors for these delays including DHSS staffing shortages, industry labor shortages, insufficient state and federal funding, increased workloads due to increased volume and severity of complaints received and violations identified, transitions to a new federal monitoring software system, and the backlog of surveys due. DHSS officials stated they hired part-time retired surveyors and contracted with outside survey companies to help with the increased workload and backlog. DHSS officials further indicated they are working with the DHHS-CMS to minimize the delays. Conducting survey procedures within required timeframes helps to ensure providers are timely notified of deficiencies requiring correction so that timely follow up on those deficiencies can occur to provide assurance facilities are providing services to their clients that are in compliance with health and safety standards and conditions of participation. Recommendation The DHSS through the SLCR ensure survey procedures are conducted within required timeframes. Auditee's Response We partially agree with the auditor's finding. Our Corrective Action Plan includes an explanation and specific reasons for our disagreement and any planned actions to address the finding. Auditor's Comment The DHSS Corrective Action Plan states the DHSS disagrees a finding and corrective action is needed because (1) the State Auditor's Office (SAO) has determined the errors to be nonmaterial noncompliance, (2) the DHHS-CMS evaluation of DHSS compliance with revisit requirements has deemed the requirements to be "met" (compliance at a level at or exceeding a DHHS-CMS-determined threshold of 70%), and (3) the 3 revisit errors were not truly noncompliance because 1 revisit was not required and 2 revisits could not occur until additional actions were taken to address complaints. In conducting a single audit in accordance with 2 CFR Part 200 (Uniform Guidance), auditors are required by 2 CFR Section 200.514(d)(1)(2), to determine whether the auditee has complied with federal statutes, regulations, and the terms and conditions of federal awards that may have a direct and material effect on each of its major programs, as outlined in the OMB Compliance Supplement. The OMB Compliance Supplement, Part 4, for the Special Tests and Provisions Compliance Requirement directs auditors to "[d]etermine whether the state ensures that hospitals, nursing facilities, and [intermediate care facilities for individuals with intellectual disabilities] that serve Medicaid patients meet the prescribed health and safety standards." As stated in the finding, in making this determination, we review DHSS compliance with the DHHS-CMS SOM requirements. DHSS arguments that the revisit and SOD errors noted in the finding are not noncompliance and/or significant are not valid arguments, as explained below. (1) The SAO has not determined the 24% SOD or 12% revisit error rates to be insignificant. The finding was classified as nonmaterial noncompliance in our evaluation of the state's compliance with all 10 requirements within the Special Tests and Provisions Compliance Requirement for the Medicaid Cluster as a whole. All instances of noncompliance identified in the audit were cumulatively reviewed for purposes of forming our opinion on compliance with the direct and material compliance requirements. (2) The SAO has not misunderstood or disregarded the DHHS-CMS State Performance Standards System. While the DHHS-CMS also evaluates DHSS compliance through this system, the performance system is intended to measure the DHSS's level of compliance and identify when corrective action is needed to address deficiencies, but does not remove or waive the DHSS's responsibility to comply with the timeframes required by the SOM. (3) The audit exception listing provided to, and discussed with, the DHSS correctly lists the 3 revisit errors identified in the finding. Although the DHSS claims a revisit was not required for 1 of the errors, a revisit was clearly required per the SOM. The applicable survey letter documents the facility received a grid placement of "F". The SOM Matrix for Scope and Severity (Section 7400.3.1) classified a grid placement of "F" as "substandard quality of care," and SOM Section 7317.2 required revisits when surveys find "deficiencies that constitute substandard quality of care, harm, or immediate jeopardy." The DHSS provided no documentation or CMS policy that waived the revisit requirement for this facility. Regarding the other 2 errors, for which the DHSS argued the revisits could not occur until complaints regarding the facilities were resolved, the DHSS provided no CMS policy or directive indicating the DHSS could pause and delay revisits for facilities when complaints are received; and such revisit delays may allow deficiencies to continue and/or worsen over the course of the delay. In addition, the DHHS-CMS requirement to prioritize required actions does not remove or waive the DHSS's responsibility to perform revisits within required timeframes.
Information on Federal Program ‒ Grants to States for Medicaid (Assistance Listing Number 93.778) Criteria – Consistent with the requirements of 2 CFR 200.514, Subpart 3, L Reporting and consistent with the requirements of the subaward agreement, the University is required to submit compliance reporting to the grantor annually beginning in the year the funds were received. Condition – During our testing of this grant, we noted the following: The University did not submit the compliance reporting required under the subaward agreement. The grantor never provided the appropriate report templates so the University was unable to submit the necessary documentation. Cause – Management oversight and insufficient internal controls over grant compliance and lack of support from the grantor. Effect – The University was not in reporting compliance with subaward agreement, however, the funds were appropriately utilized within parameters of the grant agreement. Questioned Costs – None Context – The University never received the templates required for reporting and the grantor never requested the University submit the reporting. The University used the funds in compliance with the agreement but did not follow the full length of reporting requirements. Indication of a Repeat Finding – This is a new finding in 2025. Recommendation – We recommend the University ensure its internal controls, policies, and procedures are followed on a consistent basis regarding post award grant compliance and reporting. Views of Responsible Officials – See corrective action plan.
MANAGEMENT IS RESPONSIBLE FOR ESTABLISHING AND MAINTAINING AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS TO ENSURE COMPLIANCE WITH 2 CFR PART 200, SECTION 200.514(C) AND SUBPART E COST PRINCIPLES DOCUMENTATION OF INTERNAL CONTROLS SURROUNDING ALLOCATION OF NON-PAYROLL COSTS, IS A KEY COMPONENT OF EFFECTIVE INTERNAL CONTROL OVER COMPLIANCE. THE COALITION COULD NOT PROVIDE DOCUMENTATION OF REVIEW AND APPROVAL OF NON-PAYROLL EXPENSES ALLOCATED TO THE FEDERAL PROGRAMS THROUGH THE JOURNAL ENTRY PROCESS.
Program: ALL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Procurement and Suspension and Debarment Repeat Finding: Yes Condition: During our audit we noted that procurement documentation was not available to support the selection of a sole source vendor nor able to obtain documentation to support the Foundation entering into contractual agreements with vendors who were not debarred or suspended from doing business with the federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Per 2 CFR 200.318 General procurement: (b) The non-federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in this part. Per Uniform Guidance, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for procurement. Effect: If procurement were not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that management develop and implement written procurement policies and procedures in accordance with Uniform Guidance, provide periodic training to program personnel, and establish a review process to ensure procurement activities comply with applicable federal requirements. We also recommend the Foundation follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.
Assistance Listing Number, Federal Agency, and Program Name: All major programs Federal Award Identification Number and Year: 2024 Finding Type – Material weakness over compliance Repeat Finding - Yes Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended December 31, 2024. Context – The County’s single audit was not completed prior to the due date of data collection form. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The County’s Schedule of Federal Awards was not prepared in a timely manner. Effect – Data collection forms were not submitted on time. Recommendation – We recommend that the County develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with finding. See corrective action plan.
FINDING 2024-052 Refugee and Entrant Assistance State/Replacement Designee Administered Programs, ALN 93.566, Reporting - FFATA Reporting See Schedule of Findings and Questioned Costs for chart/table. Background LEO informed us it did not report any subaward information from October 2023 through March 2024 and then inappropriately calculated the subaward amounts reported from April 2024 through September 2024. In accordance with federal regulation 2 CFR 200.514, we determined additional compliance testing was not necessary because of ineffective internal control. Condition LEO did not ensure it reported or accurately and timely reported all REAP subaward information as required by FFATA. Criteria Federal regulation 2 CFR 170 implemented FFATA requirements for reporting subaward information and requires LEO to report, on the federal website, each action that obligates $30,000 or more in federal funds by the end of the month following the month in which the subaward was made. Cause LEO indicated it had not implemented a process to accumulate and submit the required information to the federal system until April 2024. Also, LEO informed us the report it used to accumulate subaward information did not contain accurate subaward amounts. Effect LEO grant information was not accurate or timely available for public access through the federal website established to improve transparency of governmental spending. We consider this to be a material weakness and material noncompliance because LEO did not ensure it reported, or accurately and timely reported, all subaward information as required by FFATA. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend LEO report REAP subaward information as required by FFATA. Management Views LEO agrees with the finding.
FINDING 2024-052 Refugee and Entrant Assistance State/Replacement Designee Administered Programs, ALN 93.566, Reporting - FFATA Reporting See Schedule of Findings and Questioned Costs for chart/table. Background LEO informed us it did not report any subaward information from October 2023 through March 2024 and then inappropriately calculated the subaward amounts reported from April 2024 through September 2024. In accordance with federal regulation 2 CFR 200.514, we determined additional compliance testing was not necessary because of ineffective internal control. Condition LEO did not ensure it reported or accurately and timely reported all REAP subaward information as required by FFATA. Criteria Federal regulation 2 CFR 170 implemented FFATA requirements for reporting subaward information and requires LEO to report, on the federal website, each action that obligates $30,000 or more in federal funds by the end of the month following the month in which the subaward was made. Cause LEO indicated it had not implemented a process to accumulate and submit the required information to the federal system until April 2024. Also, LEO informed us the report it used to accumulate subaward information did not contain accurate subaward amounts. Effect LEO grant information was not accurate or timely available for public access through the federal website established to improve transparency of governmental spending. We consider this to be a material weakness and material noncompliance because LEO did not ensure it reported, or accurately and timely reported, all subaward information as required by FFATA. The federal grantor agency could issue sanctions or disallowances related to noncompliance. Known Questioned Costs None. Recommendation We recommend LEO report REAP subaward information as required by FFATA. Management Views LEO agrees with the finding.
Data collection to be completed timely Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and 84.367, Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) Federal Award Identification Number and Year: 213713 & 240520 Pass-through Entity: Michigan Department of Education Finding Type: Material weakness over compliance and internal controls over compliance Criteria: Per 2 CFR 200.512(a)(1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501(b), a non Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with§ 200.514. Condition: The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Cause: The Academy's books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection forms were not submitted within the required time. Effect: Data collection forms were not submitted on time. Recommendation: We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of responsible officials and planned corrective action plan: Management agrees with the finding. See corrective action plan.
Data collection to be completed timely Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and 84.367, Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) Federal Award Identification Number and Year: 213713 & 240520 Pass-through Entity: Michigan Department of Education Finding Type: Material weakness over compliance and internal controls over compliance Criteria: Per 2 CFR 200.512(a)(1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501(b), a non Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with§ 200.514. Condition: The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Cause: The Academy's books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection forms were not submitted within the required time. Effect: Data collection forms were not submitted on time. Recommendation: We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of responsible officials and planned corrective action plan: Management agrees with the finding. See corrective action plan.
Data collection to be completed timely Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and 84.367, Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) Federal Award Identification Number and Year: 213713 & 240520 Pass-through Entity: Michigan Department of Education Finding Type: Material weakness over compliance and internal controls over compliance Criteria: Per 2 CFR 200.512(a)(1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501(b), a non Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with§ 200.514. Condition: The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Cause: The Academy's books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection forms were not submitted within the required time. Effect: Data collection forms were not submitted on time. Recommendation: We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of responsible officials and planned corrective action plan: Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 and 2024 fiscal year were not reconciled or closed in a timely manner. The data collection forms were not submitted within the required time. Effect – Data collection forms were not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 and 2024 fiscal year were not reconciled or closed in a timely manner. The data collection forms were not submitted within the required time. Effect – Data collection forms were not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and Assistance Listing Number 84.010A, Department of Education, Title I Grants to Local Educational Agencies Federal Award Identification Number and Year: 213716, 231530 and 241530 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form were not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and Assistance Listing Number 84.010A, Department of Education, Title I Grants to Local Educational Agencies Federal Award Identification Number and Year: 213716, 231530 and 241530 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form were not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and Assistance Listing Number 84.010A, Department of Education, Title I Grants to Local Educational Agencies Federal Award Identification Number and Year: 213716, 231530 and 241530 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form were not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and Assistance Listing Number 84.010A, Department of Education, Title I Grants to Local Educational Agencies Federal Award Identification Number and Year: 213716, 231530 and 241530 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form were not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and Assistance Listing Number 84.010A, Department of Education, Title I Grants to Local Educational Agencies Federal Award Identification Number and Year: 213716, 231530 and 241530 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form were not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and Assistance Listing Number 84.010A, Department of Education, Title I Grants to Local Educational Agencies Federal Award Identification Number and Year: 213716, 231530 and 241530 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form were not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and Assistance Listing Number 84.010A, Department of Education, Title I Grants to Local Educational Agencies Federal Award Identification Number and Year: 213716, 231530 and 241530 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form were not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form was not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form was not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form was not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form was not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Finding 2024-001 Reporting - Significant Deficiency in Internal Control Over Compliance Agency Department of Treasury Assistance Listing Numbers (ALN) 21.027 Program Name COVID-19 – Coronavirus State and Local Fiscal Recovery Fund Award Year 2022 Pass-Through Agency State of Alaska Department of Commerce, Community and Economic Development Pass-Through Entity Identifying Number AK0128 Criteria or Specific Requirement 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards to provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.514 requires auditors to obtain an understanding of the non-federal entity’s internal control over federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance, which includes inspection of evidence of operation of those controls. Condition There was insufficient evidence retained to document operation of reporting controls, to include review or approval of the report filed. Cause This particular grant operated differently than is typical for the City, as it was not managed by a separate department. Effect or Potential Effect Information submitted to the granting agency could be incomplete or inaccurate. Questioned costs None. Context The auditor selected the annual report for testing. The report was completed and submitted by the Finance Director, but no evidence of review was maintained. The report was retained in the grant file and available for testing, and management asserts the submission was discussed at in-person meetings. The expenditures included on the report are tracked and approved separately. Identification as a repeat finding Not a repeat finding. Recommendation We recommend management retain evidence of internal control procedures around reporting to show review. Views of Responsible Officials Management agrees with this finding and has revised their policies and procedures to improve review and approval of grant reports submitted.
Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund (ESF) FAL Number: 84.425U Pass-Through Agency: California Department of Education Pass-Through Number: 15559, 10155 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Reporting Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition and Context: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the Organization reported the full allocation of ESF funds for the year ended June 30, 2023, rather than the expenditures allocated to the program during the period. While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2023 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Effect: Over-reporting of $1,383,405 in expenditures over actual expenditures for 4 of the ESSER program annual performance reports. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Organization design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan (Unaudited): Controls will be implemented for future reporting and the Organization will have the opportunity to correct the reporting errors in the subsequent periods.
Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund (ESF) FAL Number: 84.425U Pass-Through Agency: California Department of Education Pass-Through Number: 15559, 10155 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Reporting Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition and Context: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the Organization reported the full allocation of ESF funds for the year ended June 30, 2023, rather than the expenditures allocated to the program during the period. While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2023 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Effect: Over-reporting of $1,383,405 in expenditures over actual expenditures for 4 of the ESSER program annual performance reports. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Organization design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan (Unaudited): Controls will be implemented for future reporting and the Organization will have the opportunity to correct the reporting errors in the subsequent periods.
Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition and Context: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the School reported the full allocation of ESF funds for the year ended June 30, 2023, rather than the expenditures allocated to the program during the period. While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2023 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Effect: Over-reporting of $292,469 in expenditures over actual expenditures for 3 of the ESSER program annual performance reports. Repeat Finding: Not a repeat finding. Recommendation: We recommend the School design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan (Unaudited): Controls will be implemented for future reporting and the School will have the opportunity to correct the reporting errors in the subsequent periods.
Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition and Context: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the School reported the full allocation of ESF funds for the year ended June 30, 2023, rather than the expenditures allocated to the program during the period. While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2023 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Effect: Over-reporting of $292,469 in expenditures over actual expenditures for 3 of the ESSER program annual performance reports. Repeat Finding: Not a repeat finding. Recommendation: We recommend the School design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan (Unaudited): Controls will be implemented for future reporting and the School will have the opportunity to correct the reporting errors in the subsequent periods.
Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition and Context: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the School reported the full allocation of ESF funds for the year ended June 30, 2023, rather than the expenditures allocated to the program during the period. While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2023 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Effect: Over-reporting of $292,469 in expenditures over actual expenditures for 3 of the ESSER program annual performance reports. Repeat Finding: Not a repeat finding. Recommendation: We recommend the School design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan (Unaudited): Controls will be implemented for future reporting and the School will have the opportunity to correct the reporting errors in the subsequent periods.
Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition and Context: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the School reported the full allocation of ESF funds for the year ended June 30, 2023, rather than the expenditures allocated to the program during the period. While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2023 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Effect: Over-reporting of $292,469 in expenditures over actual expenditures for 3 of the ESSER program annual performance reports. Repeat Finding: Not a repeat finding. Recommendation: We recommend the School design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan (Unaudited): Controls will be implemented for future reporting and the School will have the opportunity to correct the reporting errors in the subsequent periods.
Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition and Context: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the School reported the full allocation of ESF funds for the year ended June 30, 2023, rather than the expenditures allocated to the program during the period. While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2023 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Effect: Over-reporting of $292,469 in expenditures over actual expenditures for 3 of the ESSER program annual performance reports. Repeat Finding: Not a repeat finding. Recommendation: We recommend the School design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan (Unaudited): Controls will be implemented for future reporting and the School will have the opportunity to correct the reporting errors in the subsequent periods.
Criteria or specific requirement: Per 2 CFR section 200.514, in assessing the internal controls over reporting, it was noted an additional review of annual performance reports prior to submission was not accurately performed. Condition and Context: During the sample of 5 ESSER program annual performance reports that were tested, we noted that the School reported the full allocation of ESF funds for the year ended June 30, 2023, rather than the expenditures allocated to the program during the period. While the annual reporting was incorrect, the quarterly reporting of expenditures during the year ended June 30, 2023 were correct and expenditures for the ESF funds were recorded properly in the financial statements. Questioned Costs: No questioned costs, as quarterly report and use of expenditure by funds were accurately reported and recorded. Cause: Clerical error and lack of secondary review of inputs prior to annual performance report submissions. Effect: Over-reporting of $292,469 in expenditures over actual expenditures for 3 of the ESSER program annual performance reports. Repeat Finding: Not a repeat finding. Recommendation: We recommend the School design an additional internal control to review the annual performance reports prior to submission. Views of responsible officials and Corrective Action Plan (Unaudited): Controls will be implemented for future reporting and the School will have the opportunity to correct the reporting errors in the subsequent periods.