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.
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.
Program: AL 97.036 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) – Subrecipient Monitoring Grant Number & Year: 4616-DR-NE, declared September 6, 2021; 4420-DR-NE, declared March 21, 2019; 4641-DR-NE, declared February 23, 2022; 4662-DR-NE, declared July 27, 2022; 4521-DR-NE, declared April 4, 2020 Federal Grantor Agency: U.S. Department of Homeland Security Criteria: 2 CFR § 200.332 (January 1, 2024) states, in relevant part, the following: All pass-through entities must: * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501. 2 CFR § 200.501(b) (January 1, 2024) states, in relevant part, the following, “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 . . . .” A good internal control plan includes procedures to ensure subrecipient audits are reviewed timely. Condition: The Agency did not ensure subrecipients obtained Single audits. A similar finding was noted in the prior audit. Repeat Finding: 2023-063 Questioned Costs: None Statistical Sample: No Context: We selected three subrecipients for testing that would have required a Single audit based on the amount of funds received from the Agency during the subrecipient’s previous fiscal year. One of the three subrecipients received $12,604,747 in disaster grant funds passed through the Agency during the subrecipient’s fiscal year 2023, but did not submit a Single audit and the Agency had not followed up with the subrecipient. Cause: Employee oversight. The subrecipient returned a certification stating that they did not require a Single audit, and the Agency failed to verify the certification was proper. Effect: Without adequate monitoring procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency implement procedures to ensure subrecipient audits are obtained and reviewed timely. Management Response: Military (NEMA) agrees with the finding and has implemented the corrective action plan.
Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated State interest liabilities for multiple programs on the FY2024 CMIA Annual Report. Context: Finance is the entity responsible for calculation of State and Federal interest liabilities and completion of the CMIA Annual Report. The annual interest rate is established by the U.S. Treasury and published on its CMIA website. This rate must be used when calculating State and Federal interest liabilities in the Annual Report. Finance receives drawdown detail support from other State agencies which it uses to compile the State’s Annual Report submission. When Finance prepared the FY2024 Annual Report, it failed to verify that the correct interest rate was applied to calculate interest liabilities, resulting in an underreporting of the State interest liability for several programs. Specifically, we noted that the State’s interest liability was underreported for the following programs: • SNAP Cluster: $579 • Temporary Assistance for Needy Families: $2,589 • CCDF Cluster: $500 Cause: Finance’s procedures were not sufficient to ensure that the FY2024 interest rate established by the U.S. Treasury was applied for all programs when interest liabilities were calculated. Internal controls did not prevent or detect the errors. Effect: The State’s interest liability was underreported to the U.S. Treasury, resulting in the State earning interest on Federal funds to which it was not entitled. Questioned costs: $3,668, the total State interest liability that was underreported on the FY2024 CMIA Annual Report. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated State interest liabilities for multiple programs on the FY2024 CMIA Annual Report. Context: Finance is the entity responsible for calculation of State and Federal interest liabilities and completion of the CMIA Annual Report. The annual interest rate is established by the U.S. Treasury and published on its CMIA website. This rate must be used when calculating State and Federal interest liabilities in the Annual Report. Finance receives drawdown detail support from other State agencies which it uses to compile the State’s Annual Report submission. When Finance prepared the FY2024 Annual Report, it failed to verify that the correct interest rate was applied to calculate interest liabilities, resulting in an underreporting of the State interest liability for several programs. Specifically, we noted that the State’s interest liability was underreported for the following programs: • SNAP Cluster: $579 • Temporary Assistance for Needy Families: $2,589 • CCDF Cluster: $500 Cause: Finance’s procedures were not sufficient to ensure that the FY2024 interest rate established by the U.S. Treasury was applied for all programs when interest liabilities were calculated. Internal controls did not prevent or detect the errors. Effect: The State’s interest liability was underreported to the U.S. Treasury, resulting in the State earning interest on Federal funds to which it was not entitled. Questioned costs: $3,668, the total State interest liability that was underreported on the FY2024 CMIA Annual Report. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated State interest liabilities for multiple programs on the FY2024 CMIA Annual Report. Context: Finance is the entity responsible for calculation of State and Federal interest liabilities and completion of the CMIA Annual Report. The annual interest rate is established by the U.S. Treasury and published on its CMIA website. This rate must be used when calculating State and Federal interest liabilities in the Annual Report. Finance receives drawdown detail support from other State agencies which it uses to compile the State’s Annual Report submission. When Finance prepared the FY2024 Annual Report, it failed to verify that the correct interest rate was applied to calculate interest liabilities, resulting in an underreporting of the State interest liability for several programs. Specifically, we noted that the State’s interest liability was underreported for the following programs: • SNAP Cluster: $579 • Temporary Assistance for Needy Families: $2,589 • CCDF Cluster: $500 Cause: Finance’s procedures were not sufficient to ensure that the FY2024 interest rate established by the U.S. Treasury was applied for all programs when interest liabilities were calculated. Internal controls did not prevent or detect the errors. Effect: The State’s interest liability was underreported to the U.S. Treasury, resulting in the State earning interest on Federal funds to which it was not entitled. Questioned costs: $3,668, the total State interest liability that was underreported on the FY2024 CMIA Annual Report. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated State interest liabilities for multiple programs on the FY2024 CMIA Annual Report. Context: Finance is the entity responsible for calculation of State and Federal interest liabilities and completion of the CMIA Annual Report. The annual interest rate is established by the U.S. Treasury and published on its CMIA website. This rate must be used when calculating State and Federal interest liabilities in the Annual Report. Finance receives drawdown detail support from other State agencies which it uses to compile the State’s Annual Report submission. When Finance prepared the FY2024 Annual Report, it failed to verify that the correct interest rate was applied to calculate interest liabilities, resulting in an underreporting of the State interest liability for several programs. Specifically, we noted that the State’s interest liability was underreported for the following programs: • SNAP Cluster: $579 • Temporary Assistance for Needy Families: $2,589 • CCDF Cluster: $500 Cause: Finance’s procedures were not sufficient to ensure that the FY2024 interest rate established by the U.S. Treasury was applied for all programs when interest liabilities were calculated. Internal controls did not prevent or detect the errors. Effect: The State’s interest liability was underreported to the U.S. Treasury, resulting in the State earning interest on Federal funds to which it was not entitled. Questioned costs: $3,668, the total State interest liability that was underreported on the FY2024 CMIA Annual Report. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated State interest liabilities for multiple programs on the FY2024 CMIA Annual Report. Context: Finance is the entity responsible for calculation of State and Federal interest liabilities and completion of the CMIA Annual Report. The annual interest rate is established by the U.S. Treasury and published on its CMIA website. This rate must be used when calculating State and Federal interest liabilities in the Annual Report. Finance receives drawdown detail support from other State agencies which it uses to compile the State’s Annual Report submission. When Finance prepared the FY2024 Annual Report, it failed to verify that the correct interest rate was applied to calculate interest liabilities, resulting in an underreporting of the State interest liability for several programs. Specifically, we noted that the State’s interest liability was underreported for the following programs: • SNAP Cluster: $579 • Temporary Assistance for Needy Families: $2,589 • CCDF Cluster: $500 Cause: Finance’s procedures were not sufficient to ensure that the FY2024 interest rate established by the U.S. Treasury was applied for all programs when interest liabilities were calculated. Internal controls did not prevent or detect the errors. Effect: The State’s interest liability was underreported to the U.S. Treasury, resulting in the State earning interest on Federal funds to which it was not entitled. Questioned costs: $3,668, the total State interest liability that was underreported on the FY2024 CMIA Annual Report. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated State interest liabilities for multiple programs on the FY2024 CMIA Annual Report. Context: Finance is the entity responsible for calculation of State and Federal interest liabilities and completion of the CMIA Annual Report. The annual interest rate is established by the U.S. Treasury and published on its CMIA website. This rate must be used when calculating State and Federal interest liabilities in the Annual Report. Finance receives drawdown detail support from other State agencies which it uses to compile the State’s Annual Report submission. When Finance prepared the FY2024 Annual Report, it failed to verify that the correct interest rate was applied to calculate interest liabilities, resulting in an underreporting of the State interest liability for several programs. Specifically, we noted that the State’s interest liability was underreported for the following programs: • SNAP Cluster: $579 • Temporary Assistance for Needy Families: $2,589 • CCDF Cluster: $500 Cause: Finance’s procedures were not sufficient to ensure that the FY2024 interest rate established by the U.S. Treasury was applied for all programs when interest liabilities were calculated. Internal controls did not prevent or detect the errors. Effect: The State’s interest liability was underreported to the U.S. Treasury, resulting in the State earning interest on Federal funds to which it was not entitled. Questioned costs: $3,668, the total State interest liability that was underreported on the FY2024 CMIA Annual Report. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated State interest liabilities for multiple programs on the FY2024 CMIA Annual Report. Context: Finance is the entity responsible for calculation of State and Federal interest liabilities and completion of the CMIA Annual Report. The annual interest rate is established by the U.S. Treasury and published on its CMIA website. This rate must be used when calculating State and Federal interest liabilities in the Annual Report. Finance receives drawdown detail support from other State agencies which it uses to compile the State’s Annual Report submission. When Finance prepared the FY2024 Annual Report, it failed to verify that the correct interest rate was applied to calculate interest liabilities, resulting in an underreporting of the State interest liability for several programs. Specifically, we noted that the State’s interest liability was underreported for the following programs: • SNAP Cluster: $579 • Temporary Assistance for Needy Families: $2,589 • CCDF Cluster: $500 Cause: Finance’s procedures were not sufficient to ensure that the FY2024 interest rate established by the U.S. Treasury was applied for all programs when interest liabilities were calculated. Internal controls did not prevent or detect the errors. Effect: The State’s interest liability was underreported to the U.S. Treasury, resulting in the State earning interest on Federal funds to which it was not entitled. Questioned costs: $3,668, the total State interest liability that was underreported on the FY2024 CMIA Annual Report. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated State interest liabilities for multiple programs on the FY2024 CMIA Annual Report. Context: Finance is the entity responsible for calculation of State and Federal interest liabilities and completion of the CMIA Annual Report. The annual interest rate is established by the U.S. Treasury and published on its CMIA website. This rate must be used when calculating State and Federal interest liabilities in the Annual Report. Finance receives drawdown detail support from other State agencies which it uses to compile the State’s Annual Report submission. When Finance prepared the FY2024 Annual Report, it failed to verify that the correct interest rate was applied to calculate interest liabilities, resulting in an underreporting of the State interest liability for several programs. Specifically, we noted that the State’s interest liability was underreported for the following programs: • SNAP Cluster: $579 • Temporary Assistance for Needy Families: $2,589 • CCDF Cluster: $500 Cause: Finance’s procedures were not sufficient to ensure that the FY2024 interest rate established by the U.S. Treasury was applied for all programs when interest liabilities were calculated. Internal controls did not prevent or detect the errors. Effect: The State’s interest liability was underreported to the U.S. Treasury, resulting in the State earning interest on Federal funds to which it was not entitled. Questioned costs: $3,668, the total State interest liability that was underreported on the FY2024 CMIA Annual Report. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Finance and Management (Finance) improperly calculated State interest liabilities for multiple programs on the FY2024 CMIA Annual Report. Context: Finance is the entity responsible for calculation of State and Federal interest liabilities and completion of the CMIA Annual Report. The annual interest rate is established by the U.S. Treasury and published on its CMIA website. This rate must be used when calculating State and Federal interest liabilities in the Annual Report. Finance receives drawdown detail support from other State agencies which it uses to compile the State’s Annual Report submission. When Finance prepared the FY2024 Annual Report, it failed to verify that the correct interest rate was applied to calculate interest liabilities, resulting in an underreporting of the State interest liability for several programs. Specifically, we noted that the State’s interest liability was underreported for the following programs: • SNAP Cluster: $579 • Temporary Assistance for Needy Families: $2,589 • CCDF Cluster: $500 Cause: Finance’s procedures were not sufficient to ensure that the FY2024 interest rate established by the U.S. Treasury was applied for all programs when interest liabilities were calculated. Internal controls did not prevent or detect the errors. Effect: The State’s interest liability was underreported to the U.S. Treasury, resulting in the State earning interest on Federal funds to which it was not entitled. Questioned costs: $3,668, the total State interest liability that was underreported on the FY2024 CMIA Annual Report. Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
MATERIAL WEAKNESSES 2024-001- EIV Forms Federal Program Information: Housing Choice Voucher Cluster: CFDA – 14.871 Housing Choice Voucher Criteria: The following CFR(s) apply to this finding: 2 CFR 200.514(c) Condition: During audit procedures, it was identified that the Montpelier Housing Authority's EIV forms for new tenants were not being completed. Cause: The Authority does not have the necessary internal controls over compliance. Effect: The Authority is not pulling EIV information from the website in a timely manner with any of their new tenants that have come to the unit. Identification of Questioned Costs: None identified. Context: 40 tenant files were pulled for review Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Montpelier Authority implement internal control processes and procedures to ensure that EIV forms are done timely Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Montpelier Housing Authority.
2024-018 Oregon Department of Human Services Strengthen Medicaid fraud hotline reporting mechanisms Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777, 93.778 Medicaid Cluster Federal Award Numbers and Years: 2305OR5MAP, 2023; 2305OR5ADM, 2023; 2405OR5MAP, 2024; 2405OR05ADM, 2024 Compliance Requirements: Special Tests and Provisions Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 42 CFR 455.13(a); 42 CFR 455.14; 2 CFR 200.514 (c)(4) The state is required to have a method and criteria for identifying suspected fraud. For all suspected fraud reported the state must complete a preliminary investigation to determine whether there is sufficient basis to warrant a full investigation. The state is also required to maintain internal controls effective in preventing and/ or detecting noncompliance. To ensure adequate compliance with these requirements, the state uses a publicly available hotline portal to collect suspected fraud details. The Department of Human Services (department) manages the state’s online hotline portal and phone line. The department works collaboratively with the Oregon Heath Authority (authority) and Department of Justice (DOJ) to complete fraud investigations and referrals within their individual jurisdictions as required by standards. Referrals from the online hotline portal are extracted and then reviewed and tracked by the individual agency with appropriate jurisdiction. During inquiries and testing of the online hotline portal and phone line we noted the following: • The phone line recording provided inaccurate directions on how and where to report Medicaid fraud. The phone line instructions were not updated after changes to the department’s website, creating barriers to reporting. • The online hotline portal instructions and term definitions were vague, and not all fields were available. This could lead to a higher number of cases being closed for insufficient information. • The online hotline portal does not contain any case tracking details. As such the online hotline portal does not support any reporting to assist the department in ensuring all cases have had preliminary investigations. Without tracking details, we were unable to perform testing procedures over preliminary investigations. Per department management, the department has operated the hotline phone line and online portal for many years and strives for continuous improvement. However, management has not established procedures to ensure current systems operate in a manner that allows the agencies to meet compliance standards. We recommend department management ensure public access to provide fraud referrals is not limited and that a referral tracking mechanism is created to ensure all referrals are given preliminary investigations.
2024-018 Oregon Department of Human Services Strengthen Medicaid fraud hotline reporting mechanisms Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777, 93.778 Medicaid Cluster Federal Award Numbers and Years: 2305OR5MAP, 2023; 2305OR5ADM, 2023; 2405OR5MAP, 2024; 2405OR05ADM, 2024 Compliance Requirements: Special Tests and Provisions Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 42 CFR 455.13(a); 42 CFR 455.14; 2 CFR 200.514 (c)(4) The state is required to have a method and criteria for identifying suspected fraud. For all suspected fraud reported the state must complete a preliminary investigation to determine whether there is sufficient basis to warrant a full investigation. The state is also required to maintain internal controls effective in preventing and/ or detecting noncompliance. To ensure adequate compliance with these requirements, the state uses a publicly available hotline portal to collect suspected fraud details. The Department of Human Services (department) manages the state’s online hotline portal and phone line. The department works collaboratively with the Oregon Heath Authority (authority) and Department of Justice (DOJ) to complete fraud investigations and referrals within their individual jurisdictions as required by standards. Referrals from the online hotline portal are extracted and then reviewed and tracked by the individual agency with appropriate jurisdiction. During inquiries and testing of the online hotline portal and phone line we noted the following: • The phone line recording provided inaccurate directions on how and where to report Medicaid fraud. The phone line instructions were not updated after changes to the department’s website, creating barriers to reporting. • The online hotline portal instructions and term definitions were vague, and not all fields were available. This could lead to a higher number of cases being closed for insufficient information. • The online hotline portal does not contain any case tracking details. As such the online hotline portal does not support any reporting to assist the department in ensuring all cases have had preliminary investigations. Without tracking details, we were unable to perform testing procedures over preliminary investigations. Per department management, the department has operated the hotline phone line and online portal for many years and strives for continuous improvement. However, management has not established procedures to ensure current systems operate in a manner that allows the agencies to meet compliance standards. We recommend department management ensure public access to provide fraud referrals is not limited and that a referral tracking mechanism is created to ensure all referrals are given preliminary investigations.
2024-018 Oregon Department of Human Services Strengthen Medicaid fraud hotline reporting mechanisms Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777, 93.778 Medicaid Cluster Federal Award Numbers and Years: 2305OR5MAP, 2023; 2305OR5ADM, 2023; 2405OR5MAP, 2024; 2405OR05ADM, 2024 Compliance Requirements: Special Tests and Provisions Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 42 CFR 455.13(a); 42 CFR 455.14; 2 CFR 200.514 (c)(4) The state is required to have a method and criteria for identifying suspected fraud. For all suspected fraud reported the state must complete a preliminary investigation to determine whether there is sufficient basis to warrant a full investigation. The state is also required to maintain internal controls effective in preventing and/ or detecting noncompliance. To ensure adequate compliance with these requirements, the state uses a publicly available hotline portal to collect suspected fraud details. The Department of Human Services (department) manages the state’s online hotline portal and phone line. The department works collaboratively with the Oregon Heath Authority (authority) and Department of Justice (DOJ) to complete fraud investigations and referrals within their individual jurisdictions as required by standards. Referrals from the online hotline portal are extracted and then reviewed and tracked by the individual agency with appropriate jurisdiction. During inquiries and testing of the online hotline portal and phone line we noted the following: • The phone line recording provided inaccurate directions on how and where to report Medicaid fraud. The phone line instructions were not updated after changes to the department’s website, creating barriers to reporting. • The online hotline portal instructions and term definitions were vague, and not all fields were available. This could lead to a higher number of cases being closed for insufficient information. • The online hotline portal does not contain any case tracking details. As such the online hotline portal does not support any reporting to assist the department in ensuring all cases have had preliminary investigations. Without tracking details, we were unable to perform testing procedures over preliminary investigations. Per department management, the department has operated the hotline phone line and online portal for many years and strives for continuous improvement. However, management has not established procedures to ensure current systems operate in a manner that allows the agencies to meet compliance standards. We recommend department management ensure public access to provide fraud referrals is not limited and that a referral tracking mechanism is created to ensure all referrals are given preliminary investigations.
2024-018 Oregon Department of Human Services Strengthen Medicaid fraud hotline reporting mechanisms Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777, 93.778 Medicaid Cluster Federal Award Numbers and Years: 2305OR5MAP, 2023; 2305OR5ADM, 2023; 2405OR5MAP, 2024; 2405OR05ADM, 2024 Compliance Requirements: Special Tests and Provisions Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 42 CFR 455.13(a); 42 CFR 455.14; 2 CFR 200.514 (c)(4) The state is required to have a method and criteria for identifying suspected fraud. For all suspected fraud reported the state must complete a preliminary investigation to determine whether there is sufficient basis to warrant a full investigation. The state is also required to maintain internal controls effective in preventing and/ or detecting noncompliance. To ensure adequate compliance with these requirements, the state uses a publicly available hotline portal to collect suspected fraud details. The Department of Human Services (department) manages the state’s online hotline portal and phone line. The department works collaboratively with the Oregon Heath Authority (authority) and Department of Justice (DOJ) to complete fraud investigations and referrals within their individual jurisdictions as required by standards. Referrals from the online hotline portal are extracted and then reviewed and tracked by the individual agency with appropriate jurisdiction. During inquiries and testing of the online hotline portal and phone line we noted the following: • The phone line recording provided inaccurate directions on how and where to report Medicaid fraud. The phone line instructions were not updated after changes to the department’s website, creating barriers to reporting. • The online hotline portal instructions and term definitions were vague, and not all fields were available. This could lead to a higher number of cases being closed for insufficient information. • The online hotline portal does not contain any case tracking details. As such the online hotline portal does not support any reporting to assist the department in ensuring all cases have had preliminary investigations. Without tracking details, we were unable to perform testing procedures over preliminary investigations. Per department management, the department has operated the hotline phone line and online portal for many years and strives for continuous improvement. However, management has not established procedures to ensure current systems operate in a manner that allows the agencies to meet compliance standards. We recommend department management ensure public access to provide fraud referrals is not limited and that a referral tracking mechanism is created to ensure all referrals are given preliminary investigations.
MATERIAL WEAKNESSES 2024-001- EIV Forms Federal Program Information: Housing Choice Voucher Cluster: CFDA – 14.871 Housing Choice Voucher Criteria: The following CFR(s) apply to this finding: 2 CFR 200.514(c) Condition: During audit procedures, it was identified that the Montpelier Housing Authority's EIV forms for new tenants were not being completed. Cause: The Authority does not have the necessary internal controls over compliance. Effect: The Authority is not pulling EIV information from the website in a timely manner with any of their new tenants that have come to the unit. Identification of Questioned Costs: None identified. Context: 40 tenant files were pulled for review Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Montpelier Authority implement internal control processes and procedures to ensure that EIV forms are done timely Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Montpelier Housing Authority.
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.
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.